Document:

EXHIBIT 4.1

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                    VECTREN UTILITY HOLDINGS, INC., AS ISSUER
                     INDIANA GAS COMPANY, INC., AS GUARANTOR
             SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, AS GUARANTOR
               VECTREN ENERGY DELIVERY OF OHIO, INC., AS GUARANTOR
                                       AND
                U.S. BANK TRUST NATIONAL ASSOCIATION, AS TRUSTEE

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

                           GUARANTEED DEBT SECURITIES
                                    INDENTURE
                        DATED AS OF                , 2001

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

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<PAGE>

                              CROSS-REFERENCE TABLE

                                                             INDENTURE
 TIA SECTION                                                  SECTION
 -----------                                                 ---------

  Section 310 (a)(1) ..........................................7.10
         (a)(2)  ..............................................7.10
         (a)(3)  ..............................................N.A.
         (a)(4)  ..............................................N.A.
         (a)(5)  ..............................................7.08
         (b)     ..............................................7.08; 7.10
         (c)     ..............................................N.A.
 Section 311 (a) ..............................................7.11
         (b)     ..............................................7.11
         (c)     ..............................................N.A.
 Section 312 (a) ..............................................2.06
         (b)     ..............................................11.02
         (c)     ..............................................11.02; 11:03
 Section 313 (a) ..............................................7.06
         (b)(1)  ..............................................N.A.
         (b)(2)  ..............................................7.06
         (c)     ..............................................7.06; 11.02
         (d)     ..............................................7.06
 Section 314 (a) ..............................................4.06; 11.02
         (b)     ..............................................N.A.
         (c)(1)  ..............................................11.04
         (c)(2)  ..............................................11.04
         (c)(3)  ..............................................8.04; 8.05
         (d)     ..............................................N.A.
         (e)     ..............................................11.05
         (f)     ..............................................N.A.
 Section 315 (a) ..............................................7.01(a); 7.01(b)
         (b)     ..............................................7.05; 11.02
         (c)     ..............................................7.01(a)
         (d)     ..............................................7.01(c)
         (e)     ..............................................6.11
 Section 316 (a)(last sentence)................................2.10
         (a)(1)(A).............................................6.05
         (a)(1)(B).............................................6.04
         (a)(2)  ..............................................N.A.
         (b)     ..............................................6.07
         (c)     ..............................................9.04
 Section 317 (a)(1)............................................6.08
         (a)(2)  ..............................................6.09
         (b)     ..............................................2.05
 Section 318 (a) ..............................................11.01

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N.A. means Not Applicable.
NOTE: This  Cross-Reference  Table shall not, for any purpose, be deemed to be a
part of this Indenture.

<PAGE>

                                TABLE OF CONTENTS

                                                                           PAGE
                                                                           ----

RECITALS OF THE COMPANY.......................................................1

ARTICLE 1      Definitions and Incorporation by Reference.....................1
   Section 1.01. Definitions..................................................1
   Section 1.02.  Incorporation by Reference on Trust Indenture Act...........7
   Section 1.03.  Rules of Construction.......................................8

ARTICLE 2      The Securities.................................................9
   Section 2.01. Form of Securities...........................................9
   Section 2.02. Title and Terms..............................................9
   Section 2.03. Execution and Authentication................................12
   Section 2.04. Registrar and Paying Agent..................................14
   Section 2.05. Paying Agent to Hold Money In Trust.........................14
   Section 2.06. Securityholder Lists........................................15
   Section 2.07. Transfer and Exchange.......................................15
   Section 2.08. Replacement Securities......................................17
   Section 2.09. Outstanding Securities......................................17
   Section 2.10. Treasury Securities.........................................18
   Section 2.11. Temporary Securities........................................18
   Section 2.12. Cancellation................................................18
   Section 2.13. Defaulted Interest..........................................18
   Section 2.14. Persons Deemed Owners.......................................19

ARTICLE 3A      Redemption...................................................19
   Section 3A.01. Right of Redemption........................................19
   Section 3A.02. Applicability of Article...................................19
   Section 3A.03. Election to Redeem; Notice to Trustee......................19
   Section 3A.04. Selection by Trustee of Securities to be Redeemed..........20
   Section 3A.05. Notice of Redemption.......................................20
   Section 3A.06. Deposit of Redemption Price................................21
   Section 3A.07. Securities Payable on Redemption Date......................21
   Section 3A.08. Securities Redeemed in Part................................21

ARTICLE 3B      Sinking Fund.................................................22
   Section 3B.01. Sinking Fund Payments......................................22
   Section 3B.02. Satisfaction of Sinking Fund Payments with Securities......22
   Section 3B.03. Redemption of Securities for Sinking Fund..................22

ARTICLE 4      Covenants.....................................................23
   Section 4.01. Payment of Securities.......................................23
   Section 4.02. Maintenance of Office or Agency.............................23
   Section 4.03. Corporate Existence.........................................24
   Section 4.04. Reserved....................................................24
   Section 4.05. Compliance Certificate......................................24
   Section 4.06. SEC Reports.................................................24
   Section 4.07. Waiver of Stay, Extension or Usury Laws.....................25
   Section 4.08. Restrictions on Liens.......................................25
   Section 4.09. Restrictions on Sales and Leasebacks........................26

ARTICLE 5      Successor Corporation.........................................27
   Section 5.01. When Company And The Guarantors May Merge, etc..............27
   Section 5.02. Successor Corporation Substituted...........................27

ARTICLE 6      Default and Remedies..........................................28
   Section 6.01. Events of Default...........................................28
   Section 6.02. Acceleration................................................29
   Section 6.03. Other Remedies..............................................30
   Section 6.04. Waiver of Past Defaults.....................................30
   Section 6.05. Control by Majority.........................................30
   Section 6.06. Limitation on Suits.........................................31
   Section 6.07. Rights of Holders to Receive Payment........................31
   Section 6.08. Collection Suit by Trustee..................................31
   Section 6.09. Trustee May File Proofs of Claim............................32
   Section 6.10. Priorities..................................................32
   Section 6.11. Undertaking for Costs.......................................32

ARTICLE 7      Trustee.......................................................33
   Section 7.01. Duties of Trustee...........................................33
   Section 7.02. Rights of Trustee...........................................34
   Section 7.03. Individual Rights of Trustee................................35
   Section 7.04. Trustee's Disclaimer........................................35
   Section 7.05. Notice of Defaults..........................................35
   Section 7.06. Reports by Trustee to Holders...............................35
   Section 7.07. Compensation and Indemnity..................................36
   Section 7.08. Replacement of Trustee......................................36
   Section 7.09. Successor Trustee by Merger, etc............................37
   Section 7.10. Eligibility; Disqualification...............................37
   Section 7.11. Preferential Collection of Claims Against Company...........37

ARTICLE 8      Defeasance, Covenant Defeasance, Satisfaction and Discharge...38
   Section 8.01. Applicability of Article; Company's Option to Effect
                        Defeasance or Covenant Defeasance....................38
   Section 8.02. Defeasance and Discharge....................................39
   Section 8.03. Covenant Defeasance.........................................39
   Section 8.04. Conditions to Defeasance or Covenant Defeasance.............40
   Section 8.05. Deposited Money and U.S. Government Obligations to be
                        Held in Trust; Other Miscellaneous Provisions........41
   Section 8.06. Satisfaction and Discharge of Indenture.....................42
   Section 8.07. Application of Trust Money..................................43
   Section 8.08. Repayment to Company........................................44
   Section 8.09. Reinstatement...............................................44

ARTICLE 9      Amendments, Supplements and Waivers...........................43
   Section 9.01. Without Consent of Holders..................................43
   Section 9.02. With Consent of Holders.....................................44
   Section 9.03. Compliance with Trust Indenture Act.........................45
   Section 9.04. Revocation and Effect of Consents...........................45
   Section 9.05. Notation On or Exchange of Securities.......................46
   Section 9.06. Trustee to Sign Amendments, etc.............................46

ARTICLE 10      Guarantee of Securities......................................46
   Section 10.01. Unconditional Guarantee....................................46
   Section 10.02. Execution of Guarantee.....................................48
    Section 10.03. Execution of Guarantee....................................44

ARTICLE 11      Miscellaneous................................................49
   Section 11.01. Trust Indenture Act Controls...............................49
   Section 11.02. Notices....................................................49
   Section 11.03. Communications by Holders With Other Holders...............50
   Section 11.04. Certificate and Opinion as to Conditions Precedent.........50
   Section 11.05. Statements Required in Certificate or Opinion..............50
   Section 11.06. Rules by Trustee, Paying Agent, Registrar..................51
   Section 11.07. Legal Holidays.............................................51
   Section 11.08. Governing Law..............................................51
   Section 11.09. No Adverse Interpretation of Other Agreements..............51
   Section 11.10. No Recourse Against Others.................................51
   Section 11.11. Successors.................................................52
   Section 11.12. Duplicate Originals........................................52
   Section 11.13. Separability...............................................52
   Section 11.14. Action of Holders when Securities are Denominated
                         in Different Currencies.............................52
   Section 11.15. Monies of Different Currencies to be Segregated............52
   Section 11.16. Payment to be in Proper Currency...........................52

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NOTE: This Table of Contents shall not, for any purpose,  be deemed to be a part
of this Indenture.

<PAGE>

     INDENTURE, dated as of ______________, 2001 among Vectren Utility Holdings,
Inc., an Indiana  corporation (the "Company") and Indiana Gas Company,  Inc., an
Indiana  corporation and an Ohio corporation  ("Indiana Gas"),  Southern Indiana
Gas and Electric Company, an Indiana  corporation  ("SIGECO") and Vectren Energy
Delivery of Ohio, Inc., an Ohio corporation  ("VEDO"),  (Indiana Gas, SIGECO and
VEDO are referred to herein  collectively  as the  "Guarantors")  and U.S.  Bank
Trust National Association ("Trustee").

                             RECITALS OF THE COMPANY

     The Company and the  Guarantors  have duly  authorized  the  execution  and
delivery of this  Indenture to provide for the issuance from time to time of the
Company's unsecured notes,  debentures or other evidences of indebtedness of the
Company (collectively,  the "Securities"), to be issued from time to time in one
or more series (a  "Series")  and the  Guarantees  (as  hereinafter  defined) as
provided in this  Indenture  and as shall be provided,  in respect of any Series
and the Guarantees,  in or pursuant to the Authorizing  Resolutions  hereinafter
referred to and/or in the  indenture  supplemental  hereto (if any)  relating to
such Series and the Guarantees.

                                    ARTICLE 1

                   Definitions and Incorporation by Reference

 Section 1.01. Definitions.

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

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

     "Attributable   Debt"  means,  with  respect  to  any  Sale  and  Leaseback
Transaction as of any particular time, the present value (discounted at the rate
of interest implicit in the terms of the lease) of the obligations of the lessee
under such lease for net rental  payments during the remaining term of the lease
(including  any period for which such  lease has been  extended  or may,  at the
option of the Company, be extended).

     "Authorizing  Resolution"  means  a  Board  Resolution  providing  for  the
issuance of a Series of Securities.

     "Bankruptcy Law" shall have the meaning provided in Section 6.01.

     "Board of  Directors"  of any  corporation  means the board of directors of
such corporation or any duly authorized committee of the Board.

     "Board Resolution" means a copy of a resolution  certified by the Secretary
or an  Assistant  Secretary of the Company or the  Guarantors  to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such  certification,  and  delivered  to the  Trustee  (except as provided in
Section 2.03).

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

     "Capital  Stock"  means,  with  respect to any Person,  any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock of such Person other than Mandatory Redemption Preferred Stock.

     "Capitalized   Lease   Obligation"   means   Indebtedness   represented  by
obligations  under a lease that is  required  to be  capitalized  for  financial
reporting purposes in accordance with generally accepted  accounting  principles
and the  amount of such  Indebtedness  shall be the  capitalized  amount of such
obligations determined in accordance with such principles.

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

     "Company Request" and "Company Order" mean, respectively, a written request
or order  signed in the name of the Company by two Officers of the Company or by
an Officer and the  Treasurer,  an  Assistant  Treasurer,  the  Secretary  or an
Assistant  Secretary,  and  delivered to the Trustee in respect of the Series to
which the Company Request or Company Order shall relate.

     "Consolidated  Net Tangible  Assets" means the total assets  appearing on a
consolidated  balance sheet of the Company and its  Subsidiaries  less,  without
duplication:  (i) current liabilities;  (ii) reserves for estimated rate refunds
pending the outcome of a rate  proceeding  to the extent such  refunds  have not
been finally  determined;  (iii) all intangible assets; and (iv) deferred income
tax assets.

     "Consolidated  Subsidiary" means a Subsidiary which for financial reporting
purposes is accounted for by the Company as a consolidated subsidiary.

     "Corporate  Trust Office" or other similar term means the principal  office
of the Trustee at which at any  particular  time its  corporate  trust  business
shall be  administered,  which  office at the date hereof is located at 180 East
Fifth Street, Suite 200, St. Paul, Minnesota 55101, Attention: Richard Prokosch,
Fax: 651-244-0711; the Trustee will notify the Company of any change thereof.

     "Covenant Defeasance" shall have the meaning provided in Section 8.03.

     "Custodian" shall have the meaning provided in Section 6.01.

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

     "Defeasance" shall have the meaning provided in Section 8.02.

     "Depository"  means,  with respect to the Securities of any Series issuable
or issued in the form of one or more Global Securities, the Person designated as
Depository  by the Company  pursuant to Section 2.02,  initially The  Depository
Trust Company,  until a successor  Depository shall have become such pursuant to
the applicable provisions of this Indenture,  and thereafter  "Depository" shall
mean or include each Person who is then a Depository  hereunder,  and, if at any
time there is more than one such  Person,  "Depository"  as used with respect to
the Securities of any such Series shall mean the Depository  with respect to the
Global Securities of such Series.

     "Event of Default" shall have the meaning provided in Section 6.01.

     "Extendible Securities" means Securities of any Series issued hereunder the
final  maturity of which is extendible  for a stated period of time, as shall be
provided in, or pursuant to, the  Authorizing  Resolutions  and/or  supplemental
indenture (if any) relating to such Series.

     "Funded  Debt" means all  Indebtedness  maturing  one year or more from the
date of the creation thereof, all Indebtedness  directly or indirectly renewable
or extendible,  at the option of the debtor, by its terms or by the terms of any
instrument or agreement  relating  thereto,  to a date one year or more from the
date of the creation thereof,  and all Indebtedness  under a revolving credit or
similar  agreement  obligating  the lender or lenders  to extend  credit  over a
period of one year or more,  even though such  Indebtedness  may also conform to
the definition of Short-Term Borrowing.

     "Global Security" means a Security  evidencing all or a part of a Series of
Securities  issued  to and  registered  in the name of the  Depository  for such
Series, or its nominee,  in accordance with Section 2.02, and bearing the legend
prescribed in Section 2.03.

     "Guarantees" means the Guarantors'  unconditional guarantees of the payment
of the amounts owed with respect to the  Securities  as more fully  described in
Article 10 hereof.

     "Guarantor"  or  "Guarantors"  means  the  Person or  Persons  named as the
"Guarantors"  in the  first  paragraph  of this  instrument  together  with  any
additional Person who shall execute a supplemental  indenture  pursuant to which
it shall  guarantee  under this Indenture any  Securities,  in each case until a
successor  corporation  shall  have  become  such  pursuant  to  the  applicable
provisions  of this  Indenture,  and  thereafter  Guarantors  shall include such
successor corporation.

     "Holder" or  "Securityholder"  means,  with  respect to any  Security,  the
Person in whose name such Security is registered on the Security Register.

     "Indebtedness"  means (i) any  liability  of any  Person  (a) for  borrowed
money,  (b) evidenced by a note,  debenture or similar  instrument  (including a
purchase  money  obligation)  given in connection  with the  acquisition  of any
property or assets  (other than  inventory or similar  property  acquired in the
ordinary course of business), including securities, (c) for the payment of money
relating to a Capitalized Lease Obligation,  or (d) in respect of acceptances or
letters of credit or similar  instruments  issued or created  for the account of
such Person;  (ii) all preferred  stock of any Person that is  redeemable  other
than at the  option of such  Person;  (iii) any  guarantee  by any Person of any
liability or preferred stock of others described in the preceding clauses (i) or
(ii); and (iv) any amendment,  renewal,  extension or refunding of any liability
or preferred stock of the types referred to in clauses (i), (ii) or (iii) above.

     "Indenture"  means this Indenture as amended or  supplemented  from time to
time and shall  include the forms and terms of  particular  Series of Securities
established as contemplated hereunder.

     "Interest  Payment  Date" means,  for any Series of  Securities  issued and
outstanding  hereunder,  the date or dates in each year on which any interest on
such Series is due and payable.

     "Legal Holiday" shall have the meaning provided in Section 11.07.

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

     "Mandatory  Redemption  Preferred Stock" means, with respect to any Person,
any and all  shares  of  preferred  stock  of such  Person  now  outstanding  or
hereafter  issued,  subject to mandatory  redemption  provisions  or  provisions
relating to repayment at the option of the holders thereof.

     "Maturity"  when used with respect to any Security  means the date on which
the  principal  of such  Security  becomes  due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.

     "Maturity  Date"  means the date  specified  in each  Security on which the
principal thereof is due and payable in full.

     "Officer"  means  the  Principal  Executive  Officer,  Principal  Financial
Officer or  Principal  Accounting  Officer of the  Company  or a  Guarantor,  as
applicable.

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

     "Opinion  of Counsel"  means a written  opinion  from legal  counsel who is
acceptable  to the Trustee.  The counsel may be an employee of or counsel to the
Company. See Sections 11.04 and 11.05.

     "Original  Issue  Date" means the date on which a Security is issued to the
original purchaser thereof, as specified in such Security.

     "Original Issue Discount  Securities" means Securities which provide for an
amount less than 100% of the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 6.02.

     "Paying Agent" shall have the meaning provided in Section 2.04, except that
for the purposes of Article 8 and Section 4.04 the Paying Agent shall not be the
Company or any Subsidiary.

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

     "Principal" of a Security  means the principal of such Security plus,  when
appropriate, the premium, if any, on such Security.

     "Principal Domestic Property" shall mean any property,  plant, equipment or
facility  of the Company or a Guarantor  as  applicable  which is located in the
United  States or any  territory or political  subdivision  thereof,  except any
property  which  the  Board of  Directors  or  management  of the  Company  or a
Guarantor as applicable determines is not material to the business or operations
of the Company or a Guarantor as  applicable  and its  Subsidiaries,  taken as a
whole.

     "Redeemable  Securities"  means  Securities  of  any  Series  which  may be
redeemed,  at the option of the Company,  prior to their Stated Maturity, on the
terms   specified  in  or  pursuant  to  the  Authorizing   Resolutions   and/or
supplemental indenture relating to such Series and in accordance with Article 3A
herein.

     "Redemption  Date" when used with  respect to any Security of any Series to
be  redeemed  means the date fixed for such  redemption  by or  pursuant  to the
provisions of such  Security,  this  Indenture and the  Authorizing  Resolutions
and/or supplemental indenture (if any) relating to such Security.

     "Redemption  Price" when used with respect to any Security of any Series to
be  redeemed  means  the  price at which it is to be  redeemed  pursuant  to the
provisions of such  Security,  this  Indenture and the  Authorizing  Resolutions
and/or supplemental indenture relating to such Security.

     "Registrar" shall have the meaning provided in Section 2.04.

     "Regular  Record  Date"  means,  for the  interest  payable on any Interest
Payment Date in respect of any Series of  Securities,  except as provided in, or
pursuant to, the Authorizing  Resolutions and/or supplemental indenture (if any)
relating  thereto,  the day (whether or not a Business Day) that is fifteen days
preceding the applicable Interest Payment Date.

     "Required Currency" shall have the meaning provided in Section 11.16.

     "Sale and Leaseback Transaction" shall have the meaning provided in Section
4.09.

     "SEC" means the Securities and Exchange Commission.

     "Securities"  means the debt  securities,  as amended or supplemented  from
time to time  pursuant  to the terms of this  Indenture,  of the  Company of any
Series that are issued under this Indenture.

     "Security Register" shall have the meaning provided in Section 2.04.

     "Series" means, with respect to Securities issued hereunder, the Securities
issued pursuant to any particular  Authorizing  Resolutions and/or  supplemental
indenture (if any), subject to the right of the Board of Directors to specify in
such Authorizing  Resolutions and/or  supplemental  indenture (if any) that such
Securities shall constitute more than one Series.

     "Short-Term  Borrowing" means all Indebtedness in respect of borrowed money
maturing on demand or within one year from the date of the creation  thereof and
not directly or indirectly renewable or extendible, at the option of the debtor,
by its terms or by the terms of any instrument or agreement relating thereto, to
a date one year or more from the date of the creation  thereof;  provided,  that
Indebtedness  in respect of borrowed  money arising under a revolving  credit or
similar  agreement which obligates the lender or lenders to extend credit over a
period  of one year or more  shall  constitute  Funded  Debt and not  Short-Term
Borrowing  even  though  the same  matures on demand or within one year from the
date as of which such Short-Term Borrowing is to be determined.

     "Significant  Subsidiary"  means a Subsidiary,  including its Subsidiaries,
which meets any of the following conditions:

     (a) the Company's and its other  Subsidiaries'  investments in and advances
to the  Subsidiary  exceed 10 percent of the total assets of the Company and its
Subsidiaries  consolidated  as of the end of any two of the three most  recently
completed fiscal years; or

     (b) the Company's and its other  Subsidiaries'  proportionate  share of the
total  assets of the  Subsidiary  exceeds 10 percent of the total  assets of the
Company and its Subsidiaries  consolidated as of the end of any two of the three
most recently completed fiscal years; or

     (c) the  Company's  and its other  Subsidiaries'  equity in the income from
continuing  operations before income taxes,  extraordinary  items and cumulative
effect of a change in accounting principles of the Subsidiary exceeds 10 percent
of such income of the Company and its Subsidiaries consolidated as of the end of
any two of the three most recently completed fiscal years.

     "Sinking  Fund"  means,  with  respect to any Sinking  Fund  Securities,  a
sinking fund provided for in Article 3B.

     "Sinking Fund Securities" means Securities of any Series which are required
to be redeemed from time to time prior to the Stated  Maturity  thereof in whole
or in part  under a Sinking  Fund,  on the terms  specified  in the  Authorizing
Resolutions and/or  supplemental  indenture (if any) relating to such Series and
in accordance with Article 3B herein.

     "Special Record Date" shall have the meaning provided in Section 2.13.

     "Stated Maturity" when used with respect to any Security or any installment
of interest  thereon means the date specified in such Security as the fixed date
on which the principal of such Security or such  installment  of interest is due
and payable.

     "Subsequent Guarantor" shall have the meaning provided in Section 10.03.

     "Subsidiary" means (i) a corporation a majority of whose Capital Stock with
voting power, under ordinary  circumstances,  to elect directors is at the time,
directly or  indirectly,  owned by the Company,  by the Company and a Subsidiary
(or  Subsidiaries)  of the Company or by a Subsidiary (or  Subsidiaries)  of the
Company  or (ii) any  other  Person  (other  than a  corporation)  in which  the
Company,  a  Subsidiary  (or  Subsidiaries)  of the Company or the Company and a
Subsidiary (or Subsidiaries) of the Company, directly or indirectly, at the date
of determination  thereof has at least majority  ownership  interest;  provided,
that no corporation shall be deemed a Subsidiary until the Company, a Subsidiary
(or   Subsidiaries)  of  the  Company  or  the  Company  and  a  Subsidiary  (or
Subsidiaries)  of the Company  acquires more than 50% of the outstanding  voting
stock thereof and has elected a majority of its board of directors.

     "TIA"  means  the  Trust  Indenture  Act  of  1939  (15  U.S.  Code  (S)(S)
77aaa77bbbb)  as in effect on the date of this  Indenture  except as provided in
Section 9.03.

     "Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance  with the  provisions of this Indenture and thereafter
means and  includes  the Person or each Person who is then a Trustee  hereunder,
and if at any time there is more than one such  Person,  "Trustee"  as used with
respect to the  Securities  of any Series shall mean the Trustee with respect to
Securities of that Series.

     "Trust  Officer"  means any  officer or  assistant  officer of the  Trustee
assigned by the Trustee to administer its corporate trust matters.

     "U.S.  Government  Obligations"  shall have the meaning provided in Section
8.01.

     "Yield to Maturity"  means,  with respect to any Series of Securities,  the
yield to maturity thereof,  calculated at the time of issuance  thereof,  or, if
applicable,  at  the  most  recent  redetermination  of  interest  thereon,  and
calculated in accordance with accepted financial practice.

Section 1.02. Incorporation by Reference of Trust Indenture Act.

     Whenever this Indenture  refers to a provision of the TIA, the provision is
incorporated  by reference in and made a part of this  Indenture.  The following
TIA terms used in this Indenture have the following meanings:

     "Commission" means the SEC;

     "indenture securities" means the Securities;

     "indenture security holder" means a Securityholder;

     "indenture to be qualified" means this Indenture;

     "indenture trustee" or "institutional trustee" means the Trustee; and

     "obligor" on the indenture  securities  means the Company or a Guarantor or
any other obligor on the Securities.

     All other TIA terms  used in this  Indenture  that are  defined by the TIA,
defined  by TIA  reference  to  another  statute  or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.

Section 1.03. Rules of Construction.

     Unless the context otherwise requires:

     (1) a term has the meaning assigned to it;

     (2) an accounting term not otherwise defined has the meaning assigned to it
in accordance  with generally  accepted  accounting  principles in effect in the
United States, and any other reference in this Indenture to "generally  accepted
accounting  principles"  refers to generally accepted  accounting  principles in
effect in the United States;

     (3) "or" is not exclusive;

     (4) words in the  singular  include  the  plural,  and words in the  plural
include the singular;

     (5) provisions apply to successive events and transactions;

     (6) "herein," "hereof," "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision; and

     (7) "include,"  "included,"  and "including" as used herein shall be deemed
in each case to be followed by the phrase "without limitation."

                                    ARTICLE 2

                                 The Securities

Section 2.01. Form of Securities.

     The Securities of each Series shall be in substantially  the forms as shall
be  specified  in, or pursuant  to, the  Authorizing  Resolutions  and/or in the
indenture  supplemental  hereto  (if any)  relating  to such  Series,  with such
appropriate  insertions,  omissions,  substitutions  and other variations as are
required or permitted  by this  Indenture  or the said  Authorizing  Resolutions
and/or supplemental indenture (if any).

     The definitive Securities of each Series shall be printed,  lithographed or
engraved or  produced  by any  combination  of these  methods on steel  engraved
borders or may be produced  in any other  manner  permitted  by the rules of any
securities  exchange on which the  Securities  and the Guarantees may be listed,
or, if they shall not be listed on any securities exchange,  in any other manner
consistent  herewith,  all as shall be determined by the officers executing such
Securities  and  the  Guarantees,  as  evidenced  by  their  execution  of  such
Securities  and the  Guarantees.  The  Securities  and the  Guarantees  may have
notations,  legends or  endorsements  required by law,  stock  exchange  rule or
usage.  The Company shall approve the form of the  Securities and the Guarantees
and the Guarantors  shall approve the form of the Guarantees  and, in each case,
any notation, legend or endorsement on them.

     The terms and provisions  contained in the Securities and the Guarantees in
such forms as  specified  in the  Authorizing  Resolutions  and/or  supplemental
indenture (if any) relating thereto, shall constitute,  and are hereby expressly
made, a part of this Indenture.

Section 2.02. Title and Terms.

     The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.

     The  Securities  may be  issued  in one or more  Series.  The terms of each
Series shall be as provided in an Authorizing  Resolutions  and/or  supplemental
indenture (if any) or shall be determined in the manner specified  therein.  The
terms to be specified in respect of each Series in the  Authorizing  Resolutions
and/or  supplemental  indenture (if any), or by such Person and/or procedures as
shall be provided therein, shall include the following:

     (1) the title of the  Securities  of such Series,  which shall  distinguish
such Series from all other Series;

     (2) any limit upon the aggregate principal amount of the Securities of such
Series which may be authenticated and delivered under this Indenture (except for
Securities of such Series  authenticated  and  delivered  upon  registration  of
transfer  of, or in exchange  for, or in lieu of, other  Securities  pursuant to
Section 2.07, 2.08, 2.11, 3A.08 or 9.05);

     (3) the date or dates on which  the  principal  of the  Securities  of such
Series is payable, and, if the Series shall be Extendible Securities,  the terms
on which the  Company  or any other  Person  shall have the option to extend the
Maturity of such  Securities  and the rights,  if any, of the Holders to require
early repayment of the Securities;

     (4) the rate or rates at which the  Securities  of such  Series  shall bear
interest,  if any  (whether  floating or fixed),  the  provisions,  if any,  for
determining  such interest rate or rates and  adjustments  thereto,  the date or
dates from which such interest shall accrue or the method for  determining  such
date or dates,  the Interest Payment Dates therefor and the Regular Record Dates
for the  determination  of  Holders  of the  Securities  of such  Series to whom
interest  is  payable  and the  basis  upon  which  interest,  if any,  shall be
calculated if other than that of a 360-day year of twelve 30-day months;

     (5) the place or places  where  the  principal  of,  premium,  if any,  and
interest  on  Securities  of such  Series  shall be  payable  (if other  than as
provided in Section  4.02),  where  Securities of such Series may be surrendered
for registration of transfer or exchange and where notices or demands to or upon
the Company in respect of  Securities  of such Series and this  Indenture may be
served;

     (6) the price or prices at which,  the period or periods  within  which and
the terms and  conditions  upon which the  Securities  of such  Series may be re
deemed, in whole or in part, at the option of the Company, pursuant to a Sinking
Fund or otherwise;

     (7) the  obligation,  if any, of the  Company to redeem,  purchase or repay
Securities  of such Series,  in whole or in part,  pursuant to a Sinking Fund or
otherwise  or at the  option  of a Holder  thereof,  and the  price or prices at
which,  the period or periods  within  which and the terms and  conditions  upon
which such redemption, purchase or repayment shall be made;

     (8) any  deletions  from,  modifications  of or  additions to the Events of
Default  provided for herein with respect to the Securities of such Series,  and
any  deletions  from,   modifications  of  or  additions  to  the  covenants  or
obligations  provided for herein of the Company to the Holders of the Securities
of such Series;

     (9) if less than 100% of the  principal  amount of the  Securities  of such
Series is payable on  acceleration  under  Section 6.02 or in  bankruptcy  under
Section 6.09 at any time,  a schedule of or the manner of computing  the amounts
which are so payable from time to time;

     (10) the form of the  Securities  of such  Series,  including  whether  the
Securities of such Series shall be issued in whole or in part in the form of one
or more Global Securities and, in such case, the Depository with respect to such
Global  Security  or  Securities  and the  circumstances  under which any Global
Security  may be  registered  for  transfer or exchange,  or  authenticated  and
delivered, in the name of a Person other than such Depository or its nominee, if
other than as set forth in Section 2.07;

     (11) if other than United  States  dollars,  the currency or  currencies in
which  payment of the principal of or premium,  if any, or interest,  if any, on
the Securities of such Series shall be payable;

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

     (13) if the amount of  payments  of  principal  of or  premium,  if any, or
interest,  if any,  on the  Securities  of such  Series may be  determined  with
reference to an index based on a currency or currencies other than that in which
the Securities are stated to be payable,  the manner in which such amounts shall
be determined;

     (14)  whether  and  under  what  circumstances  the  Company  will  pay any
additional  amounts  on the  Securities  of such  Series in  respect of any tax,
assessment or governmental  charge and, if so, whether the Company will have the
option to redeem the Securities of such Series in lieu of making such payment;

     (15) any provision relating to the issuing of the Securities of such Series
as Original Issue Discount Securities (including,  without limitation, the issue
price thereof, the rate or rates at which such original issue discount,  if any,
shall accrue and the date or dates from or to which, or period or periods during
which, such original issue discount shall accrue at such rate or rates);

     (16) if other  than  denominations  of  $1,000  and any  integral  multiple
thereof, the denominations in which Securities of such Series shall be issued;

     (17) whether  either or both of  Defeasance  or Covenant  Defeasance  shall
apply to the  Securities  of such Series and terms,  conditions  or  limitations
which may be imposed in connection  therewith in addition to those  contained in
Article 8; and

     (18) any other terms of the Securities of such Series;  provided, that such
other terms shall not  conflict  with any express  terms of any other  Series of
Securities which shall be issued and outstanding.

     Any Series of Securities may be reopened and additional  Securities of such
Series may be issued without the consent of the Holders of such Series.

     All Securities of any one Series shall be  substantially  identical in form
except  as to  denomination  and  except  as may be  otherwise  provided  in and
pursuant to the Authorizing  Resolutions and/or supplemental  indenture (if any)
relating  thereto.  All  Securities and Guarantees of any one Series need not be
issued  at the same time and may be issued  from time to time,  consistent  with
this Indenture,  if so provided by or pursuant to such  Authorizing  Resolutions
and/or supplemental indenture (if any) relating thereto.

     Any such  Authorizing  Resolutions  with respect to the  Securities  of any
Series and Guarantees  filed with the Trustee on or before the initial  issuance
of the Securities of such Series and Guarantees shall be incorporated  herein by
reference  with respect to  Securities of such Series and  Guarantees  and shall
thereafter be deemed to be a part of this Indenture for all purposes relating to
the Securities of such Series and Guarantees as if such Authorizing  Resolutions
were set forth herein in full.

Section 2.03. Execution and Authentication.

     The  Securities  shall  be  executed  on  behalf  of the  Company  and  the
Guarantees  endorsed  thereon  shall be  executed  on behalf of the  Guarantors,
respectively, by two Officers or an Officer and the Secretary.

     If an Officer or a Secretary  whose signature is on a Security or Guarantee
no longer holds that office at the time the Trustee  authenticates the Security,
the Security and such Guarantee shall be valid nevertheless.

     The Security and Guarantees  endorsed  thereon shall not be valid until the
Trustee manually signs the certificate of  authentication  on the Security.  The
signature  shall be conclusive  evidence that the Security and  Guarantees  have
been properly executed and, if applicable, authenticated under this Indenture.

     At any time and from time to time after the  execution and delivery of this
Indenture,  the  Company may deliver  Securities  of any Series  executed by the
Company to the Trustee, and with Guarantees endorsed thereon and executed by the
Guarantors, together with a Company Order for the authentication and delivery of
such Securities. The Company Order may provide that the Securities which are the
subject  thereof  shall be  authenticated  and delivered by the Trustee upon the
telephonic,  written or other order of Persons  designated in the Company Order,
and that such Persons are authorized to specify the terms and conditions of such
Securities,  to the  extent  permitted  by the  Authorizing  Resolutions  and/or
supplemental  indenture (if any) relating thereto. The Trustee shall execute and
deliver the supplemental  indenture (if any) relating to said Securities and the
Trustee  shall  authenticate  and deliver said  Securities  as specified in such
Company Order;  provided that, prior to authentication and delivery of the first
Securities of any Series, the Trustee shall have received:

     (1) a copy  of the  Authorizing  Resolutions,  with a copy  of the  form of
Security and the Guarantees approved thereby attached thereto, or a supplemental
indenture  in respect of the  issuance of the  Securities  of the Series and the
Guarantees, executed on behalf of the Company and the Guarantors, as applicable;

     (2) an  Officers'  Certificate  to the effect that the  Securities  of such
Series  comply or will comply with the  requirements  of this  Indenture and the
said Authorizing Resolutions and/or supplemental indenture (if any);

     (3) an Opinion of  Counsel:  (a) to the effect that (i) the  Securities  of
such  Series  and  the  Guarantees,   the  Authorizing  Resolutions  and/or  the
supplemental  indenture (if any) relating thereto comply or will comply with the
requirements of this  Indenture,  and (ii) the Securities of such Series and the
Guarantees,  when authenticated,  if applicable, and delivered by the Trustee in
accordance  with the said  Company  Order,  will  constitute  valid and  binding
obligations of the Company and the  Guarantors,  as  applicable,  enforceable in
accordance with their terms,  subject to (A) bankruptcy and other laws affecting
creditors'  rights  generally as in effect from time to time, (B) limitations of
generally applicable equitable principles and (C) other exceptions acceptable to
the  Trustee and its  counsel;  and (b)  relating  to such other  matters as may
reasonably be requested by the Trustee or its counsel; and

     (4) if the Securities to be issued are Original Issue Discount  Securities,
an Officers'  Certificate setting forth the Yield to Maturity for the Securities
or other  information  sufficient  to compute  amounts due on  acceleration,  or
specifying the manner in which such amounts are to be determined, pro vided that
such Yield to  Maturity  and other  facts are not  specified  in the form of the
Securities.

     Subject to Section 7.01  hereof,  the Trustee  shall be fully  protected in
relying upon the documents  delivered to it as provided above in connection with
the issuance of any Series of Securities.

     The Trustee shall have the right to decline to authenticate and deliver any
Securities  under this Section 2.03 if the  Trustee,  being  advised by counsel,
determines  that such action may not lawfully be taken or if the Trustee in good
faith by a committee  of its Trust  Officers  shall  determine  that such action
would  expose the  Trustee to  liability  to  Holders of  previously  issued and
outstanding Securities.

     Each  Security  shall  be  dated  the  date  of its  authentication  unless
otherwise specified in the Authorizing Resolutions and/or supplemental indenture
relating thereto.

     The Trustee may appoint an  authenticating  agent reasonably  acceptable to
the Company to authenticate Securities. An authenticating agent may authenticate
Securities  whenever the Trustee may do so. Each  reference in this Indenture to
authentication  by  the  Trustee  includes  authentication  by  such  agent.  An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company

     The  Securities of each Series shall be issuable  only in  registered  form
without coupons and only in  denominations  of $1,000 and any integral  multiple
thereof, or in such other currencies or denominations as may be specified in, or
pursuant to, the Authorizing  Resolutions and/or supplemental indenture (if any)
relating to the Series.

     If  Securities  of any  Series  are to be issued in the form of one or more
Global  Securities,  then the Company  shall  deliver  such  Global  Security or
Securities executed by the Company to the Trustee, together with a Company Order
for the authentication  and delivery of such Global Security or Securities,  and
the Trustee shall,  in accordance with this Section 2.03 and such Company Order,
authenticate  and deliver  such Global  Security  or  Securities  that (i) shall
represent and shall be denominated in an amount equal to the aggregate principal
amount of all of the  Securities of such Series to be issued in the form of such
Global Security or Securities and not yet cancelled, (ii) shall be registered in
the name of the Depository for such Global Security or Securities or the nominee
of such  Depository,  (iii) shall be delivered by the Trustee to such Depository
or  pursuant  to such  Depository's  instructions  and (iv)  shall bear a legend
substantially  to the  following  effect:  "Unless  and until this  Security  is
exchanged in whole or in part for Securities in certificated form, this Security
may not be  transferred  except as a whole by the Depository to a nominee of the
Depository  or by a nominee  of the  Depository  to the  Depository  or  another
nominee of the  Depository  or by the  Depository  or its nominee to a successor
Depository or its nominee."

     Each Depository  designated must, at the time of its designation and at all
times while it serves as Depository,  be a clearing agency  registered under the
Securities Exchange Act of 1934, as amended, and any other applicable statute or
regulation.

Section 2.04. Registrar and Paying Agent.

     The Company shall cause to be kept a register (the "Security  Register") at
an office or agency  where  Securities  may be  presented  for  registration  of
transfer or for exchange  ("Registrar") and an office or agency where Securities
may be presented for payment ("Paying Agent").  The Company may have one or more
co-Registrars and one or more additional paying agents.  The term "Paying Agent"
includes any additional paying agent.

     The Company shall enter into an appropriate agency agreement with any Agent
not a party to this  Indenture.  The agreement shall implement the provisions of
this Indenture that relate to such Agent.  The Company shall give prompt written
notice to the  Trustee of the name and address of any such Agent and the Trustee
shall have the right to inspect the Security  Register at all  reasonable  times
and to obtain  copies  thereof.  If the  Registrar  shall not be the  Trustee in
respect of any Series, the Company shall promptly notify the Registrar as to the
amounts and terms of each  Security of such Series which shall be  authenticated
and delivered  hereunder,  and as to the names in which such Securities shall be
registered.  If the Company fails to maintain a Registrar or Paying  Agent,  the
Trustee  shall act as such and shall be  entitled  to  appropriate  compensation
therefor pursuant to Section 7.07.

     The Company initially appoints the Trustee as Registrar and Paying Agent.

Section 2.05. Paying Agent to Hold Money In Trust.

     Each Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by the Paying Agent for the payment of principal  of,
premium, if any, or interest on the Securities (whether such money has been paid
to it by the Company or any other obligor on the  Securities),  and shall notify
the  Trustee  of any  default  by the  Company  (or  any  other  obligor  on the
Securities) in making any such payment.  If the Company or a Subsidiary  acts as
Paying Agent, it shall segregate the money and hold it as a separate trust fund.
The Company at any time may  require a Paying  Agent to pay all money held by it
to the Trustee and  account for any funds  disbursed  and the Trustee may at any
time during the  continuance of any payment  default,  upon written request to a
Paying  Agent,  require  such  Paying  Agent to pay all money  held by it to the
Trustee and to account for any funds  disbursed.  Upon doing so the Paying Agent
shall have no further liability for the money.

Section 2.06. Securityholder Lists.

     The  Trustee  shall  preserve  in  as  current  a  form  as  is  reasonably
practicable  the most recent list  furnished to it of the names and addresses of
Securityholders.  If the Trustee is not the Registrar, the Company shall furnish
to the  Trustee ten days before  each  Interest  Payment  Date and at such other
times as the  Trustee  may request in writing a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of Holders
of Securities of any Series and the Company shall otherwise  comply with Section
312(a) of the TIA.

     The Trustee shall be entitled to rely upon a certificate  of the Registrar,
the Company or such other Paying Agent,  as the case may be, as to the names and
addresses of the Holders of Securities  of any Series and the principal  amounts
and serial numbers of such Securities.

Section 2.07. Transfer and Exchange.

     When  Securities  are presented to the Registrar or a  co-Registrar  with a
request to register  the  transfer or to  exchange  them for an equal  principal
amount of Securities of the same Series and Stated Maturity of other  authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested  if  its  requirements  for  such  transactions  are  met.  To  permit
registrations  of transfers  and  exchanges,  the Company  shall execute and the
Trustee  shall  authenticate  Securities  at the  Registrar's  request,  and the
Guarantors  shall each execute the Guarantees  endorsed on such  Securities.  No
service charge shall be made to any Holder for any  registration  of transfer or
exchange, but the Company or the Trustee may require payment of a sum sufficient
to cover any transfer tax or similar  governmental  charge payable in connection
therewith  (other than any such transfer  taxes or similar  governmental  charge
payable upon  exchanges  pursuant to Section  2.11,  3A.08 or 9.05 in which case
such  transfer  taxes  or  similar  governmental  charges  shall  be paid by the
Company).

     The Company shall not be required (i) to issue, register the transfer of or
exchange any Security of any Series during a period  beginning at the opening of
the day which is 15  Business  Days before the day of the mailing of a notice of
redemption of Securities of such Series  selected for  redemption  under Section
3A.04 or 3B.01 and ending at the close of business  on the day of such  mailing,
or (ii) to register  the  transfer of or exchange  any  Security so selected for
redemption  in whole  or in part,  except,  in the  case of any  Security  to be
redeemed in part, the portion thereof not to be redeemed.

     Notwithstanding  any other provision of this Section 2.07, unless and until
it  is  exchanged  in  whole  or in  part  for  Securities,  a  Global  Security
representing  all or part of the  Securities of a Series may not be  transferred
except  as a whole  by the  Depository  for such  Series  to a  nominee  of such
Depository  or by a nominee of such  Depository  to such  Depository  or another
nominee  of such  Depository  or by such  Depository  or any such  nominee  to a
successor Depository for such Series or a nominee of such successor Depository.

     If at any time the Depository for any Securities of a Series represented by
one or more Global  Securities  notifies  the Company  that it is  unwilling  or
unable  to  continue  as  Depository  for  such  Series  or if at any  time  the
Depository  for such Series shall no longer be eligible  under Section 2.03, the
Company shall appoint a successor  Depository with respect to such Series.  If a
successor  Depository  for such Series is not appointed by the Company within 90
days  after  the  Company   receives  such  notice  or  becomes  aware  of  such
ineligibility,  or an Event of Default occurs and is  continuing,  the Company's
election that the  Securities be  represented  by one or more Global  Securities
pursuant to Section  2.02 shall no longer be  effective  and the  Company  shall
deliver to the Trustee  Securities of such Series  executed by the Company,  and
with Guarantees endorsed thereon and executed by the Guarantors, together with a
Company Order for the  authentication  and delivery of such Securities,  and the
Trustee  shall,  in  accordance  with  Section  2.03  and  such  Company  Order,
authenticate  and  deliver   Securities  of  such  Series,   in  any  authorized
denominations, in an aggregate principal amount equal to the principal amount of
the Global Security or Securities  representing such Series in exchange for such
Global Security or Securities.

     The Company may at any time and in its sole  discretion  determine that the
Securities  of any Series  issued in the form of one or more  Global  Securities
shall no longer be represented by a Global Security or Securities. In such event
the Company shall deliver to the Trustee  Securities of such Series  executed by
the  Company,   and  with  Guarantees  endorsed  thereon  and  executed  by  the
Guarantors, together with a Company Order for the authentication and delivery of
such Securities, and the Trustee shall, in accordance with Section 2.03 and such
Company  Order,  authenticate  and deliver  Securities  of such  Series,  in any
authorized  denominations,  in  an  aggregate  principal  amount  equal  to  the
principal amount of the Global Security or Securities  representing such Series,
in exchange for such Global Security or Securities.

     If  specified  by  the  Company  in  the  Authorizing   Resolutions  and/or
supplemental  indenture  (if  any)  relating  to  the  Securities  of  a  Series
represented by a Global  Security,  the Depository for such Series may surrender
such Global  Security in exchange in whole or in part for Securities of the same
Series  on such  terms as are  acceptable  to the  Company  and the  Depository.
Thereupon,  the Company shall  deliver to the Trustee  Securities of such Series
executed by the Company,  and with Guarantees  endorsed  thereon and executed by
the  Guarantors,  together  with a  Company  Order  for the  authentication  and
delivery of such  Securities,  and the Trustee shall, in accordance with Section
2.03 and such Company Order, authenticate and deliver, without charge,

     (1)  to  the  Person  specified  by  such  Depository,  a new  Security  or
Securities of the same Series,  in any authorized  denominations as requested by
such Person, in an aggregate  principal amount equal to and in exchange for such
Person's beneficial interest in the Global Security; and

     (2) to such Depository a new Global Security in a denomination equal to the
difference,  if any,  between the  principal  amount of the  surrendered  Global
Security and the  aggregate  principal  amount of Securities  authenticated  and
delivered  pursuant to clause (1) above.  Upon the exchange of a Global Security
for the Securities of a Series represented thereby, in authorized denominations,
such  Global  Security  shall be  cancelled  by the  Trustee  or an Agent of the
Company or the Trustee.  Securities  of a Series issued in exchange for a Global
Security  pursuant to this Section 2.07 shall be registered in such names and in
such  authorized  denominations  as the  Depository  for such  Global  Security,
pursuant to instructions from its direct or indirect  participants or otherwise,
shall  instruct  the  Trustee  or an Agent of the  Company or the  Trustee.  The
Trustee or such Agent  shall  deliver at its  office  such  Securities  to or as
directed by the Persons in whose names such Securities are so registered.

Section 2.08. Replacement Securities.

     If a mutilated Security is surrendered to the Trustee or if the Holder of a
Security claims that the Security has been lost,  destroyed or wrongfully taken,
the  Company  shall  issue and the  Trustee  shall  authenticate  a  replacement
Security  of like  tenor,  Series  and  principal  amount,  bearing a number not
assigned to any Security of the same Series then  outstanding,  if the Trustee's
requirements are met, and the Guarantors  shall execute the Guarantees  endorsed
on such Security.  If required by the Trustee or the Company,  an indemnity bond
must be  sufficient  in the judgment of the Trustee to protect the Company,  the
Trustee or any Agent from any loss which any of them may suffer if a Security is
replaced.  The Company may charge  such Holder for its  expenses in  replacing a
Security.

     Replacement  Securities  and  Guarantees  endorsed  thereon are  additional
obligations of the Company and the related Guarantor, as the case may be.

Section 2.09. Outstanding Securities.

     Securities, or Securities of any particular Series, outstanding at any time
are all such  Securities  that  have been  authenticated  and  delivered  by the
Trustee except for those cancelled by it, those delivered to it for cancellation
and those described in this Section as not outstanding. Subject to Section 2.10,
a Security  does not cease to be  outstanding  because the Company or one of its
Affiliates holds the Security.

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

     If the Trustee or Paying  Agent  (other  than the Company or a  Subsidiary)
holds on the Maturity Date or Redemption Date money sufficient to pay Securities
payable on such date,  then on and after that date such  Securities  cease to be
outstanding  and  interest  on them  ceases to accrue;  provided  that,  if such
Securities  are to be redeemed,  notice of such  redemption  has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made.

Section 2.10. Treasury Securities.

     In  determining  whether the Holders of the  required  principal  amount of
Securities of any Series have concurred in any direction,  waiver or consent (a)
the principal  amount of an Original  Issue Discount  Security,  if any, of such
Series that shall be deemed to be  outstanding  for such  purposes  shall be the
amount  that  would be due and  payable as of the date of  determination  upon a
declaration of acceleration  thereof pursuant to Section 6.02 and (b) Securities
of such Series owned by the Company,  a Guarantor or an Affiliate of the Company
or a Guarantor shall be disregarded, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction,  waiver
or consent,  only Securities of such Series which the Trustee actually knows are
so owned shall be so disregarded.  Upon the request of the Trustee,  the Company
shall furnish to the Trustee an Officers' Certificate identifying all Securities
of such Series,  if any,  known by the Company to be owned by it, a Guarantor or
any Affiliate of the Company or of any Guarantor.

Section 2.11. Temporary Securities.

     Until  definitive  Securities  of any  Series are ready for  delivery,  the
Company may prepare and execute and, upon  compliance  with the  requirements of
Section  2.03,  the Trustee  shall  authenticate  temporary  Securities  of such
Series,  with  Guarantees  endorsed  thereon  and  executed  by the  Guarantors.
Temporary  Securities  of any  Series  shall  be  substantially  in the  form of
definitive  Securities of such Series but may have  variations  that the Company
considers appropriate for temporary Securities. In the case of Securities of any
Series,  such temporary  Securities may be in global form. Except in the case of
temporary  Global  Securities  (which shall be  exchanged as otherwise  provided
herein or as otherwise provided in or pursuant to Authorizing Resolutions and/or
a supplemental  indenture,  (if any), without  unreasonable  delay), the Company
shall prepare and the Trustee shall authenticate  definitive Securities for such
Series in exchange for  temporary  Securities  of such Series,  with  Guarantees
endorsed  thereon and  executed by the  Guarantors,  in an exchange  pursuant to
Section 2.07.

Section 2.12. Cancellation.

     The  Company  at  any  time  may  deliver  Securities  to the  Trustee  for
cancellation.  The  Registrar  and the Paying Agent shall forward to the Trustee
any  Securities  surrendered  to them for  transfer,  exchange or  payment.  The
Trustee and no one else shall cancel all  Securities  surrendered  for transfer,
exchange, payment or cancellation or for credit against any Sinking Fund Payment
in respect of such Series  pursuant to Section 3B.02.  The Company may not issue
new Securities to replace Securities it has paid or delivered to the Trustee for
cancellation.

Section 2.13. Defaulted Interest.

     If the Company  defaults in a payment of interest on the  Securities of any
Series,  it shall pay the defaulted  interest,  plus any interest payable on the
defaulted interest, to the extent lawful, to the Persons who are Holders of such
Securities on a subsequent  special record date ("Special Record Date") and such
term,  as used in this Section 2.13 with respect to the payment of any defaulted
interest,  shall mean the  fifteenth  day next  preceding  the date fixed by the
Company  for the  payment of  defaulted  interest,  whether or not such day is a
Business Day. At least 15 days before the Special Record Date, the Company shall
mail to each holder of such  Securities a notice that states the Special  Record
Date, the payment date and the amount of defaulted interest to be paid.

Section 2.14. Persons Deemed Owners.

     The Company, any Guarantor,  the Trustee and any Agent may treat the Person
in whose name any Security is  registered  as the owner of such Security for the
purpose of receiving  payment of principal of, premium,  if any, and (subject to
Section 2.13)  interest on such Security and for all other  purposes  whatsoever
whether or not such Security  shall have matured,  and none of the Company,  any
Guarantor,  the  Trustee  or any Agent  shall be  affected  by any notice to the
contrary.

                                   ARTICLE 3A

                                   Redemption

Section 3A.01. Right of Redemption.

     Redeemable  Securities may be redeemed otherwise than through the operation
of the Sinking Fund provided for in Article 3B at the election of the Company at
the times, on the conditions and at the Redemption Prices specified therein,  in
(or  pursuant  to)  the  Authorizing  Resolutions  relating  thereto  or in  the
supplemental indenture (if any) executed in connection with the issuance of such
Securities  to  the  extent  provided  therein,   any  Redemption  Price  to  be
accompanied by accrued interest to the Redemption Date.

Section 3A.02. Applicability of Article.

     Redemption of  Securities  at the election of the Company or otherwise,  as
permitted or required by any provision  referred to in Section  3A.01,  shall be
made in accordance with such provision and this Article.

Section 3A.03. Election to Redeem; Notice to Trustee.

     The election of the Company to redeem any Securities of any Series shall be
evidenced by a Board Resolution or set forth in an Officers'  Certificate  which
states that such election has been duly  authorized  by all requisite  corporate
action on the part of the Company.  The Company shall, at least 60 days prior to
the  Redemption  Date fixed by the  Company  (unless a shorter  notice  shall be
satisfactory to the Trustee),  notify the Trustee of such Redemption Date and of
the principal  amount of Securities of the Series or the several Series,  as the
case may be, to be redeemed.  In the case of any redemption of Securities  prior
to  the  expiration  of any  restriction  on  such  redemption  provided  in the
Securities or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officers' Certificate evidencing compliance with such restriction.

Section 3A.04. Selection by Trustee of Securities to be Redeemed.

     If less than all the  Securities  of any  Series  are to be  redeemed,  the
particular  Securities of such Series to be redeemed  shall be selected not more
than 90 days prior to the Redemption  Date by the Trustee,  from the outstanding
Securities  of such Series not  previously  called for  redemption on a pro rata
basis or by lot, as the Trustee deems  appropriate in its sole  discretion.  The
Trustee may select for  redemption  portions  (equal to the  minimum  authorized
denomination  of the Series or any integral  multiple  thereof) of the principal
amount  of  such   Securities  of  a  denomination   larger  than  such  minimum
denomination. If the Company shall so specify, Securities held by the Company or
any Guarantor or any of their respective Subsidiaries or Affiliates shall not be
included in the Securities selected for redemption.

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

     For all purposes of this Indenture,  unless the context otherwise requires,
all  provisions  relating to the redemption of Securities  shall relate,  in the
case of any  Securities  redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.

Section 3A.05. Notice of Redemption.

     Notice of redemption  shall be given by first class mail,  postage prepaid,
mailed not less than 30 nor more than 60 days prior to the  Redemption  Date, to
each  Holder of  Securities  to be  redeemed,  at his address  appearing  in the
Security Register.

          All notices of redemption shall state:

          (1) the Redemption Date;

          (2) the Redemption Price;

          (3) if less than all outstanding Securities of the Series are to be re
deemed,  the  identification  (and,  in the  case  of  partial  redemption,  the
principal amount) of the particular Securities to be redeemed;

          (4) that on the Redemption  Date the Redemption  Price will become due
and payable upon each such  Security,  and that interest  thereon shall cease to
accrue on and after said date;

          (5) that the  redemption  is for a Sinking  Fund, if such is the case;
and

          (6) the place or places where such  Securities  are to be  surrendered
for payment of the Redemption Price.

                                   ARTICLE 3B

                                  Sinking Fund

Section 3B.01. Sinking Fund Payments.

     As and for a Sinking Fund for the  retirement  of Sinking Fund  Securities,
the Company will,  until all such Securities are paid or payment thereof is duly
provided  for,  deposit in  accordance  with  Section  3A.06,  at such times and
subject to such terms and  conditions as shall be specified in the provisions of
such Securities and the Authorizing  Resolutions and/or  supplemental  indenture
(if any) relating thereto,  such amounts in cash or such other Required Currency
as shall be  required  or  permitted  under such  provisions  in order to redeem
Securities  on the  specified  Redemption  Dates at a Redemption  Price equal to
their principal amounts, less in each such case the amount of any credit against
such payment received by the Company under Section 3B.02. Each such Sinking Fund
payment  shall be applied  to the  redemption  of  Securities  on the  specified
Redemption Date as herein provided.

Section 3B.02. Satisfaction of Sinking Fund Payments with Securities.

     The Company (1) may deliver  Securities  of the same Series (other than any
Securities  of such  Series  previously  called for  redemption  pursuant to the
Sinking Fund or theretofore  applied as a credit against a Sinking Fund payment)
and (2) may apply as a credit  Securities  of the same  Series  redeemed  at the
election of the Company  pursuant to Section  3A.01 or through the  operation of
the Sinking Fund in any period in excess of the minimum amount required for such
period under Section  3B.01 and not  theretofore  applied as a credit  against a
Sinking Fund  payment,  in each case in  satisfaction  of all or any part of any
Sinking Fund payment  required to be made pursuant to Section  3B.01.  Each such
Security  so  delivered  or applied  shall be credited  for such  purpose by the
Trustee at a Redemption  Price equal to its principal  amount or, in the case of
an Original Issue Discount  Security,  its then accreted value, and the required
amount of such  Sinking  Fund payment in respect of such Series shall be reduced
accordingly.

Section 3B.03. Redemption of Securities for Sinking Fund.

     If in any year the  Company  shall elect to redeem in excess of the minimum
principal amount of Securities of any Series required to be redeemed pursuant to
Section  3B.01 or to  satisfy  all or any part of any  Sinking  Fund  payment by
delivering or crediting Securities of the same Series pursuant to Section 3B.02,
then at least 45 days  prior to the date on which the  Sinking  Fund  payment in
question  shall be due,  the Company  shall  deliver to the Trustee an Officers'
Certificate  specifying  the amount of the Sinking Fund payment and the portions
thereof  which are to be  satisfied  by payment  of cash or such other  Required
Currency, by delivery of Securities of such Series or by crediting Securities of
such  Series,  and, at least 45 days prior to the Sinking  Fund payment date (or
such shorter  period as shall be approved by the Trustee),  will also deliver to
the Trustee the  Securities  of such Series to be so delivered.  Such  Officers'
Certificate  shall also state that the Securities  forming the basis of any such
credit do not  include  any  Securities  which have been  redeemed  through  the
operation of the Sinking Fund in the minimum amount required under Section 3B.01
or previously credited against any Sinking Fund payment. The Trustee shall, upon
the receipt of such  Officers'  Certificate  (or, if it shall not have  received
such an Officers' Certificate at least 45 days prior to the Sinking Fund payment
date, then following such 45th day),  select the Securities of such Series to be
redeemed  upon the next Sinking Fund payment  date,  in the manner  specified in
Section  3A.04,  and cause notice of the  redemption  thereof to be given in the
name of and at the  expense of the  Company in the  manner  provided  in Section
3A.05.  Such notice having been duly given,  the  redemption of such  Securities
shall be made upon the terms and in the manner stated in Sections  3A.06,  3A.07
and 3A.08.

                                    ARTICLE 4

                                    Covenants

Section 4.01. Payment of Securities.

     The Company shall pay the principal  of,  premium,  if any, and interest on
the  Securities  of each  Series on the dates and in the manner  provided in the
Securities and in this Indenture. An installment of principal,  premium, if any,
or interest  shall be  considered  paid on the date due if the Trustee or Paying
Agent  (other  than  the  Company  or a  Subsidiary)  holds on that  date  money
designated for and sufficient to pay the installment.

     The Company shall pay interest on overdue principal at the respective rates
borne by such Securities or, in the case of Original Issue Discount  Securities,
at rates  equal to the  respective  Yields  to  Maturity  thereof;  it shall pay
interest on overdue  installments  of interest at the respective  rates borne by
such Securities to the extent lawful.

Section 4.02. Maintenance of Office or Agency.

     Except  as  otherwise  provided  in  the  Authorizing   Resolutions  and/or
supplemental  indenture  (if any)  relating  to any  Series,  the  Company  will
maintain in The City of New York,  an office or agency where  Securities  may be
surrendered  for  registration of transfer or exchange or for  presentation  for
payment  and where  notices and demands to or upon the Company in respect to the
Securities  and this  Indenture  may be served.  The  Company  will give  prompt
written  notice to the Trustee of the location,  and any change in the location,
of such office or agency.  If at any time the Company shall fail to maintain any
such  required  office or agency or shall fail to furnish the  Trustee  with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office.

     The Company may also from time to time  designate one or more other offices
or agencies  where the  Securities  of any Series or a particular  Series may be
presented or surrendered  for any or all such purposes and may from time to time
rescind such  designations;  provided,  that no such  designation  or rescission
shall in any manner  relieve the Company of its obligation to maintain an office
or agency in The City of New York,  for such  purposes.  The  Company  will give
prompt written  notice to the Trustee of any such  designation or rescission and
of any change in the location of any such other office or agency.

     The  Company  hereby  initially  designates  the Trustee in The City of New
York, as an agency of the Company in accordance with Section 2.04.

Section 4.03. Corporate Existence.

     Subject  to  Article  5 and  Section  4.04,  each  of the  Company  and the
Guarantors will do or cause to be done all things necessary to preserve and keep
in full force and effect its  corporate  existence  and its rights  (charter and
statutory) and material franchises;  provided, however, that neither the Company
nor any  Guarantor  shall be required to preserve any such right or franchise if
the Board of  Directors or  management  of the Company or such  Guarantor  shall
determine that the preservation thereof is no longer desirable in the conduct of
the  business  of the Company and its  Subsidiaries,  taken as a whole,  or such
Guarantor and its Subsidiaries  taken as a whole, as the case may be, and if the
loss  thereof is not, and will not be,  adverse in any  material  respect to the
Holders.

Section 4.04. Reserved.

Section 4.05. Compliance Certificate.

     The Company  shall  deliver to the Trustee  within 90 days after the end of
each fiscal quarter of the Company an Officers'  Certificate  stating whether or
not the signers know of the  existence of any Default or Event of Default by the
Company or the Guarantors and whether all of the conditions and covenants of the
Company and the Guarantors  are being complied with  regardless of any period of
grace or requirement of notice provided under the Indenture.  If they do know of
such a Default or Event of Default,  the certificate  shall describe the Default
or Event of  Default,  as the case may be, and its status.  The first  Officers'
Certificate  to be  delivered  pursuant  to this  Section  4.05 shall be for the
fiscal quarter ending immediately after the Original Issue Date.

Section 4.06. SEC Reports.

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

     (b) So long as the Securities of any Series remain outstanding, the Company
shall  cause  its  annual  report to  stockholders  and any  quarterly  or other
financial reports furnished by it to stockholders to be mailed to the Holders of
Securities outstanding at their addresses appearing in the Security Register.

Section 4.07. Waiver of Stay, Extension or Usury Laws.

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

Section 4.08. Restrictions on Liens.

     Neither  the  Company  nor any  Guarantor  will  incur,  create,  assume or
otherwise  become  liable in respect of any  Indebtedness  secured by a Lien, or
guarantee any  Indebtedness  with a guarantee which is secured by a Lien, on any
Principal  Domestic Property of the Company or a Guarantor as the case may be or
any  shares of stock or  Indebtedness  of any  Significant  Subsidiary,  without
effectively  providing that the Securities of each Series (together with, if the
Company  or a  Guarantor  as the  case  may be shall  so  determine,  any  other
Indebtedness  of the Company or a Guarantor then existing or thereafter  created
ranking equally with the Securities of each Series) shall be secured equally and
ratably  with (or, at the option of the  Company or a Guarantor  as the case may
be, prior to) such secured  Indebtedness,  so long as such secured  Indebtedness
shall be so secured;  provided,  however, that this Section 4.08 shall not apply
to Indebtedness secured by:

     (1) Liens existing on the date of this Indenture;

     (2) Liens in favor of governmental  bodies to secure  progress,  advance or
other payments;

     (3) Liens existing on property, shares of stock or Indebtedness at the time
of  acquisition   thereof  (including   acquisition  through  lease,  merger  or
consolidation) or Liens to secure the payment of all or any part of the purchase
price thereof or the cost of construction, installation, renovation, improvement
or development  thereon or thereof or to secure any Indebtedness  incurred prior
to,  at the time of,  or within  360 days  after  the later of the  acquisition,
completion  of  such  construction,  installation,  renovation,  improvement  or
development or the commencement of full operation of such property or within 360
days after the  acquisition  of such shares or  Indebtedness  for the purpose of
financing all or any part of the purchase price thereof;

     (4) Liens securing  Indebtedness in an aggregate  amount which, at the time
of incurrence and together with all outstanding  Attributable Debt in respect of
Sale and Leaseback  Transactions permitted by clause (y) of the second paragraph
of Section  4.09,  does not exceed 10 percent of the  Consolidated  Net Tangible
Assets of the Company;

     (5) Liens to secure Indebtedness other than Funded Debt; and

     (6) any  extension,  renewal  or  replacement  (or  successive  extensions,
renewals or  replacements),  in whole or in part, of any Lien referred to in the
foregoing clauses (1) to (5) inclusive;  provided, that such extension,  renewal
or  replacement of such Lien is limited to all or any part of the same property,
shares of stock or  Indebtedness  that  secured  the Lien  extended,  renewed or
replaced  (plus   improvements  on  such   property),   and  that  such  secured
Indebtedness at such time is not increased.

     If at any time the Company or a Guarantor  as the case may be shall  incur,
create, assume or otherwise become liable in respect of any Indebtedness secured
by a Lien, or guarantee any Indebtedness  with a guarantee which is secured by a
Lien,  on any Principal  Domestic  Property of the Company or a Guarantor as the
case may be or any shares of stock or Indebtedness of any Significant Subsidiary
other than as permitted  under clauses (1) through (6) of this Section 4.08, the
Company or a Guarantor as the case may be shall promptly  deliver to the Trustee
(i) an  Officers'  Certificate  stating  that the  covenant  of the Company or a
Guarantor as the case may be to secure the  Securities  equally and ratably with
such secured  Indebtedness  pursuant to this Section 4.08 has been complied with
and (ii) an Opinion of Counsel  that such  covenant has been  complied  with and
that any  instruments  executed by the Company or a Guarantor as the case may be
in performance of such covenant comply with the requirements of such covenant.

Section 4.09. Restrictions on Sales and Leasebacks.

     Neither the Company nor any  Guarantor  will sell or transfer any Principal
Domestic  Property of the  Company or a  Guarantor  as the case may be, with the
Company or a Guarantor as the case may be taking back a lease of such  Principal
Domestic  Property of the Company (a "Sale and Leaseback  Transaction"),  unless
(i) such Principal  Domestic  Property of the Company or a Guarantor as the case
may be is sold within 360 days from the date of  acquisition  of such  Principal
Domestic  Property of the Company or a Guarantor  as the case may be or the date
of the completion of  construction  or  commencement  of full operations on such
Principal  Domestic  Property of the Company or a Guarantor  as the case may be,
whichever  is later,  or (ii) the  Company  or a  Guarantor  as the case may be,
within  120 days  after  such  sale,  applies  or  causes to be  applied  to the
retirement  of Funded Debt of the  Company or a Guarantor  as the case may be or
any Subsidiary (other than Funded Debt of the Company or a Guarantor as the case
may be which by its terms or the terms of the  instrument  pursuant  to which it
was issued is  subordinate in right of payment to the Securities of each Series)
an amount not less than the greater of (A) the net  proceeds of the sale of such
Principal  Domestic Property of the Company or a Guarantor as the case may be or
(B) the fair  value  (as  determined  in any  manner  approved  by the  Board of
Directors) of such Principal  Domestic Property of the Company or a Guarantor as
the case may be.

     The  provisions of this Section 4.09 shall not prevent a Sale and Leaseback
Transaction  (x) if the lease  entered  into by the  Company or a  Guarantor  in
connection  therewith is for a period,  including renewals,  of not more than 36
months or (y) if the  Company or a  Guarantor  as the case may be would,  at the
time of entering into such Sale and Leaseback Transaction,  be entitled, without
equally and ratably securing the Securities,  to create or assume a Lien on such
Principal Domestic Property of the Company or a Guarantor securing  Indebtedness
in an amount at least equal to the Attributable Debt in respect of such Sale and
Leaseback Transaction pursuant to clause (4) of Section 4.08.

                                    ARTICLE 5

                              Successor Corporation

Section 5.01. When the Company and the Guarantors May Merge, etc.

     Each of the  Company  and  the  Guarantors  covenants  that  it  shall  not
consolidate  with or merge  with or into any  other  Person or  transfer  all or
substantially all of its respective  properties and assets as an entirety to any
Person, unless:

     (1) either the  Company or a  Guarantor,  as the case may be,  shall be the
continuing  Person,  or the Person (if other than the Company or such Guarantor)
formed by such  consolidation  or into which the  Company or such  Guarantor  is
merged or to which all or substantially  all of the properties and assets of the
Company  or the  properties  and assets of such  Guarantor  as an  entirety  are
transferred shall be a corporation  organized and existing under the laws of the
United  States  or any State  thereof  or the  District  of  Columbia  and shall
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Trustee,  in form  satisfactory  to the Trustee,  all the obligations of the
Company or such  Guarantor,  as the case may be,  under the  Securities  of each
Series or the related Guarantees, as applicable, and this Indenture;

     (2)  immediately  before  and  immediately  after  giving  effect  to  such
transaction,  no Event of Default  and no Default  shall  have  occurred  and be
continuing; and

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

     This Section 5.01 shall not prevent or prohibit a transfer which results in
the  termination of the Guarantor's  liabilities  and  obligations  hereunder in
accordance with Section 10.02.

     Notwithstanding the foregoing,  any Guarantor or Subsidiary may consolidate
with, merge with or into or transfer all or part of its properties and assets to
the Company or any other Guarantor or Subsidiary.

Section 5.02. Successor Corporation Substituted.

     Upon any  consolidation or merger,  or any transfer of all or substantially
all of the  properties  and assets of any of the  Company or the  Guarantors  in
accordance  with  Section  5.01,  the  successor   corporation  formed  by  such
consolidation or into which any of the Company or the Guarantors is merged or to
which such  transfer is made shall succeed to, and be  substituted  for, and may
exercise  every  right and power of,  the  Company  or a  Guarantor  under  this
Indenture with the same effect as if such successor  corporation  had been named
as the Company or a Guarantor herein.

                                    ARTICLE 6

                              Default and Remedies

Section 6.01. Events of Default.

     An "Event of  Default"  means,  with  respect to any Series of  Securities,
unless it is either  inapplicable  to a particular  Series or it is specifically
deleted or modified in the Authorizing Resolutions and/or supplemental indenture
(if any) in respect of such Series,  and any other events which may be specified
as  Events  of  Default  in  the  Authorizing  Resolutions  and/or  supplemental
indenture (if any) in respect of such Series:

     (1) the default in the payment of interest on any Securities of such Series
when the same becomes due and payable and the default  continues for a period of
30 days;

     (2) the default in the payment of principal  (or  premium,  if any, on) any
Securities  of such Series when the same becomes due and payable at its Maturity
or  otherwise  or defaults in the deposit of any  Sinking  Fund  installment  in
respect  of such  Series,  when and as  payable  by the terms of  Section  3B.01
hereof;

     (3) the Company or any of the  Guarantors  fail to comply with any of their
other  agreements  contained in the  Securities of such Series or this Indenture
(other than an agreement  relating  exclusively to another Series of Securities)
and the default continues for the period and after the notice specified below;

     (4) the Company or any of the Guarantors  pursuant to or within the meaning
of any Bankruptcy Law:

          (A) commences a voluntary case or proceeding,

          (B)  consents  to the entry of an order for  relief  against  it in an
involuntary case or proceeding,

          (C)  consents to the  appointment  of a Custodian  of it or for all or
substantially all of its property, or

          (D) makes a general assignment for the benefit of its creditors; or

     (5) a court of competent  jurisdiction  enters an order or decree under any
Bankruptcy Law that:

          (A) is for relief  against the Company or any of the  Guarantors in an
involuntary case or proceeding,

          (B) appoints a Custodian of the Company or any of the  Guarantors  for
all or substantially all of its properties, or

          (C) orders the liquidation of the Company or any of the Guarantors,

and in each case the order or decree remains unstayed and in effect for 60 days;

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

     (6) except as permitted by this  Indenture,  any Guarantee shall be held in
any judicial  proceeding to be  unenforceable  or invalid or shall cease for any
reason to be in full force and effect or any  Guarantor or any Person  acting on
behalf of such  Guarantor  shall deny or disaffirm  its  obligations  under such
Guarantee; or

     A Default  under  clause (3) is not an Event of Default  until the  Trustee
notifies the Company,  or the Holders of at least 25% in principal amount of the
outstanding Securities of such Series notify the Company and the Trustee, of the
Default and the Company does not cure the Default  within 60 days after  receipt
of the notice.  The notice must specify the Default,  demand that it be remedied
and state that the notice is a "Notice of Default." When a Default is cured,  it
ceases. Such notice shall be given by the Trustee if so requested by the Holders
of at least  25% in  principal  amount of the  Securities  of such  Series  then
outstanding.

     Subject to the  provisions of Sections 7.01 and 7.02, the Trustee shall not
be charged with  knowledge of any Event of Default unless written notice thereof
shall have been given to a Trust  Officer at the  corporate  trust office of the
Trustee by the Company, the Paying Agent, any Holder or an agent of any Holder.

Section 6.02. Acceleration.

     If an Event of Default (other than an Event of Default specified in Section
6.01(4)  or  (5))  with  respect  to  Securities  of any  Series  occurs  and is
continuing,  the  Trustee  may, by notice to the  Company,  or the Holders of at
least 25% in principal amount of such Securities of such Series then outstanding
may, by notice to the Company and the Trustee,  and the Trustee shall,  upon the
request of such Holders, declare all unpaid principal of (or, if such Securities
are Original Issue Discount Securities,  such portion of the principal amount as
may then be payable on acceleration as provided in the terms thereof),  premium,
if any, and accrued but unpaid  interest to the date of acceleration on all such
Securities of such Series then  outstanding  (if not then due and payable) to be
due and payable  and,  upon any such  declaration,  the same shall become and be
immediately due and payable. If an Event of Default specified in Section 6.01(4)
or (5) occurs, all unpaid principal of (or, if any Securities are Original Issue
Discount Securities, such portion of the principal amount as may then be payable
on acceleration as provided in the terms thereof),  premium, if any, and accrued
but unpaid  interest on all  Securities of every Series then  outstanding  shall
ipso facto become and be immediately  due and payable without any declaration or
other act on the part of the Trustee or any Securityholder. Upon payment of such
principal  amount,   premium,  if  any,  and  interest,  all  of  the  Company's
obligations under such Securities of such Series and this Indenture with respect
to such Securities of such Series,  other than  obligations  under Section 7.07,
shall  terminate.  The  Holders  of  a  majority  in  principal  amount  of  the
outstanding  Securities of such Series then outstanding by notice to the Trustee
may rescind an acceleration  and its  consequences if (i) all existing Events of
Default,  other than the  non-payment of the principal of the Securities of such
Series which has become due solely by such  declaration  of  acceleration,  have
been cured or waived, (ii) to the extent the payment of such interest is lawful,
interest on overdue  installments  of  interest,  premium,  if any,  and overdue
principal,   which  has  become  due  otherwise  than  by  such  declaration  of
acceleration,  has been paid,  (iii) the rescission  would not conflict with any
judgment or decree of a court of  competent  jurisdiction  and (iv) all payments
due to the Trustee and any  predecessor  Trustee  under  Section  7.07 have been
made. Anything herein contained to the contrary notwithstanding, in the event of
any  acceleration  pursuant  to this  Section  6.02,  the  Company  shall not be
obligated to pay any premium in connection  with any  repayment  arising from an
Event of Default.

Section 6.03. Other Remedies.

     If an Event of Default occurs and is continuing, the Trustee may pursue any
available  remedy by  proceeding  at law or in equity to collect  the payment of
principal of, premium, if any, or interest on the Securities of the Series as to
which the Event of Default shall have occurred or to enforce the  performance of
any provision of such Securities or the Indenture.

     The Trustee may  maintain a  proceeding  even if it does not possess any of
the  Securities  of the  Series  as to which  the Event of  Default  shall  have
occurred or does not produce any of them in the proceeding.  A delay or omission
by the Trustee or any  Securityholder in exercising any right or remedy accruing
upon an Event of Default  shall not impair the right or remedy or  constitute  a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy.  All available  remedies are cumulative to the extent permitted by
law.

Section 6.04. Waiver of Past Defaults.

     Subject to Sections  6.07 and 9.02,  the Holders of a majority in principal
amount  of the  outstanding  Securities  of a Series  by  written  notice to the
Trustee may waive an existing Default or Event of Default and its  consequences,
except a Default in the payment of principal of or premium,  if any, or interest
on any such Security as specified in clauses (1) and (2) of Section 6.01. When a
Default or Event of Default is waived, it is cured and ceases.

Section 6.05. Control by Majority.

     The Holders of a majority in principal amount of the outstanding Securities
of a Series (or, if more than one Series is affected,  of all such Series voting
as a single  class)  may direct the time,  method  and place of  conducting  any
proceeding  for any remedy  available to the Trustee or exercising  any trust or
power conferred on it.  However,  the Trustee may refuse to follow any direction
that conflicts with any law or this Indenture that the Trustee determines may be
unduly prejudicial to the rights of another Securityholder,  or that may involve
the Trustee in personal liability;  provided that the Trustee may take any other
action  deemed  proper  by the  Trustee  which  is not  inconsistent  with  such
direction.

Section 6.06. Limitation on Suits.

     A  Securityholder  may not pursue any remedy with respect to this Indenture
or the Securities of the applicable Series unless:

     (1) the Holder gives to the Trustee written notice of a continuing Event of
Default;

     (2) the  Holders  of at least 25% in  principal  amount of the  outstanding
Securities  of the Series in respect of which the Event of Default has  occurred
make a written request to the Trustee to pursue a remedy;

     (3) such Holder or Holders offer to the Trustee  indemnity  satisfactory to
the Trustee against any loss, liability or expense;

     (4) the  Trustee  does not  comply  with the  request  within 60 days after
receipt of the request and the offer of indemnity; and

     (5) during such 60-day period the Holders of a majority in principal amount
of the outstanding Securities of such Series do not give the Trustee a direction
which, in the opinion of the Trustee, is inconsistent with the request.

     A  Holder  of  Securities  of any  Series  may not use  this  Indenture  to
prejudice  the rights of any other  Holders of  Securities  of that Series or to
obtain a preference  or priority  over any other  Holders of  Securities of that
Series.

Section 6.07. Rights of Holders to Receive Payment.

     Notwithstanding  any other  provision of this  Indenture,  the right of any
Holder to receive  payment of principal of and premium,  if any, and interest on
the Security,  on or after the respective due dates  expressed in such Security,
or to  bring  suit for the  enforcement  of any such  payment  on or after  such
respective dates,  shall not be impaired or affected without the consent of such
Holder.

Section 6.08. Collection Suit by Trustee.

     If an Event of Default in payment of interest  or  principal  specified  in
Section  6.01(1)  or (2) occurs  and is  continuing,  the  Trustee  may  recover
judgment in its own name and as trustee of an express  trust against the Company
or any other  obligor  on the  Securities  of the Series in respect of which the
Event of Default has  occurred for the whole amount of  principal,  premium,  if
any, and accrued interest  remaining  unpaid,  together with interest overdue on
principal  or,  in the case of  Original  Issue  Discount  Securities,  the then
accreted  value,  and to the extent  that  payment of such  interest  is lawful,
interest on overdue installments of interest, in each case at the rate per annum
borne by such Securities or, in the case of Original Issue Discount  Securities,
at a rate equal to the Yield to Maturity  thereof,  and such  further  amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable  compensation,  expenses,  disbursements and advances of the Trustee,
its agents and counsel.

Section 6.09. Trustee May File Proofs of Claim.

     The Trustee may file such proofs of claim and other  papers or documents as
may be  necessary  or  advisable  in  order to have the  claims  of the  Trustee
(including any claim for the reasonable  compensation,  expenses,  disbursements
and  advances of the Trustee,  its agents and  counsel) and the  Securityholders
allowed  in any  judicial  proceedings  relative  to the  Company  (or any other
obligor  upon the  Securities),  its  creditors  or its  property  and  shall be
entitled  and  empowered  to collect and  receive  any monies or other  property
payable or  deliverable  on any such claims and to distribute  the same, and any
Custodian  in any  such  judicial  proceedings  is  hereby  authorized  by  each
Securityholder  to make such  payments to the Trustee and, in the event that the
Trustee  shall  consent  to  the  making  of  such  payments   directly  to  the
Securityholders,  to pay to the Trustee any amount due to it for the  reasonable
compensation,  expenses,  disbursements and advances of the Trustee,  its agents
and counsel,  and any other amounts due the Trustee under Section 7.07.  Nothing
herein  contained  shall be deemed to  authorize  the  Trustee to  authorize  or
consent  to or  accept  or adopt on  behalf  of any  Securityholder  any plan of
reorganization,  arrangement, adjustment or composition affecting the Securities
of any Series or the rights of any Holder  thereof,  or to authorize the Trustee
to vote in respect of the claim of any Securityholder in any such proceeding.

Section 6.10. Priorities.

     If the Trustee  collects  any money or property  pursuant to this Article 6
with respect to Securities  of a Series,  it shall pay out the money or property
in the following order:

     First: to the Trustee for amounts due under Section 7.07;

     Second:  to Holders for amounts  due and unpaid on the  Securities  of such
Series in respect of which monies have been collected for principal, premium, if
any,  and  interest,  ratably,  without  preference  or  priority  of any  kind,
according  to the  amounts  due and payable on such  Securities  for  principal,
premium, if any, and interest, respectively; and

     Third: to the Company.

     The Trustee,  upon prior  written  notice to the Company,  may fix a record
date and  payment  date for any  payment  to  Securityholders  pursuant  to this
Section 6.10.

Section 6.11. Undertaking for Costs.

     In any suit for the enforcement of any right or remedy under this Indenture
or in any suit  against  the  Trustee  for any action  taken or omitted by it as
Trustee,  a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs,  including  reasonable  attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses  made by the party  litigant.  This Section 6.11
does not apply to a suit by the Trustee,  a suit by a Holder pursuant to Section
6.07,  or a suit by any  Holder  or a group  of  Holders  of  more  than  10% in
principal amount of the outstanding  Securities of all Series (or, if the matter
in issue does not relate to all Series of Securities, then the Holders of 10% in
principal amount of the outstanding Securities of all Series to which such issue
relates) (treated as a single class)).

                                    ARTICLE 7

                                     Trustee

Section 7.01. Duties of Trustee.

     (a) The Trustee, except during the continuance of an Event of Default known
to it pursuant to Section 6.01,  undertakes to perform such duties and only such
duties as are specifically  set forth in this Indenture.  If an Event of Default
known to the Trustee  pursuant to Section 6.01 has  occurred and is  continuing,
the Trustee  shall  exercise  such of the rights and powers vested in it by this
Indenture  and use the same  degree  of care and  skill in their  exercise  as a
prudent Person would exercise or use under the  circumstances  in the conduct of
his own affairs.

     (b) Except  during  the  continuance  of an Event of  Default  known to the
Trustee pursuant to Section 6.01:

          (1) the Trustee need perform only those duties as are specifically set
forth in this  Indenture and no others and no implied  covenants or  obligations
shall be read into this Indenture against the Trustee;

          (2)  in the  absence  of  bad  faith  on its  part,  the  Trustee  may
conclusively  rely, as to the truth of the statements and the correctness of the
opinions  expressed  therein,  upon  certificates  or opinions  furnished to the
Trustee and  conforming to the  requirements  of this  Indenture;  however,  the
Trustee shall examine the certificates and opinions to determine  whether or not
they conform to the requirements of this Indenture.

     (c) The Trustee may not be relieved  from  liability  for its own negligent
action, its own negligent failure to act, or its own willful misconduct,  except
that:

          (1) this paragraph does not limit the effect of paragraphs (a) and (b)
of this Section 7.01;

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

          (3) the  Trustee  shall not be liable  with  respect  to any action it
takes or omits to take in good faith in accordance with a direction  received by
it pursuant to Section 6.05.

     (d) No provision of this  Indenture  shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or powers
if it shall have  reasonable  grounds for believing that repayment of such funds
or adequate  indemnity against such risk or liability is not reasonably  assured
to it.

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

     (f) The Trustee  shall not be liable for interest on any money  received by
it except as the Trustee  may agree with the  Company in writing.  Money held in
trust by the  Trustee  need not be  segregated  from other  funds  except to the
extent required by law.

Section 7.02. Rights of Trustee.

     Subject to Section 7.01:

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

     (b) before the Trustee  acts or  refrains  from  acting,  it may require an
Officers'  Certificate or an Opinion of Counsel,  which shall conform to Section
11.05;  the Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such certificate or opinion;

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

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

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

     (f) the Trustee  shall be under no obligation to exercise any of the rights
or powers  vested in it by this  Indenture  at the request or  direction  of the
Holders, including,  without limitation, the duties, rights and powers specified
in Section  6.02  hereof,  unless  such  Holders  have  offered  to the  Trustee
reasonable  security or indemnity  against the costs,  expenses and  liabilities
which  might be  incurred  by the  Trustee in  compliance  with such  request or
action.

     (g) Except with respect to Section 6.01(1) and Section 6.01(2), the Trustee
shall have no duty to inquire as to the  performance of the Company with respect
to the covenants  contained in Article 4. In addition,  the Trustee shall not be
deemed to have  knowledge of an Event of Default except (1) any Event of Default
occurring  pursuant to Section  6.01(1) and Section  6.01(2) or (2) any Event of
Default  of which the  Trustee  shall  have  received  written  notification  or
obtained actual knowledge.

Section 7.03. Individual Rights of Trustee.

     The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities  and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee.  Any Agent may do the
same with like  rights.  However,  the Trustee is subject to  Sections  7.10 and
7.11.

Section 7.04. Trustee's Disclaimer.

     The Trustee makes no  representation as to the validity or adequacy of this
Indenture or the Securities of any Series,  it shall not be accountable  for the
recitals  contained in this  Indenture or for the  Company's use of the proceeds
from the  Securities  of any  Series,  and it shall not be  responsible  for any
statement in the Securities of any Series, or in any prospectus used to sell the
Securities of any Series, other than its certificate of authentication.

Section 7.05. Notice of Defaults.

     If a Default or an Event of Default  occurs and is continuing  with respect
of any Series of Securities, and if it is actually known to the Trustee pursuant
to Section 6.01 hereof,  the Trustee shall mail to each Holder of the Securities
of such Series notice of the Default or Event of Default within 75 days after it
occurs.  Except in the case of a Default  or an Event of  Default  in payment of
principal of, premium,  if any, or interest on any Security or in the payment of
any Sinking Fund  installment,  the Trustee may  withhold  such notice if and so
long as a  committee  of its  Trust  Officers  in  good  faith  determines  that
withholding the notice is in the interest of Securityholders.

Section 7.06. Reports by Trustee to Holders.

     The Trustee  shall  transmit to the Holder such reports  concerning,  among
other things, the Trustee and its action under this Indenture as may be required
pursuant to the TIA at the time and in  compliance  with  Section  313(a) of the
TIA.  The Trustee also shall comply with  Sections  313(b)(2)  and 313(c) of the
TIA.

     A copy of each such  report at the time of its  mailing to  Securityholders
shall  be filed  with the SEC and each  stock  exchange,  if any,  on which  the
Securities of any Series are listed.

     The Company shall notify the Trustee if the Securities of any Series become
listed on any stock exchange.

Section 7.07. Compensation and Indemnity.

     The Company shall pay to the Trustee from time to time such compensation as
shall be agreed upon in writing by the Company and the  Trustee.  The  Trustee's
compensation  shall not be limited by any law on compensation of a trustee of an
express  trust.  The Company  shall  reimburse  the Trustee upon request for all
reasonable  disbursements,  expenses and  advances  incurred or made by it. Such
expenses shall include the reasonable  compensation,  disbursements and expenses
of the Trustee's agents and counsel.

     The Company shall indemnify the Trustee for, and hold it harmless  against,
any loss or liability  incurred by it in connection with the  administration  of
this  trust and its duties  hereunder,  including  the  reasonable  expenses  of
defending itself against any claim of liability arising  hereunder.  The Trustee
shall notify the Company  promptly of any claim asserted against the Trustee for
which it may seek  indemnity.  The Company need not pay for any settlement  made
without its written consent,  which consent shall not be unreasonably  withheld.
The Company  need not  reimburse  any expense or  indemnify  against any loss or
liability incurred by the Trustee through negligence or bad faith.

     To secure the  Company's  payment  obligations  in this Section  7.07,  the
Trustee shall have a lien prior to the Securities of each Series on all money or
property  held or collected by the Trustee,  in its capacity as Trustee,  except
money or  property  held in trust  to pay  principal  of,  premium,  if any,  or
interest on particular Securities.

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

Section 7.08. Replacement of Trustee.

     The Trustee may resign by so notifying the Company in writing.  The Holders
of a majority in principal  amount of the  outstanding  Securities of all Series
(voting as a single class) may remove the Trustee by so notifying the Trustee in
writing and may appoint a successor Trustee with the Company's consent. Pursuant
to a Company Order, the Company may remove the Trustee if:

     (1) the Trustee fails to comply with Section 7.10;

     (2) the Trustee is adjudged a bankrupt or an insolvent;

     (3) a receiver or other public  officer  takes charge of the Trustee or its
property; or

     (4) the Trustee becomes incapable of acting.

     If the Trustee  resigns or is removed or if a vacancy  exists in the office
of Trustee  for any  reason,  the  Company  shall  promptly  appoint a successor
Trustee.  Within one year after the successor Trustee takes office,  the Holders
of a majority in principal  amount of the  Securities of all Series (voting as a
single class) may appoint a successor  Trustee to replace the successor  Trustee
appointed by the Company.

     A successor  Trustee shall deliver a written  acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee  shall  transfer,  after  payment of all sums then owing to the  Trustee
pursuant to Section 7.07, all property and  documentation  held by it as Trustee
to the successor  Trustee,  subject to the lien  provided in Section  7.07,  the
resignation or removal of the retiring Trustee shall become  effective,  and the
successor  Trustee  shall have all the rights,  powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession to
each Securityholder.

     If a  successor  Trustee  does not take  office  within  60 days  after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Securities of all
Series  (voting  as  a  single  class)  may  petition  any  court  of  competent
jurisdiction for the appointment of a successor Trustee.

     If the Trustee fails to comply with Section 7.10,  any  Securityholder  may
petition any court of competent  jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.  Any successor Trustee shall comply with
TIA (S) 310(a)(5).

     Notwithstanding  replacement of the Trustee  pursuant to this Section 7.08,
the Company's  obligations  under Section 7.07 shall continue for the benefit of
the retiring Trustee.

Section 7.09. Successor Trustee by Merger, etc.

     If the Trustee consolidates with, merges or converts into, or transfers all
or  substantially  all of its corporate trust business to, another  corporation,
the resulting, surviving or transferee corporation without any further act shall
be the successor Trustee.

Section 7.10. Eligibility; Disqualification.

     This Indenture  shall always have a Trustee who satisfies the  requirements
of Section  310(a)(1) of the TIA. The Trustee shall have a combined  capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition.  The Trustee  shall comply with Section  310(b) of the TIA,
including the provision  permitted by the second  sentence of Section  310(b) of
the TIA.

Section 7.11. Preferential Collection of Claims Against Company.

     The Trustee shall comply with Section 311(a) of the TIA, excluding from the
operation  of  Section  311(a) of the TIA any  creditor  relationship  listed in
Section  311(b) of the TIA. A Trustee who has resigned or been removed  shall be
subject to Section 311(a) of the TIA to the extent indicated.

                                    ARTICLE 8

           Defeasance, Covenant Defeasance, Satisfaction and Discharge

Section 8.01.  Applicability of Article;  Company's Option to Effect  Defeasance
or Covenant Defeasance.

     If pursuant  to Section  2.02  provision  is made for either or both of (a)
defeasance  of the  Securities  of any Series under Section 8.02 or (b) covenant
defeasance  of the  Securities of any Series under Section 8.03 to apply to such
Securities, then the provisions of such Section or Sections, as the case may be,
together with the other provisions of this Article Eight, shall be applicable to
the Securities and the Company may at its option,  at any time,  with respect to
the  Securities,  elect to have either  Section 8.02 (if  applicable) or Section
8.03 (if  applicable) be applied to the  outstanding  Securities upon compliance
with the conditions set forth below in this Article Eight.

Section 8.02. Defeasance and Discharge.

     Upon the Company's exercise of the above option applicable to this Section,
the  Company and the  Guarantors  shall be deemed to have been  discharged  from
their respective  obligations with respect to the outstanding  Securities on the
date the conditions set forth below are satisfied (hereinafter, "Defeasance").

     For this purpose, such Defeasance means that the Company shall be deemed to
have paid and discharged the entire indebtedness  represented by the outstanding
Securities and the Company and the Guarantors  shall be deemed to have satisfied
all their  respective  obligations  under the  Securities and the Guarantees and
this Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company,  shall  execute  proper  instruments  acknowledging  the
same),  except for the following which shall survive until otherwise  terminated
or discharged hereunder:

     (a) the rights of Holders of outstanding Securities to receive, solely from
the trust fund  described  in  Section  8.04 and as more fully set forth in such
Section,  payments in respect of the principal of, premium, if any, and interest
on such outstanding Securities when such payments are due;

     (b)  the  Company's  obligations  with  respect  to such  Securities  under
Sections 2.07, 2.08, 4.02 and 7.07;

     (c) the rights,  powers, trusts, duties and immunities and other provisions
in respect of the Trustee hereunder; and

     (d) this Article Eight.

     Subject to compliance with this Article Eight, the Company may exercise its
option under this Section 8.02  notwithstanding the prior exercise of its option
under Section 8.03 with respect to the Securities of any Series.

Section 8.03. Covenant Defeasance.

     Upon the Company's exercise of the above option applicable to this Section,
the Company shall be released from its  obligations  under Sections 4.03,  4.06,
4.08,  4.09 and 5.01,  and Sections 4.05 and 6.01(3) (as they relate to Sections
4.03, 4.06,  4.08, 4.09 and 5.01) with respect to the outstanding  Securities of
any Series on and after the date the  conditions  set forth below are  satisfied
(hereinafter, "Covenant Defeasance").

     For this purpose,  such Covenant Defeasance means that, with respect to the
outstanding  Securities  of any Series,  the Company may omit to comply with and
shall have no liability  in respect of any term,  condition  or  limitation  set
forth in any such  Section,  whether  directly  or  indirectly  by reason of any
reference  elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document, but the
remainder of this  Indenture and such  Securities  shall be unaffected  thereby.
Following  a  Covenant  Defeasance,  payment  of  such  Securities  may  not  be
accelerated because of an Event of Default specified above in this Section 8.03.

Section 8.04. Conditions to Defeasance or Covenant Defeasance.

     The following shall be the conditions to application of either Section 8.02
or Section 8.03 to the outstanding Securities of any Series:

     (a) The Company shall  irrevocably have deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose of making the following
payments,  specifically  pledged as security for, and  dedicated  solely to, the
benefit  of the  Holders  of the  Securites  of any  Series  (1) in the  case of
Securities of any Series denominated in U.S. dollars,  (A) an amount of cash, or
(B) direct non-callable  obligations of, or non-callable  obligations guaranteed
by,  the  United  States  of  America  for the  payment  of which  guarantee  or
obligation the full faith and credit of the United States is pledged, including,
but not limited  to,  depository  receipts  issued by a bank as  custodian  with
respect to any such security held by the custodian for the benefit of the holder
of such depository receipt ("U.S.  Government  Obligations"),  which through the
scheduled  payment of principal  and interest in respect  thereof in  accordance
with their terms will provide,  within two weeks of the due date of any payment,
money  in  an  amount,  or  (C)  a  combination  thereof,  sufficient,   without
reinvestment,  in the opinion of a  nationally  recognized  firm of  independent
public  accountants  approved by the trustee in the exercise of reasonable  care
expressed in a written  certification  thereof delivered to the Trustee,  to pay
and  discharge,  and which shall be applied by the Trustee to pay and discharge,
the  principal of,  premium,  if any, and each  installment  of interest on such
Securities on their respective Stated Maturities in accordance with the terms of
this Indenture and of such  Securities,  or (2) in the case of Securities of any
Series  denominated in currency other than U.S.  dollars,  an amount of Required
Currency  sufficient  to pay and  discharge,  and which  shall be applied by the
Trustee to pay and  discharge,  the  prinicpal  of,  premium,  if any,  and each
installment of interest on such Securities on their respective Stated Maturities
in accordance  with the terms of this Indenture and of such  Securities.  Before
such a deposit,  the Company may make  arrangements  satisfactory to the Trustee
for  the  redemption  of any  Securities  of such  Series  at a  future  date in
accordance with any redemption  provisions  relating to such  Securities,  which
shall be given effect in applying the foregoing.

     (b) No Event of Default or event with which notice or lapse of time or both
would  become an Event of Default  with  respect to such  Securities  shall have
occurred and be  continuing  on the date of such  deposit  and,  with respect to
defeasance only, at any time during the period ending on the 123rd day after the
date of such  deposit  (it being  understood  that this  condition  shall not be
deemed satisfied until the expiration of such period).

     (c) Such Defeasance or Covenant  Defeasance shall not cause the Trustee for
the  Securities  to have a  conflicting  interest  for  purposes of the TIA with
respect to any Securities of the Company.

     (d) Such Defeasance or Covenant  Defeasance shall not result in a breach or
violation  of,  or  constitute  a default  under,  this  Indenture  or any other
agreement or instrument to which the Company is a party or by which it is bound.

     (e) Such Defeasance or Covenant  Defeasance  shall not cause any Securities
of such Series then listed on any registered  national securities exchange under
the Securities Exchange Act of 1934, as amended, to be delisted.

     (f) In the case of an election  under Section 8.02,  the Company shall have
delivered to the Trustee an Opinion of Counsel  stating that (x) the Company has
received  from, or there has been published by, the Internal  Revenue  Service a
ruling,  or (y) since the date of this Indenture  there has been a change in the
applicable  federal income tax law, in either case to the effect that, and based
thereon  such  opinion  shall  confirm  that,  the  Holders  of the  outstanding
Securities of such Series will not recognize gain or loss for federal income tax
purposes as a result defeasance and will be subject to federal income tax on the
same  amounts,  in the same  manner and at the same times as would have been the
case if such defeasance had not occurred.

     (g) In the case of an election  under Section 8.03,  the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the Holders of
the  outstanding  Securities of such Series will not recognize  income,  gain or
loss for federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal  income tax on the same  amounts,  in the same manner
and at the same  times as would have been the case if such  covenant  defeasance
had not occurred.

     (h) Such Defeasance or Covenant  Defeasance shall be effected in compliance
with any additional terms, conditions or limitations which may be imposed on the
Company in connection therewith pursuant to Section 2.02.

     (i)  The  Company  shall  have   delivered  to  the  Trustee  an  Officers'
Certificate  or an Opinion of Counsel,  stating  that all  conditions  precedent
provided for in the Indenture  relating to either the  Defeasance  under Section
8.02 or the  Covenant  Defeasance  under  Section 8.03 (as the case may be) have
been complied with.

Section 8.05.       Deposited Money and U.S.  Government  Obligations to be Held
                    in Trust; Other Miscellaneous Provisions.

     All money and U.S. Government  Obligations (including the proceeds thereof)
deposited  with  the  Trustee  pursuant  to  Section  8.04  in  respect  of  the
outstanding  Securities  shall be held in trust and applied by the  Trustee,  in
accordance  with the provisions of such  Securities and this  Indenture,  to the
payment,  either  directly or through any Paying  Agent (but not  including  the
Company  acting as its own Paying  Agent) as the Trustee may  determine,  to the
Holders of such Securities, of all sums due and to become due thereon in respect
of  principal,  premium,  if any,  and  interest  but  such  money  need  not be
segregated, from other funds except to the extent required by law.

     The Company  shall pay and  indemnify  the Trustee  against any tax, fee or
other  charge  imposed on or assessed  against the U.S.  Government  Obligations
deposited  pursuant to Section 8.04 or the  principal  and interest  received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the holders of the Outstanding Securities.

     Anything in this  Article 8 to the  contrary  notwithstanding,  the Trustee
shall  deliver or pay to the Company from time to time upon Company  Request any
money or U.S.  Government  Obligations  held by it as provided  in Section  8.04
which,  in the opinion of a nationally  recognized  firm of  independent  public
accountants approved by the trustee in the exercise of reasonable care expressed
in a written  certification  thereof delivered to the Trustee,  are in excess of
the amount  thereof  which would then be required to be  deposited  to effect an
equivalent Defeasance or Covenant Defeasance.

Section 8.06. Satisfaction and Discharge of Indenture.

     This  Indenture  shall upon Company  Request cease to be of further  effect
with respect to the Securities  specified in such Company  Request (except as to
rights of  registration of transfer or exchange of Securities  herein  expressly
provided for and the  obligation of the Company to pay any  Additional  Amounts,
and the  Trustee  on  receipt  of the  Company  Request,  at the  expense of the
Company,  shall  execute  proper  instruments  acknowledging   satisfaction  and
discharge of this Indenture, when:

     (a) either

     (i) all  Securities  theretofore  authenticated  and delivered  (other than
Securities which have been mutilated,  destroyed,  lost or stolen and which have
been  replaced as provided in Section  2.08 or paid) have been  delivered to the
Trustee for cancellation; or

     (ii) all such  Securities  not  theretofore  delivered  to the  Trustee for
cancellation:

          (A) have become due and payable, or

          (B) will become due and payable at their  Stated  Maturity  within one
     year, or

          (C) if  redeemable  at the option of the  Company are to be called for
     redemption within one year under  arrangements  satisfactory to the Trustee
     for the giving of notice of redemption  by the Trustee in the name,  and at
     the expense,  of the Company,  and the Company,  in the case of (A), (B) or
     (C) above,  has  deposited  or caused to be  deposited  with the Trustee as
     trust  funds in trust  for the  purpose  an  amount  sufficient  to pay and
     discharge  the  entire  indebtedness  on such  Securities  not  theretofore
     delivered to the Trustee for cancellation,  for principal, premium, if any,
     and  interest  to the date of such  deposit  (or in the case of  Securities
     which have become due and payable) or to the Stated  Maturity or Redemption
     Date, as the case may be;

     (b) the  Company  has paid or  caused  to be paid all  other  sums  payable
hereunder by the Company; and

     (c) the Company has delivered to the Trustee an Officers' Certificate or an
Opinion of Counsel,  stating that all conditions  precedent  herein provided for
relating to the  satisfaction  and discharge of this  Indenture  with respect to
such Securities have been complied with.

     Notwithstanding  the  satisfaction  and  discharge of this  Indenture  with
respect to the  Securities,  the obligations of the Company to the Trustee under
Section 7.07, if money shall have been  deposited  with the Trustee  pursuant to
subc1ause  (B) of clause (i) of this  Section,  the  obligations  of the Company
under Sections 2.07, 2.08, 2.11 and 4.02.

Section 8.07. Application of Trust Money.

     All  funds  and U.S.  Government  Obligations  deposited  with the  Trustee
pursuant  to  Article  Eight  shall  be held in  trust  and  applied  by it,  in
accordance with the provisions of the Securities for which such deposit was made
and this Indenture,  to the payment, either directly or through any Paying Agent
(but not  including  the Company  acting as its own Paying Agent) as the Trustee
may determine,  to the Persons entitled thereto,  of the principal,  premium, if
any, and interest for whose payment such money and U.S.  Government  Obligations
has  been  deposited  with  the  Trustee;  but such  money  and U.S.  Government
Obligations  need not be  segregated  from  other  funds  except  to the  extent
required by law.

Section 8.08. Repayment to Company.

     Subject to Section  8.05,  the Trustee and the Paying Agent shall  promptly
pay to the  Company  upon  request  any  excess  money held by them at any time.
Subject to the  provisions of  applicable  law, the Trustee and the Paying Agent
shall pay to the Company  upon request any money held by them for the payment of
principal,  premium,  if any, or interest that remains  unclaimed for two years;
provided,  however,  the Trustee or such Paying Agent  before being  required to
make any payment may at the expense of the Company cause to be published once in
a  newspaper  of  general  circulation  in The  City of New York or mail to each
Holder entitled to such money notice that such money remains unclaimed and that,
after a date specified  therein which shall be at least 30 days from the date of
such publication or mailing,  any unclaimed balance of such money then remaining
will be repaid to the Company.  After payment to the Company,  the Trustee shall
be  released  from  all  further  liability  with  respect  to  such  money  and
Securityholders  entitled  to money  must look to the  Company  for  payment  as
general creditors unless an applicable abandoned property law designates another
Person.

Section 8.09. Reinstatement.

     If the Trustee or Paying Agent is unable to apply any cash, U.S. Government
Obligations  or the Required  Currency,  as the case may be, in accordance  with
this  Article 8 by reason of any legal  proceeding  or by reason of any order or
judgment  of any  court or  governmental  authority  enjoining,  restraining  or
otherwise  prohibiting such  application,  the Company's  obligations under this
Indenture  (with  respect to the  applicable  Series) and the  Securities of the
applicable  Series  shall be revived  and  reinstated  as though no deposit  had
occurred  until such time as the Trustee or Paying  Agent is  permitted to apply
all such cash, U.S.  Government  Obligations and Required Currency,  as the case
may be, in  accordance  with this  Article  8;  provided,  however,  that if the
Company or any of the Guarantors has made any payment of interest or premium, if
any,  on  or  principal  of  any   Securities  of  any  Series  because  of  the
reinstatement of its obligations, the Company or the Guarantors, as the case may
be,  shall be  subrogated  to the rights of the  Holders of such  Securities  to
receive such payment from the cash, U.S. Government  Obligations or the Required
Currency, as the case may be, held by the Trustee or Paying Agent.

                                    ARTICLE 9

                       Amendments, Supplements and Waivers

Section 9.01. Without Consent of Holders.

     The Company and the Guarantors,  when authorized by a Board Resolution, and
the Trustee may amend or  supplement  this  Indenture or the  Securities  of any
Series without notice to or consent of any Securityholder:

     (1) to cure any ambiguity, defect or inconsistency;

     (2) to comply with Article 5;

     (3) to provide for  uncertificated  Securities in addition to  certificated
Securities;

     (4) to secure the Securities in connection with Section 4.08;

     (5) to make any  change  that does not  adversely  affect the rights of any
Securityholder of such Series;

     (6) to provide for the issuance and the terms of any  particular  Series of
Securities and the Guarantees,  the rights and  obligations of the Company,  the
Guarantors and the Holders of the  Securities of such Series,  the form or forms
of the Securities of such Series and such other matters in connection  therewith
as the Board of Directors  of the Company and the  Guarantees  shall  authorize,
including,  without  limitation,  provisions  for (a)  additional  or  different
covenants,  restrictions or conditions applicable to such Series, (b) additional
or  different  Events of  Default in  respect  of such  Series,  (c) a longer or
shorter period of grace and/or notice in respect of any provision  applicable to
such Series than is provided in Section 6.01,  (d) immediate  enforcement of any
Event of Default in respect of such Series or (e) limitations  upon the remedies
available  in respect of any Events of Default in respect of such Series or upon
the rights of the holders of  Securities  of such Series to waive any such Event
of Default; provided, that this paragraph (6) shall not be deemed to require the
execution of a supplemental  indenture to provide for the issuance of any Series
of  Securities  unless  the  same  shall  be  provided  for in  the  Authorizing
Resolutions relating thereto; or

     (7) to provide for a separate Trustee for one or more Series.

Section 9.02. With Consent of Holders.

     Subject to  Section  6.07,  with the  written  consent of the  Holders of a
majority  in  principal  amount  of the  outstanding  Securities  of all  Series
affected  thereby  (voting as a single class),  the Company and the  Guarantors,
when authorized by a Board  Resolution,  and the Trustee may amend or supplement
this Indenture or such Securities without notice to any Securityholder.  Subject
to  Section  6.07,  the  Holders  of a  majority  in  principal  amount  of  the
outstanding Securities of all Series affected thereby (voting as a single class)
may waive  compliance  by the Company and the  Guarantors  with any provision of
this  Indenture  or  such  Securities  without  notice  to  any  Securityholder;
provided,  that,  only the  Holders of a  majority  in  principal  amount of the
outstanding  Securities  of a  particular  Series  may waive  compliance  with a
provision  of  this   Indenture  or  the   Securities   of  such  Series  having
applicability  solely to such  Series.  However,  without  the  consent  of each
Securityholder affected, an amendment,  supplement or waiver, including a waiver
pursuant to Section 6.04, may not:

     (1) reduce the amount of Securities of such Series or all Series (voting as
a single class), as the case may be, whose Holders must consent to an amendment,
supplement or waiver;

     (2) reduce the rate (or  change the manner of  calculation  of the rate) or
change the Stated Maturity for payment of interest on any Security;

     (3) reduce the  principal  of or any premium  payable at Maturity or change
the Stated Maturity for payment of the principal of any Security;

     (4) waive a Default in the payment of the principal of or premium,  if any,
or interest on any Security;

     (5) make any changes in Section  6.04,  6.07 or the third  sentence of this
Section 9.02;

     (6) make any Security  payable in a currency  other than that stated in the
Security;

     (7) impair  the  Holders'  right to  institute  suit to enforce  payment in
respect of the Securities on or after the due date for such payment; or

     (8) release any Guarantor from its obligations under its Guarantee.

A  supplemental  indenture  which  changes or  eliminates  any covenant or other
provision of this  Indenture  which has expressly  been included  solely for the
benefit of one or more  particular  Series of Securities,  or which modifies the
rights of the Holders of Securities of such Series with respect to such covenant
or other provision, shall be deemed not to affect the rights under the Indenture
of the Holders of Securities of any other Series.

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

     After an  amendment,  supplement  or  waiver  under  this  Section  becomes
effective,  the  Company  shall mail to the  Holders  affected  thereby a notice
briefly  describing  the  amendment,  supplement  or waiver.  Any failure of the
Company to mail such notice, or any defect therein,  shall not, however,  in any
way impair or affect the validity of any such supplemental indenture.

Section 9.03. Compliance with Trust Indenture Act.

     Every amendment to or supplement of this Indenture or the Securities  shall
comply with the TIA as then in effect.

Section 9.04. Revocation and Effect of Consents.

     Until an amendment or waiver becomes effective, a consent to it by a Holder
is a  continuing  consent  by the  Holder  and every  subsequent  Holder of such
Security  or  portion  of such  Security  that  evidences  the same  debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security.  However,  any such Holder or subsequent  Holder may revoke in writing
the consent as to his Security or portion of a Security.  Such revocation  shall
be  effective  only if the Trustee  receives  the written  notice of  revocation
before the date the amendment, supplement or waiver becomes effective.

     The Company may,  but shall not be obligated  to, fix a record date for the
purpose of  determining  the  Holders  entitled  to  consent  to any  amendment,
supplement  or  waiver  which  shall  be at least  30 days  prior  to the  first
solicitation of such consent.  If a record date is fixed,  then  notwithstanding
the last two sentences of the immediately preceding paragraph, those Persons who
were Holders at such record date (or their duly  designated  proxies),  and only
those  Persons,  shall be entitled to consent to such  amendment,  supplement or
waiver or to revoke any consent  previously  given,  whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 90 days after such record date.

     After an amendment,  supplement or waiver becomes effective,  it shall bind
every Holder of a Security of such Series, unless it makes a change described in
any of clauses  (1)  through (6) of Section  9.02.  In that case the  amendment,
supplement  or waiver shall bind each Holder of a Security who has  consented to
it and every  subsequent  Holder of a Security  or portion of a Security  of the
same Series that evidences the same debt as the consenting Holder's Security.

Section 9.05. Notation On or Exchange of Securities.

     If an amendment,  supplement  or waiver  changes the terms of a Security or
Guarantee,  the Trustee may require the Holder of the  Security to deliver it to
the Trustee.  The Trustee may place an appropriate  notation on the Security and
Guarantee about the changed terms and return it to the Holder. Alternatively, if
the  Company or the  Trustee so  determines,  the  Company in  exchange  for the
Security  shall issue and the Trustee shall  authenticate  a new Security of the
same Series that reflects the changed terms.

Section 9.06. Trustee to Sign Amendments, etc.

     The Trustee shall be entitled to receive,  and shall be fully  protected in
relying upon, an Officers'  Certificate  and an Opinion of Counsel  stating that
the execution of any amendment, supplement or waiver authorized pursuant to this
Article 9 is  authorized  or permitted by this  Indenture.  The Trustee may, but
shall not be obligated  to,  execute any such  amendment,  supplement  or waiver
which  affects  the  Trustee's  own  rights,  duties or  immunities  under  this
Indenture or otherwise.

                                   ARTICLE 10

                             Guarantee of Securities

Section 10.01. Unconditional Guarantee.

     For  good  and   valuable   consideration   receipt   of  which  is  hereby
acknowledged,  and intending to be legally bound hereby,  the Guarantors  hereby
unconditionally and jointly and severally guarantee to each Holder of a Security
of any series,  authenticated  and  delivered  by the  Trustee,  upon which this
guarantee (the  "Guarantee")  is endorsed,  the due and punctual  payment of the
principal of, sinking fund payment,  if any,  premium,  if any, and interest on,
and any  Redemption  Price with respect to such  Security,  when and as the same
shall become due and payable,  whether at Stated Maturity,  upon acceleration or
redemption  or otherwise,  in accordance  with the terms of such Security and of
this Indenture.

     The Guarantors  agree to determine,  at least one Business Day prior to the
date upon  which a payment  of  principal  of,  sinking  fund  payment,  if any,
premium,  if any, and interest on said Security,  and any Redemption  Price with
respect to such Security, is due and payable,  whether the Company has available
the funds to make such payment as the same shall become due and payable. In case
of the failure of the Company to punctually  pay any such  principal of, sinking
fund payment, if any, premium, if any, and interest on, and any Redemption Price
with respect to, such  Security,  the Guarantor  hereby agrees to cause any such
payment to be made punctually when and as the same shall become due and payable,
whether at Stated Maturity, upon acceleration or redemption,  or otherwise,  and
as if such payment were made by the Company.

     The Guarantors  hereby agree that their  obligations  hereunder shall be as
principal and not merely as surety, and shall be unconditional, irrevocable, and
absolute,   irrespective  of,  and  shall  be  unaffected  by,  any  invalidity,
irregularity,  or  unenforceability  of such  Security  or such  Indenture,  any
failure to enforce the  provisions  of such Security or such  Indenture,  or any
waiver, modification,  consent or indulgence granted to the Company with respect
thereto  (unless  the same shall also be  provided  to the  Guarantors),  by the
Holder of such Security or the Trustee with respect to any  provisions  thereof,
the  recovery of any  judgment  against the Company or any action to enforce the
same,  or any other  circumstance  which might  otherwise  constitute a legal or
equitable  discharge  or defense of a surety or of a guarantor.  The  Guarantors
hereby waive diligence,  presentment, demand of payment, filing of claims with a
court in the event of merger, insolvency or bankruptcy of the Company, any right
to require a  proceeding  first  against  the  Company,  protest or notice  with
respect to any such  Security or the  indebtedness  evidenced  thereby,  and all
demands  whatsoever and covenants that no Guarantee will be discharged except by
payment in full of the  principal,  premium,  if any,  and  interest on, and any
Redemption Price with respect to, the Securities and the complete performance of
the obligations contained in such Security, the Guarantee and this Indenture.

     The  Guarantors  shall be  subrogated  to all  rights of the  Holder of any
Security  against the  Company in respect of all amounts  paid to such Holder by
the Guarantors pursuant to the provisions of the Guarantee;  provided,  however,
that the Guarantors  shall not, without the consent of the Holders of all of the
Securities then  outstanding,  be entitled to enforce or to receive any payments
arising out of or based upon such right of  subrogation  until the principal of,
premium,  if any, and interest on, and any Redemption  Price with respect to all
Securities  shall  have been paid in full or  payment  thereof  shall  have been
provided  for and all other  obligations  contained in the  Securities  and this
Indenture  shall  have  been  performed.  If any  amount  shall  be  paid to any
Guarantor  in  violation of the  preceding  sentence and all amounts  payable in
respect of the Securities shall not have been paid in full, such amount shall be
deemed to have been paid to such Guarantor for the benefit of, and held in trust
for the benefit of, the Holders,  and shall forthwith be paid to the Trustee for
the benefit of the Holders to be credited  and applied upon such  amounts.  Each
Guarantor  acknowledges  that it will receive direct and indirect  benefits from
the issuance of the Securities pursuant to this Indenture.

     Notwithstanding anything to the contrary contained herein, if following any
payment of principal, premium, if any, sinking fund payment, Redemption Price or
interest by the Company on the Securities to the Holders of the Securities it is
determined by a final  decision of a court of competent  jurisdiction  that such
payment   shall  be  avoided  by  a  trustee  in   bankruptcy   (including   any
debtor-in-possession)  as a  preference  under 11  U.S.C.  Section  547 and such
payment is returned by such Holder to such  trustee in  bankruptcy,  then and to
the extent of such repayment,  the obligations of the Guarantors hereunder shall
remain in full force and effect.

     Notwithstanding  anything to the contrary contained herein,  each Guarantee
shall be, and hereby is, limited to the maximum amount that can be guaranteed by
the applicable Guarantor without rendering such Guarantee, as it relates to such
Guarantor,  voidable under any applicable law relating to fraudulent conveyance,
fraudulent transfer or similar laws affecting the rights of creditors generally.

     The  Guarantee set forth in this Article is intended for the benefit of the
Trustee and each of the Holders of Securities  and shall be  enforceable by such
Trustee and such Holders.

     The  Guarantee  set forth in this Article  shall be governed by the laws of
the State of Indiana.

Section 10.02.  Disposition of a Guarantor.

     Anything herein to the contrary notwithstanding,  if the Company transfers,
or causes the transfer of, all or substantially  all of the voting capital stock
or assets of any Guarantor to any Person other than the Company, or a Subsidiary
of the Company (including a Guarantor) whether by merger, consolidation, sale or
other  transfer  (the  "Transfer"),  all  obligations  and  liabilities  of such
Guarantor  under this Indenture  shall  terminate upon the  consummation of such
Transfer and the Guarantor  shall have no further  liability or obligation  with
respect hereto provided that:

     (1) the  Guarantor  shall have  fully  repaid to the  Company  prior to, or
simultaneously  with, the  consummation of the Transfer all of the  Indebtedness
owing to the  Company  (including  principal,  sinking  fund  payments,  if any,
interest accrued to the date of consummation of the Transfer,  premium,  if any,
thereon  and  any  other   amounts  due  and  payable   with   respect  to  such
Indebtedness);

     (2)  Standard & Poor's  Ratings  Service has  confirmed  that the long term
credit rating of the Company will not fall below BBB- (or the  equivalent)  as a
result of the Transfer and Moody's  Investors  Service,  Inc. has  confirmed the
long  term  credit  rating  of the  Company  will  not fall  below  Baa3 (or its
equivalent) as a result of the Transfer; and

     (3)  immediately  before  and  immediately  after  giving  effect  to  such
transaction  no Event of Default and no Default with  respect to the  Securities
shall have occurred and be continuing.

Section 10.03. Execution of Guarantee

     To evidence their Guarantee to the Holders  specified in Section 10.01, the
Guarantors hereby agree to execute the Guarantee in substantially the form above
recited,  to be endorsed on each  Security  authenticated  and  delivered by the
Trustee.  Each such Guarantee shall be executed on behalf of the Guarantors in a
manner identical to that prescribed in Section 2.03 of the Indenture relating to
the execution,  authentication,  delivery and dating of such Securities prior to
the authentication of the Security on which it is endorsed,  and the delivery of
such Security by the Trustee, after the authentication thereof hereunder,  shall
constitute due delivery of such Guarantee on behalf of the Guarantors.

     The  Guarantee  set  forth in this  Article  shall  not be valid or  become
obligatory for any purpose with respect to a Security  until the  certificate of
authentication on such Security shall have been signed by the Trustee.

     The  Issuer  mmay  elect in its sole  discretion  to cause  any  subsequent
Subsidiary  of the  Issuer to fully and  unconditionally  guarantee  the due and
punctual  payment of the principal of, premium,  if any, and interest on and any
other amounts  payable under the  Securities,  when and if the same shall become
due and payable, whether at the Stated Maturity, by declaration of acceleration,
upon redemption,  or otherwise, by execution of an indenture supplemental hereto
that  adds  such  Subsidiary  as a  subsequent  Guarantor  (each  a  "Subsequent
Guarantor").

     Anything  herein  to  the  contrary  notwithstanding,  by  execution  of  a
supplemental indenture by any Subsequent Guarantor and subject to Section 10.02,
the Guarantee of each Guarantor in respect of such Securities shall be set forth
in Section 10.01 and shall be effective for all purposes upon  authentication of
such  Security  by or on behalf  of the  Trustee,  regardless  of  whether  such
authentication  occurs  prior  to a  Subsequent  Guarantor's  execution  of  the
required supplemental indenture.

                                   ARTICLE 11

                                  Miscellaneous

Section 11.01. Trust Indenture Act Controls.

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

Section 11.02. Notices.

     Any notice or communication  shall be sufficiently  given if in writing and
delivered in Person or mailed by first-class mail addressed as follows:

         if to the Company:

                           Vectren Utility Holdings, Inc.
                           20 N.W. Fourth Street
                           Evansville, IN 47708
                           Attention:

         if to the Guarantors:

                           Indiana Gas Company, Inc.
                           20 N.W. Fourth Street
                           Evansville, IN 47708
                           Attention:

                           Southern Indiana Gas and Electric Company
                           20 N.W. Fourth Street
                           Evansville, IN 47708 Attention:

                           Vectren Energy Delivery of Ohio, Inc.
                           20 N.W. Fourth Street
                           Evansville, IN 47708
                           Attention:

         if to the Trustee:

                           U.S. Bank Trust National Association
                           180 East Fifth Street, Suite 200
                           St. Paul, Minnesota  55101
                           Attention:  Richard Prokosch

     The Company,  any of the  Guarantors or the Trustee by notice to the others
may  designate  additional  or different  addresses  for  subsequent  notices or
communications.

     Any notice or communication  mailed to a Securityholder  shall be mailed to
him at his  address  as it  appears  on  the  Security  Register  and  shall  be
sufficiently given to him if so mailed within the time prescribed.

     Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its  sufficiency  with respect to other  Securityholders.
Except for a notice to the Trustee, which is deemed given only when received, if
a notice or  communication  is mailed in the manner  provided  above, it is duly
given, whether or not the addressee receives it.

Section 11.03. Communications by Holders With Other Holders.

     Securityholders  may  communicate  pursuant  to TIA (S)  312(b)  with other
Securityholders  with  respect  to their  rights  under  this  Indenture  or the
Securities of an applicable  Series. The Company,  the Guarantors,  the Trustee,
the Registrar and any other Person shall have the  protection of Section  312(c)
of the TIA.

Section 11.04. Certificate and Opinion as to Conditions Precedent.

     Upon any request or  application  by the Company or the  Guarantors  to the
Trustee to take any action under this  Indenture,  the Company  shall furnish to
the Trustee:

     (1) an Officers'  Certificate  stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and

     (2) an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.

Section 11.05. Statements Required in Certificate or Opinion.

     Each  certificate or opinion with respect to compliance with a condition or
covenant  provided for in this Indenture,  other than the Officers'  Certificate
required by Section 4.05, shall include:

     (1) a statement that the Person making such certificate or opinion has read
such covenant or condition;

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

     (3) a  statement  that,  in the  opinion of such  Person,  he has made such
examination  or  investigation  as is  necessary  to enable  him to  express  an
informed  opinion as to  whether  or not such  covenant  or  condition  has been
complied with; and

     (4) a statement as to whether or not, in the opinion of such  Person,  such
condition or covenant  has been  complied  with;  provided,  however,  that with
respect  to matters  of fact an  Opinion  of  Counsel  may rely on an  Officers'
Certificate or certificates of public officials.

Section 11.06. Rules by Trustee, Paying Agent, Registrar.

     The  Trustee  may make  reasonable  rules for  action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for its
functions.

Section 11.07. Legal Holidays.

     A  "Legal  Holiday"  is a  Saturday,  a Sunday  or a day on  which  banking
institutions  in New York,  New York are not  required to be open.  If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next  succeeding day that is not a Legal  Holiday,  and no interest shall
accrue for the intervening  period. The foregoing may be modified and amended in
or pursuant  to the  Authorizing  Resolutions  and/or a  supplemental  indenture
relating to the execution of the Securities of any Series.

Section 11.08. Governing Law.

     THE LAWS OF THE  STATE OF  INDIANA  SHALL  GOVERN  THIS  INDENTURE  AND THE
SECURITIES WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 Section 11.09. No Adverse Interpretation of Other Agreements.

     This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company, the Guarantors or any of their Subsidiaries.  Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 11.10. No Recourse Against Others.

     A director,  officer,  employee or stockholder,  as such, of the Company or
any of the  Guarantors  shall not have any liability for any  obligations of the
Company or any of the  Guarantors  under the  Securities or the Indenture or for
any claim  based on, in  respect  of or by reason of such  obligations  or their
creation.  Each  Securityholder  by accepting a Security waives and releases all
such liability.

Section 11.11. Successors.

     All  agreements of the Company and the Guarantors in this Indenture and the
Securities  shall bind its  successor.  All  agreements  of the  Trustee in this
Indenture shall bind its successor.

Section 11.12. Duplicate Originals.

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

Section 11.13. Separability.

     In case any  provision  in this  Indenture  or in the  Securities  shall be
invalid, illegal or unenforceable,  the validity, legality and enforceability of
the remaining  provisions shall not in any way be affected or impaired  thereby,
and a Holder shall have no claim therefor against any party hereto.

Section 11.14. Action  of  Holders  when   Securities  are  Denominated  in
               Different Currencies.

     Whenever any action is to be taken  hereunder by the Holders of two or more
Series of Securities denominated in different currencies, then, for the purposes
of  determining  the principal  amount of Securities  held by such Holders,  the
aggregate  principal  amount of the  Securities  denominated in a currency other
than United  States  dollars  shall be deemed to be that amount of United States
dollars  that could be obtained  for such  principal  amount on the basis of the
spot rate of exchange for such  currency as  determined  by the Company or by an
authorized  exchange  rate agent and  evidenced  to the Trustee by an  Officers'
Certificate  as of the date the  taking  of such  action by the  Holders  of the
requisite  percentage in principal  amount of the Securities is evidenced to the
Trustee.  An exchange  rate agent may be  authorized  in advance or from time to
time  by the  Company,  and  may be the  Trustee  or  its  Affiliate.  Any  such
determination  by the  Company  or by any  such  exchange  rate  agent  shall be
conclusive  and binding on all Holders and the Trustee,  and neither the Company
nor such  exchange  rate agent  shall be liable  therefor  in the absence of bad
faith.

Section 11.15. Monies of Different Currencies to be Segregated.

     The Trustee shall segregate monies, funds, and accounts held by the Trustee
hereunder  in one  currency  from any  monies,  funds or  accounts  in any other
currencies,  notwithstanding  any provision  herein which would otherwise permit
the Trustee to commingle such amounts.

Section 11.16. Payment to be in Proper Currency.

     Each reference in any Security,  or in the Authorizing  Resolutions  and/or
supplemental  indenture,  if any, relating thereto,  to any currency shall be of
the  essence.  In the case of any  Security  denominated  in any  currency  (the
"Required  Currency")  other than United  States  dollars,  except as  otherwise
provided therein or in the related  Authorizing  Resolutions and/or supplemental
indenture,  if any,  the  obligation  of the  Company  to make  any  payment  of
principal of,  premium,  if any, or interest  thereon shall not be discharged or
satisfied  by any tender by the  Company,  or  recovery by the  Trustee,  in any
currency other than the Required Currency, except to the extent that such tender
or recovery  shall result in the Trustee  timely  holding the full amount of the
Required Currency.  The costs and risks of any such exchange,  including without
limitations, the risks of delay and exchange rate fluctuation, shall be borne by
the  Company;  the  Company  shall  remain  fully  liable for any  shortfall  or
delinquency in the full amount of Required Currency then due and payable, and in
no circumstances shall the Trustee be liable therefor. The Company hereby waives
any defense of payment  based upon any such  tender or recovery  which is not in
the Required Currency, or which, when exchanged for the Required Currency by the
Trustee, is less than the full amount of Required Currency then due and payable.

<PAGE>

                                   SIGNATURES

     In Witness  Whereof,  the parties  hereto have caused this  Indenture to be
duly executed,  and their respective  corporate seals to be hereunto affixed and
attested, all as of the date first written above.

                                     Vectren Utility Holdings, Inc., as Issuer

                                     By:
                                        ----------------------------------------

Attest:_________________________

                                     Indiana Gas Company, Inc., as Guarantor

                                     By:
                                        ----------------------------------------

Attest:_________________________

                                     Southern Indiana Gas And Electric
                                          Company,  as Guarantor

                                     By:
                                        ----------------------------------------

Attest:_________________________

                                     Vectren Energy Delivery of Ohio, Inc.,
                                         as Guarantor

                                     By:
                                        ----------------------------------------

Attest:_________________________

                                     U.S. Bank Trust National Association,
                                          as Trustee

                                     By:
                                        ----------------------------------------

Attest:_________________________<Page>

                                                                     EXHIBIT 4.0

                                RIGHTS AGREEMENT

                                 BY AND BETWEEN

                          COLLATERAL THERAPEUTICS, INC.

                                       AND

                     AMERICAN STOCK TRANSFER & TRUST COMPANY

                                 AS RIGHTS AGENT

                                   DATED AS OF

                               SEPTEMBER 19, 2001

<Page>

                                TABLE OF CONTENTS
<Table>
<Caption>
                                                                                                               PAGE
                                                                                                               ----
<S>               <C>                                                                                          <C>
Section 1.        CERTAIN DEFINITIONS.............................................................................1

Section 2.        APPOINTMENT OF RIGHTS AGENT.....................................................................5

Section 3.        ISSUE OF RIGHTS CERTIFICATES....................................................................6

Section 4.        FORM OF RIGHTS CERTIFICATES.....................................................................7

Section 5.        COUNTERSIGNATURE AND REGISTRATION...............................................................7

Section 6.        TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES; MUTILATED,
                  DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES...................................................8

Section 7.        EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS...................................8

Section 8.        CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES............................................10

Section 9.        RESERVATION AND AVAILABILITY OF PREFERRED STOCK................................................11

Section 10.       PREFERRED STOCK RECORD DATE....................................................................12

Section 11.       ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS.............................12

Section 12.       CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.....................................20

Section 13.       CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER...........................20

Section 14.       FRACTIONAL RIGHTS AND FRACTIONAL SHARES........................................................23

Section 15.       RIGHTS OF ACTION...............................................................................24

Section 16.       AGREEMENT OF RIGHTS HOLDERS....................................................................24

Section 17.       RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.............................................25

Section 18.       CONCERNING THE RIGHTS AGENT....................................................................25

Section 19.       MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT......................................26

Section 20.       DUTIES OF RIGHTS AGENT.........................................................................28

Section 21.       CHANGE OF RIGHTS AGENT.........................................................................28

Section 22.       ISSUANCE OF NEW RIGHTS CERTIFICATES............................................................29

Section 23.       REDEMPTION AND TERMINATION.....................................................................30

                                       i.

<Page>

Section 24.       EXCHANGE.......................................................................................31

Section 25.       NOTICE OF CERTAIN EVENTS.......................................................................32

Section 26.       NOTICES........................................................................................33

Section 27.       SUPPLEMENTS AND AMENDMENTS.....................................................................34

Section 28.       SUCCESSORS.....................................................................................34

Section 29.       DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS...........................................34

Section 30.       BENEFITS OF THIS AGREEMENT.....................................................................35

Section 31.       SEVERABILITY...................................................................................35

Section 32.       GOVERNING LAW..................................................................................35

Section 33.       COUNTERPARTS...................................................................................35

Section 34.       DESCRIPTIVE HEADINGS...........................................................................35
</Table>

EXHIBITS

Exhibit A         Form of Certificate of Designation of Series A Junior
                  Participating Preferred Stock

Exhibit B         Form of Rights Certificate

Exhibit C         Summary of Rights to Purchase Shares of Series A Preferred
                  Stock

                                      ii.

<Page>

                                RIGHTS AGREEMENT

                  RIGHTS AGREEMENT, dated as of September 19, 2001 (the
"AGREEMENT"), by and between Collateral Therapeutics, Inc., a Delaware
corporation (the "COMPANY"), and American Stock Transfer & Trust Company, (the
"RIGHTS AGENT").

                  WHEREAS, effective September 19, 2001 (the "RIGHTS DIVIDEND
DECLARATION DATE"), the board of directors of the Company authorized and
declared a distribution of one Right (each, a "RIGHT") for each share of Common
Stock (as hereinafter defined) of the Company outstanding as of the Close of
Business (as hereinafter defined) on October 1, 2001 (the "RECORD DATE"), each
Right initially representing the right to purchase one one-thousandth of a share
(a "UNIT") of Preferred Stock (as hereinafter defined) upon the terms and
subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each share of Common Stock of
the Company that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined).

                  NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements herein set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:

                  Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:

                  "ACQUIRING PERSON" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 20% or more of the shares of
Common Stock of the Company then outstanding, but shall not include (1) the
Company, any Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary of the Company, or
any entity holding shares of Common Stock of the Company for or pursuant to the
terms of any such plan Notwithstanding the foregoing:

                  (i)      no Person shall become an "Acquiring Person" as the
         result of an acquisition of shares of Common Stock by the Company
         which, by reducing the number of shares outstanding, increases the
         proportionate number of shares beneficially owned by such Person to 20%
         or more of the shares of Common Stock of the Company then outstanding;
         PROVIDED, HOWEVER, that if a Person shall become the Beneficial Owner
         of 20% or more of the shares of Common Stock of the Company then
         outstanding as a result of any such acquisition of shares of Common
         Stock by the Company and shall, after such acquisition of shares by the
         Company, become the Beneficial Owner of any additional shares of Common
         Stock of the Company (other than as a result of a stock dividend, stock
         split or similar transaction effected by the Company in which all
         holders of Common Stock of the Company are treated equally) (or, in the
         case of the members of the Investor Group, become the Beneficial Owner
         of any additional shares of Common Stock of the Company), then such
         Person shall be deemed to be an "Acquiring Person" hereunder;

                                       1.
<Page>

                  (ii)     no Person who, alone or together with all Affiliates
         and Associates of such Person, was, at the time of the public
         announcement by the Company of the declaration by its Board of
         Directors on September 19, 2001 of the dividend distribution of the
         Rights, the Beneficial Owner of 20% or more of the Common Stock of the
         Company then outstanding shall be deemed to have become an Acquiring
         Person unless and until such time as (A) such Person or any Affiliate
         or Associate of such Person thereafter becomes the Beneficial Owner of
         any additional Common Stock of the Company (other than as a result of a
         stock dividend, stock split or similar transaction effected by the
         Company in which all holders of Common Stock of the Company are treated
         equally); and

                  (iii)    if the board of directors of the Company determines
         in good faith that a Person who would otherwise be an "Acquiring
         Person" as defined pursuant to the provisions of subparagraph (i), has
         become such inadvertently, and such Person divests as promptly as
         practicable a sufficient number of shares of Common Stock of the
         Company so that such Person would no longer be an "Acquiring Person,
         then such Person shall not be deemed to be an "Acquiring Person" for
         any purpose of this Agreement.

                  "ADJUSTMENT SHARES" shall have the meaning set forth in
Section 11(a)(ii).

                  "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the Exchange Act Regulations (as
hereinafter defined) as in effect on the date of this Agreement.

                  A Person shall be deemed the "BENEFICIAL OWNER" of, and shall
be deemed to "beneficially own," any securities:

                  (A)      which such Person or any of such Person's Affiliates
         or Associates beneficially owns, directly or indirectly, for purposes
         of Section 13(d) of the Exchange Act (as hereinafter defined) and Rule
         13d-3 thereunder (or any comparable or successor law or regulation); or

                  (B)      which such Person or any of such Person's Affiliates
         or Associates, directly or indirectly, has (A) the right to acquire
         (whether such right is exercisable immediately, contingently or only
         after the passage of time) pursuant to any agreement, arrangement or
         understanding (whether or not in writing, other than customary
         agreements with and between underwriters and selling group members with
         respect to a bona fide public offering of securities), or upon the
         exercise of conversion rights, exchange rights, rights (other than the
         Rights), warrants or options, or otherwise; PROVIDED, HOWEVER, that a
         Person shall not be deemed the Beneficial Owner of, or to beneficially
         own, securities tendered pursuant to a tender or exchange offer made by
         or on behalf of such Person or any of such Person's Affiliates or
         Associates until such tendered securities are accepted for purchase or
         exchange; or (B) the right to vote pursuant to any agreement,
         arrangement or understanding; PROVIDED FURTHER, HOWEVER, that a Person
         shall not be deemed the "Beneficial Owner" of, or to "beneficially
         own," any security under this subparagraph (ii) as a result of an
         agreement, arrangement or understanding to vote such security if such
         agreement, arrangement or understanding: (x) arises solely from a
         revocable proxy given in

                                       2.
<Page>

         response to a public proxy or consent solicitation made pursuant to,
         and in accordance with, the applicable provisions of the Exchange Act
         and the Exchange Act Regulations, and (y) is not reportable by such
         Person on Schedule 13D under the Exchange Act (or any comparable or
         successor report); or

                  (C)      which are beneficially owned, directly or indirectly,
         by any other Person (or any Affiliate or Associate thereof) with which
         such Person (or any of such Person's Affiliates or Associates) has any
         agreement, arrangement or understanding (whether or not in writing,
         other than customary agreements with and between underwriters and
         selling group members with respect to a bona fide public offering of
         securities), for the purpose of acquiring, holding, voting (except to
         the extent contemplated by the proviso to clause (B) of subparagraph
         (ii) above) or disposing of any securities of the Company; PROVIDED,
         HOWEVER, that in no case shall an officer or director of the Company be
         deemed (A) the Beneficial Owner of any securities beneficially owned by
         another officer or director of the Company solely by reason of actions
         undertaken by such persons in their capacity as officers or directors
         of the Company or (B) the Beneficial Owner of securities held of record
         by the trustee of any employee benefit plan of the Company or any
         Subsidiary of the Company for the benefit of any employee of the
         Company or any Subsidiary of the Company, other than such officer or
         director, by reason of any influence that such officer or director may
         have over the voting of the securities held in the plan;

Notwithstanding anything in this definition of "Beneficial Owner" and
"beneficially own" to the contrary, the phrase "then outstanding," when used
with reference to a Person who is the Beneficial Owner of securities of the
Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to beneficially own hereunder.

                  "BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.

                  "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M.,
New York City time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding
Business Day.

                  "COMMON STOCK" when used with reference to the Company shall
mean the shares of common stock, par value $.001, of the Company. "Common Stock"
when used with reference to any Person other than the Company shall mean the
capital stock (or other equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned Person.

                  "COMPANY" shall have the meaning set forth in the forepart of
this Agreement.

                  "CURRENT PER SHARE MARKET PRICE" shall have the meaning set
forth in Section 11(d)(i).

                                       3.
<Page>

                  "CURRENT VALUE" shall have the meaning set forth in Section
11(a)(iii).

                  "DISTRIBUTION DATE" shall have the meaning set forth in
Section 3(a).

                  "EQUIVALENT PREFERRED SHARES" shall have the meaning set forth
in Section 11(b).

                  "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, or any successor statute.

                  "EXCHANGE ACT REGULATIONS" shall mean the Rules and
Regulations under the Exchange Act, as amended from time to time (including any
successor rules).

                  "EXCHANGE RATIO" shall have the meaning set forth in Section
24.

                  "EXPIRATION DATE" shall have the meaning set forth in Section
7(a).

                  "FINAL EXPIRATION DATE" shall have the meaning set forth in
Section 7(a).

                  "NASDAQ" shall have the meaning set forth in Section 11(d).

                  "PERSON" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.

                  "PREFERRED STOCK" shall mean shares of Series A Preferred
Stock, par value $.001, of the Company having the rights and preferences set
forth in the Form of Certificate of Designation attached to this Agreement as
Exhibit A.

                  "PREFERRED STOCK EQUIVALENTS" shall have the meaning set forth
in Section 11(a)(iii).

                  "PRINCIPAL PARTY" shall have the meaning set forth in Section
13.

                  "PURCHASE PRICE" shall have the meaning set forth in Section
7(b).

                  "RECORD DATE" shall have the meaning set forth in the recitals
to this Agreement.

                  "REDEMPTION DATE" shall have the meaning set forth in Section
7(a).

                  "REDEMPTION PRICE" shall have the meaning set forth in Section
23(a).

                  "RIGHT" shall have the meaning set forth in the recitals to
this Agreement.

                  "RIGHTS AGENT" shall have the meaning set forth in the
forepart of this Agreement and shall include any Person that shall become a
successor Rights Agent pursuant to the terms of this Agreement.

                  "RIGHTS CERTIFICATE" shall have the meaning set forth in
Section 3(a).

                                       4.
<Page>

                  "RIGHTS DIVIDEND DECLARATION DATE" shall have the meaning set
forth in the recitals to this Agreement.

                  "SECTION 11(A)(II) EVENT" shall mean any event described in
Section 11(a)(ii)(A), (B) or (C).

                  "SECTION 11(A)(II) TRIGGER DATE" shall have the meaning set
forth in Section 11(a)(iii).

                  "SECTION 13 EVENT" shall mean any event described in clause
(x), (y) or (z) of Section 13(a).

                  "SECTION 24(A) EXCHANGE RATIO" shall have the meaning set
forth in Section 24(a).

                  "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any successor statute.

                  "SHARE ACQUISITION DATE" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.

                  "SPREAD" shall have the meaning set forth in Section
11(a)(iii).

                  "SUBSIDIARY" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.

                  "SUMMARY OF RIGHTS" shall have the meaning set forth in
Section 3(b).

                  "TRADING DAY" shall have the meaning set forth in Section
11(d)(i).

                  "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.

                  "UNIT" shall have the meaning set forth in the recitals to
this Agreement.

                  Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions of this Agreement, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint co-Rights Agents as it
may deem necessary or desirable upon ten days prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights agent.

                                       5.
<Page>

                  Section 3. ISSUE OF RIGHTS CERTIFICATES.

         (a)      Until the earlier of (i) the Close of Business on the tenth
(10th) day after the Share Acquisition Date and (ii) the Close of Business on
the tenth Business Day (or such later date as may be determined by action of the
Company's board of directors prior to such time as any Person becomes an
Acquiring Person and of which the Company will give the Rights Agent prompt
written notice) after the date that a tender or exchange offer by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any entity holding
shares of Common Stock for or pursuant to the terms of any such plan) is
commenced within the meaning of Rule 14d-4(a) of the Exchange Act Regulations,
if upon consummation thereof such Person would be the Beneficial Owner of 20% or
more of the shares of Common Stock of the Company then outstanding (the earlier
of (i) and (ii) above being the "DISTRIBUTION DATE"), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b)) by the certificates for
shares of Common Stock of the Company registered in the names of the holders
thereof (which certificates shall also be deemed to be Rights Certificates) and
not by separate Rights Certificates, and (y) the right to receive Rights
Certificates will be transferable only in connection with the transfer of shares
of Common Stock of the Company. As soon as practicable after the Distribution
Date, the Company will notify the Rights Agent of the occurrence of the
Distribution Date and the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured, postage-prepaid mail,
to each record holder of shares of Common Stock of the Company as of the Close
of Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Rights Certificate, in substantially the form of
EXHIBIT B (a "RIGHTS CERTIFICATE"), evidencing one Right for each share of
Common Stock so held. From and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.

         (b)      On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form of EXHIBIT C (the "SUMMARY OF RIGHTS"), by first-class,
postage-prepaid mail, to each record holder of shares of Common Stock of the
Company as of the Close of Business on the Record Date, at the address of such
holder shown on the records of the Company. Until the Distribution Date (or the
Expiration Date), the surrender for transfer of any certificate for shares of
Common Stock of the Company outstanding on the Record Date shall also constitute
the transfer of the Rights associated with the shares of Common Stock
represented thereby.

         (c)      Rights will be issued by the Company in respect of all Common
Shares (other than Common Shares issued upon the exercise or exchange of any
Right) issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates for such
shares of Common Stock shall have impressed on, printed on, written on or
otherwise affixed to them the following legend (or such other legend as the
Company may deem appropriate that is not inconsistent with the provisions of
this Agreement):

                  This certificate also evidences and entitles the holder hereof
                  to certain rights as set forth in a Rights Agreement between
                  Collateral Therapeutics, Inc. and American Stock Transfer &
                  Trust Company

                                       6.
<Page>

                  dated as of September 19, 2001 (the "Rights Agreement"), the
                  terms of which are hereby incorporated herein by reference and
                  a copy of which is on file at the principal executive offices
                  of Collateral Therapeutics, Inc. Under certain circumstances,
                  as set forth in the Rights Agreement, such Rights will be
                  evidenced by separate certificates and will no longer be
                  evidenced by this certificate. Collateral Therapeutics, Inc.
                  will mail to the holder of this certificate a copy of the
                  Rights Agreement without charge after receipt of a written
                  request therefor. Under certain circumstances, as set forth in
                  the Rights Agreement, Rights issued to any Person who becomes
                  an Acquiring Person (as defined in the Rights Agreement),
                  whether currently held by or on behalf of such person or by
                  any subsequent holder, may become null and void.

If the Company purchases or acquires any shares of Common Stock of the Company
after the Record Date but prior to the Distribution Date, any Rights associated
with such shares of Common Stock of the Company shall be deemed cancelled and
retired so that the Company shall not be entitled to exercise any Rights
associated with any shares of Common Stock of the Company which are no longer
outstanding.

                           Section 4. FORM OF RIGHTS CERTIFICATES. The Rights
Certificates (and the forms of election to purchase Units of Preferred Stock and
of assignment to be printed on the reverse thereof) shall be substantially the
same as Exhibit B and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or transaction reporting system on which the Rights may from time to
time be listed or traded, or to conform to usage. Subject to the provisions of
Sections 11 and 22, the Rights Certificates shall entitle the holders thereof to
purchase the number of Units of Preferred Stock as shall be set forth therein at
the price per Unit of Preferred Stock set forth therein, but the number of such
Units of Preferred Stock and the Purchase Price shall be subject to adjustment
as provided herein.

                  Section 5. COUNTERSIGNATURE AND REGISTRATION.

         (a)      The Rights Certificates shall be executed on behalf of the
Company by any officer of the Company, either manually or by facsimile
signature, shall have affixed thereto the Company's seal or a facsimile thereof,
and shall be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates shall be
countersigned by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Rights Certificates had not ceased to be such officer
of the Company. Any Rights Certificate may be signed on behalf of the Company by
any Person who, at the actual date of the execution of such Rights Certificate,
shall be a proper

                                       7.
<Page>

officer of the Company to sign such Rights Certificate, although at the date of
this Agreement any such Person was not such an officer.

         (b)      Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purpose, books for
registration and transfer of the Rights Certificates issued under this
Agreement. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.

                  Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF
RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.

         (a)      Subject to the provisions of Sections 4(b), 7(e) and 14, at
any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the Expiration Date, any Rights Certificate or
Rights Certificates may be transferred, split up, combined or exchanged for
another Rights Certificate or Rights Certificates evidencing exercisable Rights,
entitling the registered holder to purchase a like number of Units of Preferred
Stock (or, following a Triggering Event, other securities, cash or other assets,
as the case may be) as the Rights Certificate or Rights Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 4(b), 7(e) and 14,
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.

        (b)      Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and of indemnity or security reasonably satisfactory to
them, and, at the Company's request, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated, the
Company will make and deliver a new Rights Certificate of like tenor to the
Rights Agent for delivery to the registered holder in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.

                  Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.

         (a)      The registered holder of any Rights Certificate evidencing
exercisable Rights may exercise the Rights evidenced thereby (except as
otherwise provided in this Agreement) in whole

                                       8.
<Page>

or in part at any time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the related certification
duly executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the Purchase Price for each Rights
being exercised (as such amount may be reduced (including to zero) pursuant to
Section 11(a)(iii)) and an amount equal to any applicable transfer tax required
to be paid by the holder of such Rights Certificate in accordance with Section 9
in cash, or by certified check, wire transfer or bank draft payable to the order
of the Company), at or prior to the earliest of (i) the Close of Business on the
tenth (10th) anniversary hereof (the "FINAL EXPIRATION DATE"), (ii) the time at
which the Rights are redeemed as provided in Section 23 (the "REDEMPTION DATE"),
and (iii) the time at which such Rights are exchanged as provided in Section 24
(the earliest of (i), (ii) and (iii) being the "EXPIRATION DATE").

         (b)      The Purchase Price for each Unit of Preferred Stock pursuant
to the exercise of a Right shall initially be $85.00, shall be subject to
adjustment from time to time as provided in Sections 11 and 13, and shall be
payable in lawful money of the United States of America in accordance with
paragraph (c) below.

         (c)      Upon receipt of a Rights Certificate evidencing exercisable
Rights (with the form of election to purchase duly executed) accompanied by
payment as provided in Section 7(a), the Rights Agent shall, subject to Section
20(k), thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Stock a certificate or certificates for the number of Units of
Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests or (B) if the Company shall
have elected to deposit the total number of Units of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent, requisition from
the depositary agent of a depositary receipt or depositary receipts representing
such number of Units of Preferred Stock as are to be purchased (in which case
certificates for the Units of Preferred Stock represented by such receipt or
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company hereby directs the depositary agent to comply with such request;
(ii) when appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 14;
(iii) after receipt of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder; and (iv) when appropriate, after receipt thereof, deliver such cash to
or upon the order of the registered holder of such Rights Certificate. If the
Company is obligated to issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a), the Company will make all
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate.

         (d)      If the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing a number of Rights equivalent to the number of Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of such
Rights Certificate or to such registered holder's duly authorized assigns,
subject to Section 14.

         (e)      Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person

                                       9.
<Page>

or an Associate or Affiliate of an Acquiring Person; (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such; (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the board of directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e); or (iv) any
subsequent transferee shall become null and void without any further action and
no holder of such Rights shall have any rights whatsoever with respect to such
Rights or any Rights Certificate which formerly evidenced such Rights, and
neither the Company nor the Rights Agent shall have any obligations whatsoever
with respect to such Rights or any Rights Certificate, whether under any
provision of this Agreement or otherwise. Without limiting the generality or
effect of the immediately preceding sentence, following the occurrence of a
Triggering Event, no Right Certificate will be issued pursuant to Section 3 or
Section 6 evidencing Rights that shall have become void pursuant to the
provisions of this Section 7(e), and any Rights Certificate surrendered to the
Company or the Rights Agent that formerly evidenced Rights that shall have
become void pursuant to the foregoing provisions of this Section 7(e) will be
canceled without any consideration being payable in respect thereof.
Notwithstanding anything to the contrary contained in this Agreement, neither
the Company nor the Rights Agent shall have any liability to any holder of
Rights Certificates or to any other Person as a result of its making or failing
to make any determinations with respect to an Acquiring Person or any of such
Acquiring Person's Affiliates, Associates or transferees or taking or failing to
take any actions with respect any Rights or Rights Certificates of any such
Person.

         (f)      Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.

                  Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS
CERTIFICATES. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or to any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.

                                      10.
<Page>

                  Section 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK.

         (a)      The Company covenants and agrees that it will use its best
efforts to cause to be reserved and kept available out of and to the extent of
its authorized and unissued Preferred Stock not reserved for another purpose
that will be sufficient to permit the exercise in full of all outstanding
Rights. Upon the occurrence of any events resulting in an increase in the
aggregate number of shares of Preferred Stock (or other equity securities of the
Company) issuable upon exercise of all outstanding Rights above the number then
reserved, the Company shall make appropriate increases in the number of shares
so reserved.

         (b)      If the Units of Preferred Stock to be issued and delivered
upon the exercise of the Rights are at any time listed on a national securities
exchange or included for quotation on any transaction reporting system, the
Company shall during the period from the Distribution Date to the Expiration
Date use its best efforts to cause all shares reserved for such issuance to be
listed on such exchange or included for quotation on any such transaction
reporting system upon official notice of issuance upon such exercise.

         (c)      The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section
11(a)(iii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Securities Act, with respect
to the securities purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the Expiration Date. The Company
will also take such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states in connection with
the exercisability of the Rights. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction, unless the requisite qualification of the offering made upon
exercise of the Rights in such jurisdiction shall have been obtained, or an
exemption therefrom shall be available and until a registration statement has
been declared effective.

         (d)      The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Units of Preferred Stock (and,
following the occurrence of a Triggering Event, any other securities that may be
delivered upon exercise of Rights) shall, at the time of delivery of the
certificates for such Units of Preferred Stock (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
non-assessable.

         (e)      The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Rights Certificates
or of any Units of Preferred Stock upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of certificates or depositary receipts for
Units of Preferred Stock in a name other than that of, the registered holder of
the Rights Certificate evidencing Rights

                                      11.
<Page>

surrendered for exercise or to issue or to deliver any certificates or
depositary receipts for Units of Preferred Stock upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax is due.

                  Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose
name any certificate for Units of Preferred Stock (or, following the occurrence
of a Triggering Event, other securities) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Units of Preferred Stock (or, following the occurrence of a Triggering Event,
other securities) represented thereby on, and such certificate shall be dated,
at the Close of Business on the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; PROVIDED, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or,
following the occurrence of a Triggering Event, other securities) transfer books
of the Company are closed, such Person shall be deemed to have become the record
holder of such shares at the Close of Business on, and such certificate shall be
dated, the next succeeding Business Day on which such transfer books are open;
PROVIDED FURTHER, however, that if delivery of Units of Preferred Stock (or such
other securities) is delayed pursuant to Section 9(c), such Persons shall be
deemed to have become the record holders of such Units of Preferred Stock (or
such other securities) only when such Units first become deliverable. Prior to
the exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a stockholder of the Company with respect
to securities for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as expressly provided in this
Agreement.

                  Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kinds of securities covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.

         (a)      (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding shares of Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller number of
shares Preferred Stock, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section 11(a),
the Purchase Price in effect at the time of the Record Date for such dividend or
of the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of capital stock for which the Rights shall be
exercisable, shall be proportionately adjusted so that the holder of any Rights
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
capital stock which, if such Rights had been exercised immediately prior to such
date and at a time when the applicable transfer books were open, such holder
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; PROVIDED, HOWEVER,

                                      12.
<Page>

that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock
issuable upon exercise of one Right. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition, and shall
be made prior, to any adjustment required pursuant to Section 11(a)(ii).

         (ii)     Subject to Section 24, if:

                  (A)      any Person shall become an Acquiring Person, unless
         the event causing the Person to become an Acquiring Person is a
         transaction to which the provisions of Section 13(a) apply;

                  (B)      any Acquiring Person or any Associate or Affiliate of
         any Acquiring Person, at any time after the date of this Agreement,
         directly or indirectly, shall (1) merge into the Company or otherwise
         combine with the Company and the Company shall be the continuing or
         surviving corporation of such merger or combination and shares of
         Common Stock of the Company shall remain outstanding and unchanged, (2)
         in one transaction or a series of transactions, transfer any assets to
         the Company or any of its Subsidiaries in exchange (in whole or in
         part) for shares of Common Stock of the Company, for other equity
         securities of the Company or any of its Subsidiaries, or for securities
         exercisable for or convertible into shares of equity securities of the
         Company or any of its Subsidiaries (whether shares of Common Stock of
         the Company or otherwise) or otherwise obtain from the Company or any
         of its Subsidiaries, with or without consideration, any additional
         shares of such equity securities or securities exercisable for or
         convertible into such equity securities (other than pursuant to a pro
         rata distribution to all holders of shares of Common Stock of the
         Company), (3) sell, purchase, lease, exchange, mortgage, pledge,
         transfer or otherwise acquire or dispose of, in one transaction or a
         series of transactions, to, from or with the Company or any of its
         Subsidiaries or any employee benefit plan maintained by the Company or
         any of its Subsidiaries or any trustee or fiduciary with respect to
         such plan acting in such capacity, assets (including securities) on
         terms and conditions less favorable to the Company or such Subsidiary
         or plan than those that could have been obtained in arm's-length
         negotiations with an unaffiliated third party, other than pursuant to a
         transaction set forth in Section 13(a), (4) sell, purchase, lease,
         exchange, mortgage, pledge, transfer or otherwise acquire or dispose
         of, in one transaction or a series of transactions, to, from or with
         the Company or any of its Subsidiaries or any employee benefit plan
         maintained by the Company or any of its Subsidiaries or any trustee or
         fiduciary with respect to such plan acting in such capacity (other than
         transactions, if any, consistent with those engaged in, as of the date
         hereof, by the Company and such Acquiring Person or such Associate or
         Affiliate), assets (including securities or intangible assets) having
         an aggregate fair market value of more than $5,000,000, other than
         pursuant to a transaction set forth in Section 13(a), (5) receive, or
         any designee, agent or representative of such Acquiring Person or any
         Affiliate or Associate of such Acquiring Person shall receive, any
         compensation from the Company or any of its Subsidiaries other than
         compensation for full-time employment as a regular employee at rates in
         accordance with the

                                      13.
<Page>

         Company's (or its Subsidiaries') past practices, or (6) receive the
         benefit, directly or indirectly (except proportionately as a holder of
         shares of Common Stock of the Company or as required by law or
         governmental regulation), of any loans, advances, guarantees, pledges
         or other financial assistance or any tax credits or other tax
         advantages provided by the Company or any of its Subsidiaries or any
         employee benefit plan maintained by the Company or any of its
         Subsidiaries or any trustee or fiduciary with respect to such plan
         acting in such capacity; or

                  (C)      during such time as there is an Acquiring Person,
         there shall be any reclassification of securities (including any
         reverse stock split), or recapitalization of the Company, or any merger
         or consolidation of the Company with any of its Subsidiaries or any
         other transaction or series of transactions involving the Company or
         any of its Subsidiaries, other than a transaction or transactions to
         which the provisions of Section 13(a) apply (whether or not with or
         into or otherwise involving an Acquiring Person), which has the effect,
         directly or indirectly, of increasing by more than one percent the
         proportionate share of the outstanding shares of any class of equity
         securities of the Company or any of its Subsidiaries that is directly
         or indirectly beneficially owned by any Acquiring Person or any Person
         or any Associate or Affiliate of any Acquiring Person;

                  then promptly following the occurrence of an event described
         in Section 11(a)(ii)(A), (B) or (C) (a "SECTION 11(A)(II) EVENT"),
         proper provision shall be made so that each holder of a Right, except
         as otherwise provided in Section 7(e), shall thereafter have the right
         to receive for each Right, upon exercise thereof in accordance with the
         terms of this Agreement and payment of the then-current Purchase Price,
         in lieu of the number of Units of Preferred Stock for which a Right was
         exercisable immediately prior to the first occurrence of a Section
         11(a)(ii) Event, such number of Units of Preferred Stock as shall equal
         the result obtained by multiplying the then-current Purchase Price by
         the then number of Units of Preferred Stock for which a Right was
         exercisable (or would have been exercisable if the Distribution Date
         had occurred) immediately prior to the first occurrence of a Triggering
         Event, and dividing that product by 50% of the Current Per Share Market
         Price for shares of Common Stock on the date of occurrence of the
         Triggering Event (such number of Units of Preferred Stock being
         hereinafter referred to as the "ADJUSTMENT SHARES"). Upon the
         occurrence of a Section 13 Event, any Rights that shall not have been
         previously exercised pursuant to this Section 11(a)(ii) shall
         thereafter be exercisable only pursuant to Section 13 and not pursuant
         to this Section 11(a)(ii).

                  (iii)    In the event that the number of shares of Preferred
         Stock which are authorized by the Company's certificate of
         incorporation but not outstanding or reserved for issuance for purposes
         other than upon exercise of the Rights are not sufficient to permit the
         exercise in full of the Rights, or if any necessary regulatory approval
         for such issuance has not been obtained by the Company, the Company
         shall, in lieu of issuing Units of Preferred Stock in accordance with
         Section 11(a)(ii) hereof: (A) determine the excess of (1) the value of
         the Units of Preferred Stock issuable upon the exercise of a Right (the
         "CURRENT VALUE") over (2) the Purchase Price (such excess being
         referred to as the "SPREAD") and (B) with respect to each Right, make
         adequate provision to

                                      14.
<Page>

         substitute for such Units of Preferred Stock, upon exercise of the
         Rights, (1) cash, (2) a reduction in the Purchase Price, (3) other
         equity securities of the Company (including, without limitation, Common
         Stock of the Company or shares or units of shares of any series of
         preferred stock which the board of directors of the Company shall have
         conclusively deemed to have the same value as the Units of Preferred
         Stock (such shares or units of preferred stock are herein called
         "PREFERRED STOCK EQUIVALENTS")), except to the extent that the Company
         has not obtained any necessary regulatory approval for such issuance,
         (4) debt securities of the Company, except to the extent that the
         Company has not obtained any necessary regulatory approval for such
         issuance, (5) other assets, or (6) any combination of the foregoing,
         having an aggregate value equal to the Current Value, as determined by
         the board of directors of the Company based upon the advice of a
         nationally recognized investment banking firm selected by the board of
         directors of the Company (which determination shall be described in a
         statement filed with the Rights Agent and shall be conclusive and
         binding on the Rights Agent, the holders of the Rights and all other
         Persons); PROVIDED, HOWEVER, if the Company shall not have made
         adequate provision to deliver value pursuant to clause (B) above within
         thirty calendar days following the later of (x) occurrence of a Section
         11(a)(ii) Event, and (y) the date on which the Company's right of
         redemption pursuant to Section 23(a) expires (the later of (x) and (y)
         being referred to herein as the "SECTION 11(A)(III) TRIGGER DATE"),
         then the Company shall be obligated to deliver, upon the surrender for
         exercise of a Right and without requiring payment of the Purchase
         Price, Units of Preferred Stock (to the extent available), except to
         the extent that the Company has not obtained any necessary regulatory
         approval for such issuance, and then, if necessary, cash, having an
         aggregate value equal to the Spread.

         (b)      If the Company shall fix a Record Date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within forty five calendar days after such Record Date)
to subscribe for or purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the Preferred Stock (the "EQUIVALENT PREFERRED
STOCK")) or securities convertible into Preferred Stock or Equivalent Preferred
Stock at a price per Unit of Preferred Stock or Equivalent Preferred Share (or
having a conversion price per Unit, if a security convertible into Units of
Preferred Stock or Equivalent Preferred Stock) less than the then Current Per
Share Market Price (as determined pursuant to Section 11(d)) of a Unit of
Preferred Stock on such Record Date, the Purchase Price to be in effect after
such Record Date shall be determined by multiplying the Purchase Price in effect
immediately prior to such Record Date by a fraction, the numerator of which
shall be the sum of the number of Units of Preferred Stock outstanding on such
Record Date plus the number of Units of Preferred Stock which the aggregate
offering price of the total number of Units of Preferred Stock and/or Equivalent
Preferred Stock so to be offered (and/or the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at such Current
Per Share Market Price and the denominator of which shall be the sum of the
number of Units of Preferred Stock outstanding on such Record Date PLUS the
number of additional Units of Preferred Stock and/or Equivalent Preferred Stock
to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). If such subscription
price may be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as determined in good
faith by the board of directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be

                                      15.
<Page>

conclusive and binding on the Rights Agent and the holders of the Rights. Units
of Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a Record Date is fixed; and if such
rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such Record
Date had not been fixed.

         (c)      If the Company shall fix a Record Date for a distribution to
all holders of Units of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend), assets (other than a dividend payable in Units
of Preferred Stock but including any dividend payable in equity securities other
than Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(d)), the Purchase Price to be in effect after such
Record Date shall be determined by multiplying the Purchase Price in effect
immediately prior to such Record Date by a fraction, the numerator of which
shall be the then Current Per Share Market Price (as determined pursuant to
Section 11(d)) of the Preferred Stock on such Record Date, less the fair market
value (as determined in good faith by the board of directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive and binding on the Rights Agent and the holders of
the Rights) of the cash, assets or evidences of indebtedness to be distributed
or of such subscription rights or warrants distributable in respect of a share
of Preferred Stock, and the denominator of which shall be such Current Per Share
Market Price of a share of Preferred Stock. Such adjustments shall be made
successively whenever such a Record Date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such Record Date had not
been fixed.

                  (d)      (i) For the purpose of any computation hereunder, the
         "CURRENT PER SHARE MARKET PRICE" of any security on any date shall be
         deemed to be the average of the daily closing prices per share of such
         security for the thirty (30) consecutive Trading Days (as defined
         below) ending on and including the Trading Day immediately prior to
         such date; PROVIDED, HOWEVER, that in the event that the Current Per
         Share Market Price of the security is determined during a period
         following the announcement by the issuer of such security of (A) a
         dividend or distribution on such security payable in shares of such
         security or securities convertible into such shares, or (B) any
         subdivision, combination or reclassification of such security and prior
         to the expiration of thirty Trading Days after and not including the
         ex-dividend date for such dividend or distribution, or the Record Date
         for such subdivision, combination or reclassification, then, and in
         each such case, the Current Per Share Market Price shall be
         appropriately adjusted to reflect the current market price per share
         equivalent of such security. The closing price for each day shall be
         the last sale price, regular way, or, in case no such sale takes place
         on such day, the average of the closing bid and asked prices, regular
         way, in either case as reported in the principal consolidated
         transaction reporting system with respect to securities listed or
         admitted to trading on the Nasdaq Stock Market ("NASDAQ") or, if the
         security is not listed or admitted to trading on the NASDAQ, as
         reported in the principal consolidated transaction reporting system
         with respect to securities listed on the principal national securities
         exchange on which the security is listed or admitted to trading or, if
         the security

                                      16.
<Page>

         is not listed or admitted to trading on any national securities
         exchange, the last quoted price or, if not so quoted, the average of
         the high bid and low asked prices in the over-the-counter market, as
         reported by the NASDAQ or such other system then in use, or, if on any
         such date the security is not quoted by any such organization, the
         average of the closing bid and asked prices as furnished by a
         professional market maker making a market in the security selected by
         the board of directors of the Company. If on any such date no market
         maker is making a market in the security, the Current Per Share Market
         Price of such security on such date shall mean the fair value per share
         or other trading unit as determined in good faith by the board of
         directors of the Company as provided for above shall be used (which
         determination shall be described in a statement filed with the Rights
         Agent and shall be conclusive and binding on the Rights Agent, the
         holders of the Rights and all other Persons). The term "TRADING DAY"
         shall mean a day on which the principal national securities exchange on
         which the security is listed or admitted to trading is open for the
         transaction of business or, if the security is not listed or admitted
         to trading on any national securities exchange, a Business Day.

                  (ii)     For the purpose of any computation hereunder, the
         Current Per Share Market Price of the Preferred Stock shall be
         determined in accordance with the method set forth in Section 11(d)(i).
         If the Current Per Share Market Price of the Preferred Stock cannot be
         determined in the manner provided above or if the Preferred Stock is
         not publicly held or listed or traded in a manner described in Section
         11(d)(i), the Current Per Share Market Price of the Preferred Stock
         shall be conclusively deemed to be an amount equal to the product of
         $1,000 (as such amount may be appropriately adjusted for such events as
         stock splits, stock dividends and recapitalizations with respect to
         shares of Common Stock of the Company occurring after the date of this
         Agreement) multiplied by the Current Per Share Market Price of Common
         Stock of the Company. If no shares of the Common Stock of the Company
         or the Preferred Stock are publicly held or so listed or traded,
         "CURRENT PER SHARE MARKET PRICE" of the Preferred Stock shall mean the
         fair value per share as determined in good faith by the board of
         directors of the Company, whose determination shall be described in a
         statement filed with the Rights Agent and shall be conclusive and
         binding on the Rights Agent and the holders of the Rights. For all
         purposes of this Agreement, the Current Per Share Market Price of a
         Unit of Preferred Stock shall be equal to the Current Per Share Market
         Price of one share of Preferred Stock divided by 1000.

         (e)      No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least one percent in
the Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one-millionth of
a share of Preferred Stock or one one-hundredth of any other share or security
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which requires such
adjustment or (ii) the Expiration Date.

         (f)      If as a result of an adjustment made pursuant to Section
11(a)(ii), the holder of any Rights thereafter exercised shall become entitled
to receive any shares of capital stock of the

                                      17.
<Page>

Company other than Units of Preferred Stock, thereafter the number of such other
shares so receivable upon exercise of any Rights and the Purchase Price thereof
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Preferred
Stock contained in Sections 11(a), (b), (c), (d), (e), (g), (h), (i), (j), (k),
(l) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Preferred Stock shall apply on like terms to any such other shares.

         (g)      All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price shall evidence the right to purchase, at
the adjusted Purchase Price, the number of Units of Preferred Stock purchasable
from time to time upon exercise of the Rights, all subject to further adjustment
as provided in this Agreement.

         (h)      Unless the Company shall have exercised its election under
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Units of Preferred
Stock (calculated to the nearest one-millionth of a share of Preferred Stock)
obtained by dividing (i) the product obtained by multiplying (x) the number of
Units of Preferred Stock covered by a Right immediately prior to this adjustment
by (y) the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price, by (ii) the Purchase Price in effect immediately after such
adjustment of the Purchase Price.

         (i)      The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Units of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of Units of Preferred Stock
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the Record Date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This Record
Date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be at least
ten days later than the date of the public announcement. If Rights Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such Record Date
Rights Certificates evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates to be so
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record of
Rights Certificates on the Record Date specified in the public announcement.

                                      18.
<Page>

         (j)      Irrespective of any adjustment or change in the Purchase Price
or the number of Units of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per Unit and the number of Units of Preferred
Stock which were expressed in the initial Rights Certificates issued hereunder.

         (k)      Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the number of Units of
Preferred Stock issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
number of Units of Preferred Stock at such adjusted Purchase Price.

         (l)      In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a Record Date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Rights exercised after such Record Date
of that number of Units of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the Units of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such additional shares (fractional or otherwise) upon the occurrence
of the event requiring such adjustment.

         (m)      Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any Unit of Preferred Stock at less than the Current
Per Share Market Price, (iii) issuance wholly for cash of Preferred Stock or
securities which by their terms are convertible into or exchangeable for
Preferred Stock, (iv) dividends on Preferred Stock payable in Preferred Stock,
or (v) issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of Units of its Preferred Stock shall
not be taxable to such stockholders.

         (n)      The Company shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)), (ii) merge with or
into any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o)), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o)), if (x)
at the time of or immediately after such consolidation, merger or sale there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
Person which constitutes, or would constitute, the Principal Party (as defined
in Section 13(b))

                                      19.
<Page>

shall have distributed or otherwise transferred to its stockholders or other
Persons holding an equity interest in such Person, Rights previously owned by
such Person or any of its Affiliates and Associates; PROVIDED, HOWEVER, this
Section 11(n) shall not affect the ability of any Subsidiary of the Company to
consolidate with, merge with or into, or sell or transfer assets or earning
power to, any other Subsidiary of the Company.

         (o)      After the Distribution Date, the Company shall not, except as
permitted by Section 23 or Section 26, take (or permit any of its Subsidiaries
to take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.

         (p)      If, at any time after the date of this Agreement and prior to
the Distribution Date, the Company shall (i) declare or pay any dividend on
outstanding shares of Common Stock of the Company payable in shares of Common
Stock of the Company or (ii) effect a subdivision, combination or consolidation
of the Common Stock of the Company (by reclassification or otherwise than by
payment of dividends in shares of Common Stock of the Company) into a greater or
lesser number of shares of Common Stock of the Company, then in any such case
the number of Units of Preferred Stock purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the number of Units of
Preferred Stock so purchasable immediately prior to such event by a fraction,
the numerator of which shall be the number of shares of Common Stock of the
Company outstanding immediately before such event and the denominator of which
shall be the number of shares of Common Stock of the Company outstanding
immediately after such event. The adjustments provided for in this Section 11(p)
shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected.

                  Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Sections 11 and 13, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the shares of Common Stock of
the Company or Units of Preferred Stock a copy of such certificate and (c) mail
a brief summary thereof to each holder of a Rights Certificate in accordance
with Section 25 hereof. Notwithstanding the foregoing sentence, the failure by
the Company to make such certification or give such notice shall not affect the
validity of or the force or effect of the requirement for such adjustment. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment contained therein and shall not be deemed to have knowledge of
such adjustment unless and until it shall have received such certificate.

                  Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.

         (a)      Except as provided in Section 13(b), in the event that,
following a Shares Acquisition Date, directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
and the Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the

                                      20.
<Page>

Company in a transaction which complies with Section 11(o)) shall consolidate
with the Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the shares of
Common Stock of the Company shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other property, or (z) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer) to any Person or Persons (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
in one or more transactions, directly or indirectly, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole), (any such event being a "SECTION 13 EVENT"),
then, and in each such case, proper provision shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e), shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price,
such number of validly authorized and issued, fully paid and non-assessable
shares of Common Stock of the Principal Party, which shares shall not be subject
to any liens, encumbrances, rights of first refusal, transfer restrictions or
other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of Units of Preferred
Stock for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of such Units
of Preferred Stock for which a Right would be exercisable hereunder but for the
occurrence of such Section 11(a)(ii) Event by the Purchase Price which would be
in effect hereunder but for such first occurrence) and (2) dividing that product
(which, following the direct occurrence of a Section 13 Event, shall be the
"PURCHASE PRICE" for all purposes of this Agreement) by 50% of the Current Per
Share Market Price of the shares of Common Stock of such Principal Party on the
date of consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "COMPANY" shall, for all purposes of this Agreement, thereafter be
deemed to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the consummation of any
such transaction as may be necessary to ensure that the provisions of this
Agreement shall thereafter be applicable to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) shall be of no further effect following the first
occurrence of any Section 13 Event.

         (b)      "PRINCIPAL PARTY" shall mean:

                  (i)      in the case of any transaction described in clause
         (x) or (y) of the first sentence of Section 13(a), (A) the Person that
         is the issuer of any securities into which shares of Common Stock of
         the Company are converted in such merger or consolidation, or, if there
         is more than one such issuer, the issuer whose outstanding shares of
         Common Stock have the greatest aggregate Current Per Share Market Price
         and (B) if no securities are so issued, the Person that is the other
         party to such merger or consolidation, or, if there is more than one
         such Person, the Person whose outstanding shares of Common Stock have
         the greatest aggregate Current Per Share Market Price; and

                                      21.
<Page>

                  (ii)     in the case of any transaction described in clause
         (z) of the first sentence of Section 13(a), the Person that is the
         party receiving the largest portion of the assets or earning power
         transferred pursuant to such transaction or transactions, or, if each
         Person that is a party to such transaction or transactions receives the
         same portion of the assets or earning power transferred pursuant to
         such transaction or transactions or if the Person receiving the largest
         portion of the assets or earning power cannot be determined, whichever
         Person whose outstanding shares of Common Stock have the greatest
         aggregate Current Per Share Market Price; PROVIDED, HOWEVER, that in
         any such case, (1) if the Common Stock of such Person is not at such
         time and has not been continuously over the preceding twelve-month
         period registered under Section 12 of the Exchange Act (the "REGISTERED
         COMMON STOCK"), or such Person is not a corporation, and such Person is
         a direct or indirect Subsidiary of another Person that has Registered
         Common Stock outstanding, "Principal Party" shall refer to such other
         Person; (2) if the Common Stock of such Person is not Registered Common
         Stock or such Person is not a corporation, and such Person is a direct
         or indirect Subsidiary of another Person but is not a direct or
         indirect Subsidiary of another Person which has Registered Common Stock
         outstanding, "Principal Party" shall refer to the ultimate parent
         entity of such first-mentioned Person; (3) if the Common Stock of such
         Person is not Registered Common Stock or such Person is not a
         corporation, and such Person is directly or indirectly controlled by
         more than one Person, and one or more of such other Persons has
         Registered Common Stock outstanding, "Principal Party" shall refer to
         whichever of such other Persons is the issuer of the Registered Common
         Stock having the highest aggregate Current Per Share Market Price; and
         (4) if the Common Stock of such Person is not Registered Common Stock
         or such Person is not a corporation, and such Person is directly or
         indirectly controlled by more than one Person, and none of such other
         Persons has Registered Common Stock outstanding, "Principal Party"
         shall refer to whichever ultimate parent entity is the corporation
         having the greatest stockholders' equity or, if no such ultimate parent
         entity is a corporation, shall refer to whichever ultimate parent
         entity is the entity having the greatest net assets.

         (c)      The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13, and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that the Principal Party will:

                  (i)      (A) file on an appropriate form, as soon as
         practicable following the execution of such agreement, a registration
         statement under the Securities Act with respect to the shares of Common
         Stock of such Principal Party that may be acquired upon exercise of the
         Rights, (B) cause such registration statement to remain effective (and
         to include a prospectus complying with the requirements of the
         Securities Act) until the Expiration Date, and (C) as soon as
         practicable following the execution of such agreement take such action
         as may be required to ensure that any acquisition of such shares of
         Common Stock of such Principal Party upon the exercise of the Rights
         complies with any applicable state securities or "blue sky" laws; and

                                      22.
<Page>

                  (ii)     deliver to holders of the Rights historical financial
         statements for the Principal Party and each of its Affiliates which
         comply in all respects with the requirements for registration on Form
         10 (or any successor form) under the Exchange Act.

         (d)      In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation, bylaws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the Current Per
Share Market Price or securities exercisable for, or convertible into, shares of
Common Stock of such Principal Party at less than the Current Per Share Market
Price (other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection with
the issuance of the shares of Common Stock of such Principal Party pursuant to
the provisions of this Section 13, then, in such event, the Company shall not
consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.

         (e)      The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, except for Rights that have become null and void
pursuant to Section 11(a)(ii), Rights that shall not have been previously
exercised will cease to be exercisable in the manner provided in Section
11(a)(ii) and will thereafter be exercisable in the manner provided in section
13(a).

                  Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

         (a)      The Company shall not be required to issue fractions of Rights
or to distribute Rights Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the Current Per
Share Market Price of a whole Right. For the purposes of this Section 14(a), the
Current Per Share Market Price of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the NASDAQ
or, if the Rights are not listed or admitted to trading on the NASDAQ, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by

                                      23.
<Page>

the NASDAQ or such other system then in use or, if on any such date the Rights
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Rights selected by the board of directors of the Company. If on any such date no
such market maker is making a market in the Rights, the fair value of the Rights
on such date as determined in good faith by the board of directors of the
Company shall be conclusively used.

         (b)      The Company shall not be required to issue fractions of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock). Fractions of Preferred Stock in integral multiples of one
one-thousandth of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; PROVIDED,
HOWEVER, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as Beneficial Owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-thousandth of a share of Preferred Stock, the
Company shall pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the Current Per Share Market Price of one share of Preferred Stock.

         (c)      The holder of a Right by the acceptance of the Right expressly
waives such holder's right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).

                  Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing shares of Common Stock of the Company); and any
registered holder of any Rights Certificate (or, prior to the Distribution Date,
a certificate representing shares of Common Stock of the Company), without the
consent of the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of a certificate representing shares of
Common Stock of the Company), may, in such holder's own behalf and for such
holder's own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
such holder's right to exercise the Rights evidenced by such Rights Certificate
or, prior to the Distribution Date, in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations hereunder, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to this Agreement.

                  Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:

                                      24.
<Page>

         (a)      prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common Stock of
the Company;

         (b)      after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;

         (c)      subject to Sections 6(a) and 7(f), the Company and the Rights
Agent may deem and treat the Person in whose name the Rights Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary; and

         (d)      notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; PROVIDED, HOWEVER, the Company shall use
commercially reasonably efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as practicable

                  Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the Units of
Preferred Stock or any other securities of the Company which may at any time be
issuable upon the exercise of the Rights represented thereby, nor shall anything
contained in this Agreement or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with this Agreement.

                  Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
under this Agreement and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without gross negligence or willful misconduct on the part of the Rights Agent,
for any action taken, suffered or omitted by the Rights Agent in connection with
the execution, acceptance and administration of this Agreement and the exercise
and performance of its duties, including the costs and expenses of defending
against and appealing any claim of liability in the premises.

                                      25.
<Page>

This indemnity shall survive the termination of this Agreement and the
expiration of the Rights. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company.

                  The Rights Agent may conclusively rely upon and shall be
protected and shall incur no liability for, or in respect of any action taken,
suffered or omitted by it in connection with, its administration of this
Agreement and the exercise and performance of its duties hereunder in reliance
upon any Rights Certificate or certificate for Units of Preferred Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20.

                  Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.

         (a)      Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the stock transfer or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; PROVIDED, that such corporation must be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.

         (b)      In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.

                  Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent:

                                      26.
<Page>

         (a)      Before the Rights Agent acts or refrains from acting, it may
consult with legal counsel of its choice (who may be legal counsel for the
Company), and the advice or opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken,
suffered or omitted by it in good faith and in accordance with such advice or
opinion.

         (b)      Whenever in the administration, exercise and performance of
its duties under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior
to taking, suffering or omitting any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
any officer of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken, suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.

         (c)      The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence or willful misconduct.

         (d)      The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.

         (e)      The Rights Agent shall not be under any liability or
responsibility in respect of the legality, validity or enforceability of this
Agreement or the execution and delivery hereof (except the due execution by the
Rights Agent) or in respect of the legality, validity or enforceability or the
execution of any Rights Certificate (except its countersignature); nor shall it
be liable or responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii)) or any adjustment in the
terms of the Rights (including the manner, method or amount thereof) provided
for in Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Rights Certificates after receipt of the
certificate described in Section 12); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Units of Preferred Stock or other securities to be issued
upon the exercise of any Rights or as to whether any such security will, when
issued, be validly authorized and issued, fully paid and nonassessable.

         (f)      The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.

         (g)      The Rights Agent is hereby authorized and directed to accept
instructions with respect to the administration, exercise and performance of its
duties hereunder from any one officer of the Company, and to apply to such
officer for advice or instructions in connection with

                                      27.
<Page>

its duties, and it shall not be responsible or liable for any action taken,
suffered or omitted by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those instructions.
Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action proposed
to be taken or omitted by the Rights Agent under this Agreement and the date on
and/or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any officer of the Company
actually received such application, unless any such officer shall have consented
in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.

         (h)      The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.

         (i)      The Rights Agent may execute and exercise any of the rights or
powers vested in it or perform any duty under this Agreement either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.

         (j)      No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if the Rights Agent in good faith believes that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.

         (k)      If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or exchange, the
certification on the form of assignment or form of election to purchase, as the
case may be, that the Rights evidenced by the Rights Certificate are not owned
by an Acquiring Person, or an Affiliate or Associate thereof, has either not
been completed or in any manner indicates any other response thereto, the Rights
Agent shall not take any further action with respect to such requested exercise,
transfer, split up, combination or exchange, without first consulting with the
Company.

                  Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock of the Company or Preferred Stock (as to
which the Rights Agent has received prior written notice) by registered or
certified mail, and the Company shall mail notice thereof to the holders

                                      28.
<Page>

of the Rights Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon thirty days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock or Preferred Stock (as to which the
Rights Agent has received prior written notice) by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty days after giving notice
of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit such holder's Rights
Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of any state of the United
States, in good standing, authorized under such laws to exercise corporate trust
or stock transfer powers, and subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock or Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.

                  Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its board of directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock of
the Company following the Distribution Date and prior to the Expiration Date,
the Company (a) shall, with respect to shares of Common Stock of the Company so
issued or sold pursuant to the exercise of stock options or under any employee
benefit plan or arrangement or upon the exercise, conversion or exchange of
securities of the Company currently outstanding or issued at any time in the
future by the Company and (b) may, in any other case, if deemed necessary or
appropriate by the board of directors of the Company issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; PROVIDED, HOWEVER, that (i) no such Rights Certificate shall be issued
and this sentence shall be null and void AB INITIO if, and to the extent that,
such issuance or this sentence would create a significant risk of or result in
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued or would create a significant risk of or
result in such options' or employee plans' or arrangements' failing to qualify
for otherwise

                                      29.
<Page>

available special tax treatment and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.

                  Section 23. REDEMPTION AND TERMINATION.

         (a)      The Company may, at its option, upon approval by the board of
directors, at any time on or prior to the Close of Business (or such later date
as may be determined by its board of directors) on the earlier of (i) the
Distribution Date or (ii) the Final Expiration Date redeem all but not less than
all the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date of this Agreement (such redemption price
being hereinafter referred to as the "REDEMPTION PRICE"), and the Company may,
at its option, pay the Redemption Price either in cash, shares of Common Stock
of the Company (based on the Current Per Share Market Price thereof at the time
of redemption), or any other form of consideration deemed appropriate by its
board of directors. The redemption of the Rights by the board of directors of
the Company may be made effective at such time on such basis and with such
conditions as the board of directors of the Company in its sole discretion may
establish. Any such redemption will be effective immediately upon the action of
the board of directors of the Company ordering the same, unless such action of
the board of directors of the Company expressly provides that such redemption
will be effective at a subsequent time or upon the occurrence or nonoccurrence
of one or more specified events (in which case such redemption will be effective
in accordance with the provisions of such action of the board of directors of
the Company).

         (b)      Immediately upon the effectiveness of the redemption of the
Rights pursuant to Section 23(a), and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; PROVIDED,
HOWEVER, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 calendar days after the
effectiveness of the redemption of the Rights, the Company shall give notice of
such redemption to the Rights Agent and shall mail a notice of redemption to all
the holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Stock. Any
notice which is mailed in such manner shall be deemed given, whether or not the
holder receives the notice. Each notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24, and other than in connection with the purchase
of shares of Common Stock prior to the Distribution Date.

         (c)      Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable pursuant to Section 7(a) at any
time when the Rights are redeemable hereunder.

                                      30.
<Page>

                  Section 24. EXCHANGE.

         (a)      The Company, at its option, upon approval by its board of
directors, at any time after any Person becomes an Acquiring Person, may
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for Units of Preferred Stock at an exchange ratio equal to, subject
to adjustment to reflect stock splits, stock dividends and similar transactions
occurring after the date hereof, that number obtained by dividing the Purchase
Price by the then Current Per Share Market Price per Unit of Preferred Stock on
the earlier of (i) the date on which any Person becomes an Acquiring Person and
(ii) the date on which a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity) is commenced within the meaning of Rule
14d-4(a) of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 20% or more of
the shares of Common Stock of the Company then outstanding (such exchange ratio
being hereinafter referred to as the "SECTION 24(A) EXCHANGE RATIO").
Notwithstanding the foregoing, the Company may not effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan maintained by the Company or any of its Subsidiaries,
or any trustee or fiduciary with respect to such plan acting in such capacity),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Common Stock of the Company
then outstanding.

         (b)      Immediately upon the action of the board of directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Units of Preferred Stock equal
to the number of such Rights held by such holder multiplied by the Section 24(a)
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; PROVIDED, HOWEVER, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner provided in this Agreement shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of Units of Preferred Stock
for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e)) held by each holder of Rights.

         (c)      In the event that the number of shares of Preferred Stock
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Preferred Stock for issuance upon exchange of the
Rights or make adequate provision to substitute (1) cash, (2) Common Stock of
the Company or other equity securities of the Company, (3) debt securities of
the Company, (4) other assets, or (5) any combination of the foregoing, having
an aggregate value equal to the aggregate Current

                                      31.
<Page>

Per Share Market Price of the Units of Preferred Stock that would otherwise be
issuable in such exchange, all as determined by the board of directors of the
Company (which determination shall be described in a statement filed with the
Rights Agent and shall be conclusive and binding on the Rights Agent, the
holders of the Rights and all other Persons). To the extent that the Company
determines that some action need be taken pursuant to Section 24(a), the board
of directors of the Company may temporarily suspend the exercisability of the
Rights for a period of up to sixty days following the date on which the event
described in Section 24(a) shall have occurred, in order to seek any
authorization of additional shares of Preferred Stock and/or to decide the
appropriate form of distribution to be made pursuant to the above provision and
to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended.

                  Section 25. NOTICE OF CERTAIN EVENTS.

         (a)      In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Preferred
Stock rights or warrants to subscribe for or to purchase any additional Units of
Preferred Stock or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision of outstanding Preferred
Stock), (iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o)), or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company or (vi) to declare or pay
any dividend on the Common Stock of the Company payable in shares of Common
Stock of the Company or to effect a subdivision, combination or consolidation of
the shares of Common Stock of the Company (by reclassification or otherwise than
by payment of dividends in shares of Common Stock), then, in each such case, the
Company shall give to each holder of a Rights Certificate, in accordance with
Section 26, a notice of such proposed action, which shall specify the Record
Date for the purposes of such stock dividend, or distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Common Stock of
the Company and/or shares of Preferred Stock, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by clause
(i) or (ii) above at least ten days prior to the Record Date for determining
holders of the shares of Preferred Stock for purposes of such action, and in the
case of any such other action, at least ten days prior to the date of the taking
of such proposed action or the date of participation therein by the holders of
the shares of Common Stock of the Company and/or shares of Preferred Stock,
whichever shall be the earlier.

         (b)      In case any of the events set forth in Section 11(a)(ii) shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, in accordance with Section 26, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii). In

                                      32.
<Page>

the event any Person becomes an Acquiring Person, the Company will promptly
notify the Rights Agent thereof.

                  Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing by the Company with the Rights Agent) as follows:

                  COLLATERAL THERAPEUTICS, INC.
                  11662 EL CAMINO REAL
                  SAN DIEGO, CA 92130
                  Attention:  Tyler Dylan, Esq.

Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sent by registered or certified
mail and shall be deemed given upon receipt and addressed (until another address
is filed in writing by the Rights Agent with the Company) as follows:

                  AMERICAN STOCK TRANSFER & TRUST COMPANY
                  59 MAIDEN LANE
                  NEW YORK, NY 10038
                  Attention:  Corporate Trust Department

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

                  Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date, the Company may supplement or amend this Agreement in any
respect, without the approval of any holders of Rights, by action of its board
of directors. From and after the Distribution Date, the Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Rights, by action of its board of directors in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person), including, without limitation, to change the Purchase
Price, the Redemption Price, any time periods herein specified, and any other
term hereof, any such supplement or amendment to be evidenced by a writing
signed by the Company and the Rights Agent; PROVIDED, however, that from and
after such time as any Person becomes an Acquiring Person, this Agreement shall
not be amended in any manner which would adversely affect the interests of the
holders of Rights. Upon receipt of a certificate from an appropriate officer of
the Company that the proposed supplement or amendment is consistent with this
Section 27 and, after such time as any Person

                                      33.
<Page>

has become an Acquiring Person, that the proposed supplement or amendment does
not adversely affect the interests of the holders of Rights, the Rights Agent
shall execute such supplement or amendment.

                  Section 28. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.

                  Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS.

         (a)      For all purposes of this Agreement, any calculation of the
number of shares of Common Stock of the Company outstanding at any particular
time, including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of the Company of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the Exchange Act. The board of directors of the Company shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the board of directors,
or the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing), which are done or made by the board of directors of the Company in
good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights Certificates and all other parties and
(y) not subject the board of directors of the Company to any liability to the
holders of the Rights.

         (b)      It is understood that an independent directors evaluation
committee (the "INDEPENDENT DIRECTORS EVALUATION COMMITTEE") of the board of
directors of the Company shall review and evaluate this Agreement in order to
consider whether the maintenance of this Agreement continues to be in the best
interests of the Company and its stockholders every three years from the date of
this Agreement. Following each such review, the Independent Directors Evaluation
Committee will communicate its conclusions to the full board of directors of the
Company, including any recommendations in light thereof as to whether this
Agreement should be modified or the Rights should be redeemed. The Independent
Directors Evaluation Committee shall be appointed by the board of directors of
the Company and shall comprise Directors of the Company who are not officers,
employees or Affiliates of the Company, PROVIDED, HOWEVER, that for the purposes
of this Section 29(b), no Director shall be deemed an Affiliate of the Company
solely due to his status as a Director of the Company.

                  Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, shares of Common Stock of the Company) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, shares of Common Stock of the Company).

                                      34.
<Page>

                  Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the board of
directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement and the right of redemption set forth in Section 23
shall have expired, such right shall be reinstated and shall not expire until
the tenth Business Day following the date of such determination by the board of
directors of the Company.

                  Section 32. GOVERNING LAW. This Agreement and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the internal laws of the State of Delaware
applicable to contracts to be made and performed entirely within such state,
without regard to the choice-of-law or conflict-of-laws principles of any
jurisdiction.

                  Section 33. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
one and the same instrument.

                  Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several sections of this Agreement are inserted or convenience only and shall
not control or affect the meaning or construction of any of the provisions of
this Agreement.

                                      35.
<Page>

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

                                 Collateral Therapeutics, Inc.

                                 By:  /S/  CHRISTOPHER J. REINHARD
                                      ----------------------------
                                 Name:   Christopher J. Reinhard
                                 Title:  President and Chief Operating Officer

                                 American Stock transfer & trust company

                                 By:  /S/  HERBERT J. LEMMER
                                      ----------------------------
                                 Name:   Herbert J. Lemmer
                                 Title:  Vice President

<Page>

                                                                       EXHIBIT A

                                      FORM

                                       of

                           CERTIFICATE OF DESIGNATION

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                          Collateral Therapeutics, Inc.

                         (Pursuant to Section 151 of the
                        Delaware General Corporation Law)

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

                  Collateral Therapeutics, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (hereinafter
called the "CORPORATION"), hereby certifies that the following resolution was
adopted by the board of directors of the Corporation as required by Section 151
of the General Corporation Law at a meeting duly called and held on September
19, 2001;

                  RESOLVED, that pursuant to the authority granted to and vested
in the board of directors of the Corporation (hereinafter the "BOARD") in
accordance with the provisions of the Certificate of Incorporation of the
Corporation, as currently in effect, the Board hereby creates a series of
Preferred Stock, par value $.001 per share (the "PREFERRED STOCK"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:

                  Series A Junior Participating Preferred Stock:

         Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "SERIES A
PREFERRED STOCK") and the number of shares constituting the Series A Preferred
Stock shall be forty thousand (40,000). Such number of shares may be increased
or decreased by resolution of the Board of Directors; PROVIDED, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

         Section 2. DIVIDENDS AND DISTRIBUTIONS.

                                      A-1
<Page>

         (a)      Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, each holder of a share
of Series A Preferred Stock, in preference to the holders of shares of common
stock, par value $.001 per share (the "COMMON STOCK"), of the Corporation, and
of any other junior stock, shall be entitled to receive, when declared by the
Board out of funds legally available for the purpose, dividends in an amount per
share (rounded to the nearest cent) equal to, subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

         (b)      The Corporation shall declare a dividend or distribution on
the shares of Series A Preferred Stock as provided in Section 2(a) immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); PROVIDED, HOWEVER, that, in the
event no dividend or distribution shall be declared by the Board on the Common
Stock for which it does not declare the dividend required to be declared on the
Preferred Stock pursuant to Section 2(a).

         (c)      Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than sixty days prior to the date fixed for the payment
thereof.

         Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:

         (a)      Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior

                                      A-2
<Page>

to such event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

         (b)      Except as otherwise provided herein, in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.

         (c)      Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.

         Section 4. CERTAIN RESTRICTIONS.

         (a)      Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:

                  (i)      declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock;

                  (ii)     declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the shares of Series A
Preferred Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;

                  (iii)    redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
PROVIDED, that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or

                  (iv)     redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as determined by the Board)
to all holders of such shares upon such terms as the Board, after consideration
of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the respective series or
classes.

                                      A-3
<Page>

         (b)      The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under Section 4(a),
purchase or otherwise acquire such shares at such time and in such manner.

         Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.

         Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.

         (a)      Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of shares of Series A Preferred Stock shall have received the greater of (x)
$1,000 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon to the date of such payment (the "SERIES A LIQUIDATION
PREFERENCE") and (y) an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock (the "COMMON
ADJUSTMENT"), or (ii) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (i) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event (the "ADJUSTMENT NUMBER").

         (b)      In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series A Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.

                                      A-4
<Page>

         (c)      In the event the Corporation shall at any time after October
1, 2001 (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.

         Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

         Section 8. NO REDEMPTION. The shares of Series A Preferred Stock shall
not be redeemable.

         Section 9. RANK. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all series
of any other class of the Corporation's Preferred Stock.

         Section 10. AMENDMENT. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least a majority of the outstanding shares of Series A Preferred Stock, voting
together as a single class.

                                      A-5
<Page>

                  IN WITNESS WHEREOF, this Certificate of Designation is
executed on behalf of the Corporation as of September 19, 2001.

                              Collateral Therapeutics, Inc.

                              By:
                                        -------------------------------------

                              Name:     Christopher J. Reinhard

                              Title:    President and Chief Operating Officer

<Page>

                                                                      EXHIBIT B

                           Form of Rights Certificate

                                   Certificate No. R-           ________ Rights

         NOT EXERCISABLE AFTER TEN YEAR ANNIVERSARY OF RECORD DATE OR EARLIER IF
         REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
         THE OPTION OF THE COMPANY AT $.01 PER RIGHT AND TO EXCHANGE ON THE
         TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
         RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
         ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
         RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
         NULL AND VOID.

                               Rights Certificate

                          Collateral Therapeutics, Inc.

                  This certifies that _____________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of September 19, 2001 (the "RIGHTS AGREEMENT"),
between Collateral Therapeutics, Inc. a Delaware corporation (the "COMPANY"),
and American Stock Transfer & Trust Company, as Right Agent (the "Rights
AGENT"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M., New
York City time, on October 1, 2001 at the office of the Rights Agent designated
for such purpose, or at the office of its successor as Rights Agent, one
one-thousandth (a "UNIT") of a fully paid non-assessable share of Series A
Junior Participating Preferred Stock, par value $.001 per share (the "SERIES A
PREFERRED STOCK") of the Company, at a purchase price of $85.00 per Unit of
Series A Preferred Stock (the "PURCHASE PRICE"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Rights Certificate (and the number of
Units of Series A Preferred Stock which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of October 1, 2001 based on the Series A Preferred Stock as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of Units of Series A Preferred Stock which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events.

                  This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder

                                      B-1
<Page>

of the Rights Agent, the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company.

                  This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Series A Preferred Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.

                  Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at a redemption
price of $.01 per Right.

                  No fractional shares of Series A Preferred Stock will be
issued upon the exercise of any Rights or Rights evidenced hereby (other than
fractions which are integral multiples of one one-thousandth of a share of
Series A Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.

                  No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Units of Series A Preferred Stock or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.

                                      B-2
<Page>

                  This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.

                  WITNESS the signature of the proper officers of the Company
and its corporate seal. Dated as of _______ __, 20__.

                                Collateral Therapeutics, Inc.

                                By:
                                          -------------------------------------
                                Name:     Christopher J. Reinhard

                                Title:    President and Chief Operating Officer

COUNTERSIGNED:

AMERICAN STOCK TRANSFER & TRUST COMPANY
AS RIGHTS AGENT

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

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

<Page>

                   Form of Reverse Side of Rights Certificate

                               FORM OF ASSIGNMENT

         (To be executed by the registered holder if such holder desires to
transfer the Rights Certificate.)

         FOR VALUE RECEIVED _________________hereby sells, assigns and transfers
unto ___________________________________________________________________________
                  (Please print name and address of transferee)

this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______ Attorney, to transfer
the within Rights Certificate on the books of the within-named Company, with
full power of substitution.

DATED:                               , 20
        -----------------------------    --

                                              ----------------------------------
                                                         Signature

Signature Guaranteed:

         Signatures must be guaranteed by a participant in a Securities Transfer
Association Inc. recognized signature guarantee medallion program.

<Page>

                                   CERTIFICATE

         The undersigned hereby certifies that the Rights evidenced by this
Rights Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (each as defined in the Rights Agreement).

                                              ----------------------------------
                                                         Signature

                             _______________________

                                     NOTICE

         The signature in the foregoing Form of Assignment must conform to the
name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.

         In the event the certification set forth above in the Form of
Assignment is not completed, the Company and the Rights Agent will deem the
beneficial owner of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (each as defined in the
Rights Agreement) and such Assignment will not be honored.

<Page>

                          FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise the Rights Certificate.)

To Collateral Therapeutics, Inc.

         The undersigned hereby irrevocably elects to exercise Rights
represented by this Rights Certificate to purchase the Units of Series A
Preferred Stock issuable upon the exercise of such Rights and requests that
certificates for such Series A Preferred Stock be issued in the name of:

Please insert social security
or other identifying number____________________________________________________
                                      (Please print name and address)

If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:

Please insert social security
or other identifying number____________________________________________________
                                      (Please print name and address)

DATED:                               , 20
        -----------------------------    --

                                              ----------------------------------
                                                         Signature

Signature Guaranteed:

         Signatures must be guaranteed by a participant in a Securities Transfer
Association Inc. recognized signature guarantee medallion program.

<Page>

                                   CERTIFICATE

         The undersigned hereby certifies that the Rights evidenced by this
Rights Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (each as defined in the Rights Agreement).

                                              ----------------------------------
                                                         Signature

                             _______________________

                                     NOTICE

         The signature in the foregoing Form of Election to Purchase must
conform to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.

         In the event the certification set forth above in the Form of Election
to Purchase, as the case may be, is not completed, the Company and the Rights
Agent will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (each
as defined in the Rights Agreement) and such Election to Purchase will not be
honored.

<Page>

                                                                      EXHIBIT C

                          COLLATERAL THERAPEUTICS, INC.

                          SUMMARY OF RIGHTS TO PURCHASE
                                 PREFERRED STOCK

         On September 19, 2001, Collateral Therapeutics, Inc.'s board of
directors declared a dividend distribution of one right (a "RIGHT") for each
outstanding share of our common stock to stockholders of record at the close of
business on October 1, 2001. Each Right entitles the registered holder to
purchase from the company one one-thousandth of a share of Series A Junior
Participating preferred stock, par value $.001 per share, at a purchase price of
$85.00, subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "RIGHTS AGREEMENT") between the Company and
American Stock Transfer & Trust Company, as rights agent.

         Initially, the Rights will be attached to all common stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed. The Rights will separate from the common stock and a
distribution date will occur upon the earlier of (i) ten days following a public
announcement that a person or group of affiliated or associated persons (an
"ACQUIRING PERSON") has (subject to certain exceptions) acquired, or obtained
the right to acquire, beneficial ownership of 20% or more of the outstanding
shares of our common stock (the "STOCK ACQUISITION DATE"), other than as a
result of repurchases of stock by the Company, or (ii) ten days (or such later
date as the board shall determine) following the commencement of a tender offer
or exchange offer that would result in a person or group beneficially owning 20%
or more of the outstanding shares of our common stock (the "DISTRIBUTION DATE").
Until the Distribution Date, (i) the Rights will be evidenced by the common
stock certificates and will be transferred with and only with such common stock
certificates, (ii) new common stock certificates issued after the record date
will contain a notation incorporating the Rights Agreement by reference, and
(iii) the surrender for transfer of any certificates for common stock
outstanding will also constitute the transfer of the Rights associated with the
common stock represented by such certificate. Pursuant to the Rights Agreement,
the Company reserves the right to require prior to the occurrence of any
Triggering Event (as defined below) that, upon any exercise of Rights, a number
of Rights be exercised so that only whole shares of preferred stock will be
issued.

         The Rights are not exercisable until the Distribution Date and will
expire at the close of business on October 1, 2011, unless earlier redeemed by
the Company as described below.

         As soon as practicable AFTER the Distribution Date, Rights certificates
will be mailed to holders of record of our common stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
certificates alone will represent the Rights. Except as otherwise determined by
the board, only shares of our common stock issued prior to the Distribution Date
will be issued with Rights.

                                      C-1
<Page>

         In the event that an Acquiring Person becomes (subject to certain
exceptions) the beneficial owner of 20% or more of the then outstanding shares
of common stock (other than pursuant to an offer for all the outstanding shares
of common stock that our board of directors determines to be fair to and
otherwise in the best interests of the company and its stockholders), each
holder of a Right will thereafter have the right to receive, upon exercise,
preferred stock (or, in certain circumstances, cash, property or other
securities of the company) having a value equal to two times the exercise price
of the Right. Notwithstanding any of the foregoing, following the occurrence of
any of the events set forth in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.

         For example, at an exercise price of $85.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase
$170.00 worth of preferred stock (or other consideration, as noted above) for
$85.00. Assuming that our preferred stock had a per share value of $10.00 at
such time, the holder of each valid Right would be entitled to purchase 17
shares of preferred stock for $85.00.

         In the event that, at any time following the Stock Acquisition Date,
(i) we are acquired in a merger or other business combination transaction in
which we are not the surviving corporation (other than a merger which follows an
offer described in the second preceding paragraph), or (ii) 50% or more of our
assets, cash flow or earning power is sold or transferred, each holder of a
Right (except Rights which previously have been voided) shall have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the Right. The events set forth in this
paragraph and in the second preceding paragraph are referred to as "TRIGGERING
EVENTS."

         At any time after a person becomes an Acquiring Person and prior to the
acquisition by such person or group of 50% or more of the outstanding common
stock, the board of directors may exchange the Rights (other than Rights owned
by the person or group which have become void), in whole or in part, at an
exchange ratio of one share of common stock, or one one-thousandth of a share of
preferred stock (or of a share of a class or series of our preferred stock
having equivalent rights, preferences and privileges), per Right (subject to
adjustment).

         At any time until 10 business days following the Stock Acquisition
Date, the board may redeem the Rights in whole, but not in part, at a price of
$0.01 per Right (payable in cash, common stock or other consideration deemed
appropriate by the board). Immediately upon the action of the board of directors
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the $.01 redemption price.

         An independent directors evaluation committee (the "INDEPENDENT
DIRECTORS EVALUATION Committee") of the Company, consisting of Directors of the
Company who are neither officers, employees nor affiliates of the Company will
review the Rights Agreement every three years and, if a majority of the members
of the Independent Directors Evaluation Committee deems it appropriate, may
recommend a modification or termination of the Rights Agreements.

                                      C-2
<Page>

         Until a Right is exercised, the holder of a Right will have no rights
by virtue of ownership as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the distribution of
the Rights will not be taxable to stockholders or to the Company, stockholders
may, depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable for preferred stock (or other consideration)
of the Company or for common stock of the acquiring company.

         Any of the provisions of the Rights Agreement may be amended by the
board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the board in order to cure
any ambiguity, to make changes which do not adversely affect the interests of
holders of Rights, or to shorten or lengthen any time period under the Rights
Agreement; PROVIDED, HOWEVER, that no amendment may be made at such time as the
Rights are not redeemable.

         A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a Current Report on Form 8-K. A copy of the
Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is incorporated herein
by reference.

                                      C-3

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