FINANCIAL INDUSTRIES CORP
EXHIBIT 10.12 - INDENTURE AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>14
<FILENAME>indenture.txt
<DESCRIPTION>EXHIBIT 10.12 - INDENTURE AGREEMENT
<TEXT>
                                  EXHIBIT 10.12

                        FINANCIAL INDUSTRIES CORPORATION

                                    as Issuer



                                    INDENTURE

                            Dated as of May 22, 2003



                            WILMINGTON TRUST COMPANY

                                   as Trustee



                  FLOATING RATE SENIOR DEBT SECURITIES DUE 2033



<PAGE>


                                TABLE OF CONTENTS


ARTICLE I       DEFINITIONS.................................................. 1

        SECTION 1.01    Definitions.......................................... 1

ARTICLE II      DEBT SECURITIES.............................................. 5

        SECTION 2.01    Authentication and Dating............................ 5
        SECTION 2.02    Form of Trustee's Certificate of Authentication...... 5
        SECTION 2.03    Form and Denomination of Debt Securities............. 6
        SECTION 2.04    Execution of Debt Securities......................... 6
        SECTION 2.05    Exchange and Registration of Transfer of Debt
                        Securities........................................... 6
        SECTION 2.06    Mutilated, Destroyed, Lost or Stolen Debt Securities. 9
        SECTION 2.07    Temporary Debt Securities........................... 10
        SECTION 2.08    Payment of Interest................................. 11
        SECTION 2.09    Cancellation of Debt Securities Paid, etc........... 12
        SECTION 2.10    Computation of Interest............................. 12
        SECTION 2.11    CUSIP Numbers....................................... 14

ARTICLE III     PARTICULAR COVENANTS OF THE COMPANY......................... 14

        SECTION 3.01    Payment of Principal, Premium and Interest.......... 14
        SECTION 3.02    Offices for Notices and Payments, etc............... 14
        SECTION 3.03    Appointments to Fill Vacancies in Trustee's Office.. 15
        SECTION 3.04    Provision as to Paying Agent........................ 15
        SECTION 3.05    Certificate to Trustee.............................. 16
        SECTION 3.06    Compliance with Consolidation Provisions............ 16

ARTICLE IV      LISTS AND REPORTS........................................... 16

        SECTION 4.01    Securityholders' Lists.............................. 16
        SECTION 4.02    Preservation and Disclosure of Lists................ 17
        SECTION 4.03    Reports............................................. 18

ARTICLE V       REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS................. 19

        SECTION 5.01    Events of Default................................... 19
        SECTION 5.02    Payment of Debt Securities on Default; Suit Therefor 20
        SECTION 5.03    Application of Moneys Collected by Trustee.......... 22
        SECTION 5.04    Proceedings by Securityholders...................... 22
        SECTION 5.05    Proceedings by Trustee.............................. 22
        SECTION 5.06    Remedies Cumulative and Continuing.................. 23
        SECTION 5.07    Direction of Proceedings and Waiver of Defaults by
                        Majority of Securityholders......................... 23
        SECTION 5.08    Notice of Defaults.................................. 24
        SECTION 5.09    Undertaking to Pay Costs............................ 24

                                     - i -


<PAGE>


ARTICLE VI      CONCERNING THE TRUSTEE...................................... 24

        SECTION 6.01    Duties and Responsibilities of Trustee.............. 24
        SECTION 6.02    Reliance on Documents, Opinions, etc................ 25
        SECTION 6.03    No Responsibility for Recitals, etc................. 26
        SECTION 6.04    Trustee, Authenticating Agent, Paying Agents, Transfer
                        Agents or Registrar May Own Debt Securities......... 27
        SECTION 6.05    Moneys to be Held in Trust.......................... 27
        SECTION 6.06    Compensation and Expenses of Trustee................ 27
        SECTION 6.07    Officers' Certificate as Evidence................... 28
        SECTION 6.08    Eligibility of Trustee.............................. 28
        SECTION 6.09    Resignation or Removal of Trustee................... 29
        SECTION 6.10    Acceptance by Successor Trustee..................... 30
        SECTION 6.11    Succession by Merger, etc........................... 31
        SECTION 6.12    Authenticating Agents............................... 31

ARTICLE VII     CONCERNING THE SECURITYHOLDERS.............................. 32

        SECTION 7.01    Action by Securityholders........................... 32
        SECTION 7.02    Proof of Execution by Securityholders............... 33
        SECTION 7.03    Who Are Deemed Absolute Owners...................... 33
        SECTION 7.04    Debt Securities Owned by Company Deemed Not
                        Outstanding......................................... 33
        SECTION 7.05    Revocation of Consents; Future Holders Bound........ 34

ARTICLE VIII    SECURITYHOLDERS MEETINGS.................................... 34

        SECTION 8.01    Purposes of Meetings................................ 34
        SECTION 8.02    Call of Meetings by Trustee......................... 35
        SECTION 8.03    Call of Meetings by Company or Securityholders...... 35
        SECTION 8.04    Qualifications for Voting........................... 35
        SECTION 8.05    Regulations......................................... 35
        SECTION 8.06    Voting.............................................. 36
        SECTION 8.07    Quorum; Actions..................................... 36

ARTICLE IX      SUPPLEMENTAL INDENTURES..................................... 37

        SECTION 9.01    Supplemental Indentures without Consent of
                        Securityholders..................................... 37
        SECTION 9.02    Supplemental Indentures with Consent of
                        Securityholders..................................... 38
        SECTION 9.03    Effect of Supplemental Indentures................... 39
        SECTION 9.04    Notation on Debt Securities......................... 39
        SECTION 9.05    Evidence of Compliance of Supplemental Indenture to be
                        Furnished to Trustee................................ 40

                                       ii


<PAGE>


ARTICLE X       REDEMPTION OF SECURITIES.................................... 40

        SECTION 10.01   Optional Redemption................................. 40
        SECTION 10.02   Notice of Redemption; Selection of Debt Securities.. 40
        SECTION 10.03   Payment of Debt Securities Called for Redemption.... 41

ARTICLE XI      CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE........... 41

        SECTION 11.01   Company May Consolidate, etc., on Certain Terms..... 41
        SECTION 11.02   Successor Entity to be Substituted.................. 42
        SECTION 11.03   Opinion of Counsel to be Given to Trustee........... 43

ARTICLE XII     SATISFACTION AND DISCHARGE OF INDENTURE..................... 43

        SECTION 12.01   Discharge of Indenture.............................. 43
        SECTION 12.02   Deposited Moneys to be Held in Trust by Trustee..... 43
        SECTION 12.03   Paying Agent to Repay Moneys Held................... 44
        SECTION 12.04   Return of Unclaimed Moneys.......................... 44

ARTICLE XIII    IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
                DIRECTORS................................................... 44

        SECTION 13.01   Indenture and Debt Securities Solely Corporate
                        Obligations......................................... 44

ARTICLE XIV     MISCELLANEOUS PROVISIONS.................................... 44

        SECTION 14.01   Successors.......................................... 44
        SECTION 14.02   Official Acts by Successor Entity................... 45
        SECTION 14.03   Surrender of Company Powers......................... 45
        SECTION 14.04   Addresses for Notices, etc.......................... 45
        SECTION 14.05   Governing Law....................................... 45
        SECTION 14.06   Evidence of Compliance with Conditions Precedent.... 45
        SECTION 14.07   Business Day Convention............................. 46
        SECTION 14.08   Table of Contents, Headings, etc.................... 46
        SECTION 14.09   Execution in Counterparts........................... 46
        SECTION 14.10   Separability........................................ 46
        SECTION 14.11   Assignment.......................................... 46

EXHIBITS
        EXHIBIT A       Form of Debt Security
        EXHIBIT B       Form of Officers' Certificate

                                      iii


<PAGE>


     THIS  INDENTURE,  dated as of May 22, 2003,  between  Financial  Industries
Corporation,  a holding company  incorporated in the State of Texas (hereinafter
sometimes  called the  "Company"),  and  Wilmington  Trust  Company,  a Delaware
banking corporation, as trustee (hereinafter sometimes called the "Trustee").

                              W I T N E S S E T H :

     WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issuance of its  Floating  Rate Senior Debt  Securities  due 2033 (the "Debt
Securities")  under this Indenture and to provide,  among other things,  for the
execution and authentication,  delivery and administration  thereof, the Company
has duly authorized the execution of this Indenture.

     NOW, THEREFORE,  in consideration of the premises,  and the purchase of the
Debt Securities by the holders  thereof,  the Company  covenants and agrees with
the Trustee for the equal and  proportionate  benefit of the respective  holders
from time to time of the Debt Securities as follows:


                                    ARTICLE I
                                   DEFINITIONS

SECTION 1.01     Definitions.

     The  terms  defined  in this  Section  1.01  (except  as  herein  otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this  Indenture  and  of  any  indenture  supplemental  hereto  shall  have  the
respective  meanings  specified in this Section 1.01. All accounting  terms used
herein and not expressly  defined shall have the meanings assigned to such terms
in  accordance  with  generally  accepted  accounting  principles  and the  term
"generally accepted accounting  principles" means such accounting  principles as
are generally accepted in the United States at the time of any computation.  The
words "herein," "hereof" and "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision.

     "Authenticating  Agent"  means any agent or agents of the Trustee  which at
the time shall be appointed and acting pursuant to Section 6.12.

     "Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors.

     "Board  of  Directors"  means  the  board  of  directors  or the  executive
committee or any other duly authorized designated officers of the Company.

                                     - 1 -


<PAGE>


     "Board Resolution" means a copy of a resolution  certified by the Secretary
or an Assistant  Secretary of the Company 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.

     "Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in Wilmington,  Delaware,  The City of New York or
Austin, Texas are permitted or required by law or executive order to close.

     "Calculation  Agent" means the Person  identified as "Trustee" in the first
paragraph hereof with respect to the Debt Securities.

     "Certificate"  means  a  certificate  signed  by any  one of the  principal
executive officer,  the principal financial officer or the principal  accounting
officer of the Company.

     "Company"  means  Financial  Industries  Corporation,   a  holding  company
incorporated  in the State of Texas,  and,  subject to the provisions of Article
XI, shall include its successors and assigns.

     "Debt  Security" or "Debt  Securities"  has the meaning stated in the first
recital of this Indenture.

     "Debt Security Register" has the meaning specified in Section 2.05.

     "Default"  means any event,  act or condition  that with notice or lapse of
time, or both, would constitute an Event of Default.

     "Defaulted Interest" has the meaning set forth in Section 2.08.

     "Event of Default"  means any event  specified in Section  5.01,  which has
continued for the period of time, if any, and after the giving of the notice, if
any, therein designated.

     "Indenture"  means this Indenture as originally  executed or, if amended or
supplemented as herein provided, as so amended or supplemented, or both.

     "Interest  Payment Date" means  February 23, May 23, August 23 and November
23 of each year, commencing on August 23, 2003, subject to Section 14.07.

     "Interest Period" has the meaning set forth in Section 2.08.

                                     - 2 -


<PAGE>


    "Interest  Rate" means,  with respect to any Interest  Period,  a per annum
rate of interest equal to LIBOR, as determined on the LIBOR  Determination  Date
for such Interest Period, plus 4.20%; provided,  however, that the Interest Rate
for any Interest Period prior to the Interest Period  commencing on the Interest
Payment Date in May 2008 may not exceed 12.5% per annum; provided, further, that
the  Interest  Rate for any  Interest  Period may not exceed  the  highest  rate
permitted  by New York law, as the same may be modified by United  States law of
general application.

     "LIBOR" means the London Interbank Offered Rate for three-month U.S. Dollar
deposits in Europe as determined by the  Calculation  Agent according to Section
2.10(b).

     "LIBOR Banking Day" has the meaning set forth in Section 2.10(b)(i).

     "LIBOR Business Day" has the meaning set forth in Section 2.10(b)(i).

     "LIBOR Determination Date" has the meaning set forth in Section 2.10(b)(i).

     "Maturity Date" means May 23, 2033, subject to Section 14.07.

     "Officers'  Certificate"  means a certificate signed by the Chairman of the
Board, the Vice Chairman, the President or any Vice President,  and by the Chief
Financial Officer, the Treasurer,  an Assistant Treasurer,  the Comptroller,  an
Assistant  Comptroller,  the Secretary or an Assistant Secretary of the Company,
and delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 14.06 if and to the extent required by the provisions of
such Section.

     "Opinion of Counsel"  means an opinion in writing  signed by legal counsel,
who may be an employee of or counsel to the Company, or who may be other counsel
reasonably  satisfactory  to the Trustee.  Each such opinion  shall  include the
statements  provided for in Section  14.06 if and to the extent  required by the
provisions of such Section.

     The term  "outstanding,"  when  used  with  reference  to Debt  Securities,
subject to the provisions of Section 7.04, means, as of any particular time, all
Debt Securities authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except

          (a)  Debt  Securities  theretofore  canceled  by  the  Trustee  or the
               Authenticating   Agent   or   delivered   to  the   Trustee   for
               cancellation;

          (b)  Debt  Securities,   or  portions  thereof,  for  the  payment  or
               redemption  of which  moneys in the  necessary  amount shall have
               been deposited in trust with the Trustee or with any Paying Agent
               (other  than the  Company)  or shall  have  been  set  aside  and
               segregated  in trust by the Company (if the Company  shall act as
               its own Paying Agent);  provided,  that, if such Debt Securities,
               or  portions  thereof,  are  to be  redeemed  prior  to  maturity
               thereof,  notice of such  redemption  shall  have  been  given as
               provided in Articles X and XIV or provision  satisfactory  to the
               Trustee shall have been made for giving such notice; and

                                     - 3 -


<PAGE>


       (c)  Debt Securities paid pursuant to Section 2.06 or in lieu of or in
               substitution  for which  other  Debt  Securities  shall have been
               authenticated and delivered pursuant to the terms of Section 2.06
               unless  proof  satisfactory  to the  Company  and the  Trustee is
               presented  that any such  Debt  Securities  are held by bona fide
               holders in due course.

     "Optional Redemption Date" has the meaning set forth in Section 10.01.

     "Optional  Redemption  Price"  means an amount in cash equal to 100% of the
principal  amount of the Debt  Securities  being  redeemed plus unpaid  interest
accrued on such Debt Securities to the Optional Redemption Date.

     "Paying Agent" has the meaning set forth in Section 3.04(e).

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

     "Predecessor Security" of any particular Debt Security means every previous
Debt Security  evidencing all or a portion of the same debt as that evidenced by
such particular  Debt Security;  and, for the purposes of this  definition,  any
Debt Security  authenticated and delivered under Section 2.06 in lieu of a lost,
destroyed or stolen Debt  Security  shall be deemed to evidence the same debt as
the lost, destroyed or stolen Debt Security.

     "Principal  Office of the Trustee" means the office of the Trustee at which
at any  particular  time its  corporate  trust  business  shall  be  principally
administered,  which at all times shall be located  within the United States and
at the time of the  execution of this  Indenture  shall be Rodney  Square North,
1100 North Market Street, Wilmington, DE 19890-0001.

     "Reference Banks" has the meaning set forth in Section 2.10(b)(ii).

     "Resale  Restriction  Termination  Date"  means,  with  respect to any Debt
Security,  the date which is the later of (i) two years (or such shorter  period
of time as  permitted  by Rule  144(k)  under  the  Securities  Act of 1933,  as
amended)  after  the  later of (y) the date of  original  issuance  of such Debt
Security and (z) the last date on which the Company or any Affiliate (as defined
in Rule 405 under the Securities Act of 1933, as amended) of the Company was the
holder of such Debt  Security (or any  predecessor  thereto) and (ii) such later
date, if any, as may be required by any subsequent change in applicable law.

                                   - 4 -


<PAGE>


    "Responsible  Officer"  means,  with  respect to the  Trustee,  any officer
within the Principal  Office of the Trustee with direct  responsibility  for the
administration  of the Indenture,  including any  vice-president,  any assistant
vice-president,  any secretary,  any assistant  secretary,  the  treasurer,  any
assistant treasurer,  any trust officer or other officer of the Principal Office
of the Trustee  customarily  performing  functions similar to those performed by
any of  the  above  designated  officers  and  also  means,  with  respect  to a
particular  corporate  trust  matter,  any other  officer to whom such matter is
referred  because  of that  officer's  knowledge  of and  familiarity  with  the
particular subject.

     "Securityholder," holder of Debt Securities" or other similar terms, means
any Person in whose name at the time a particular Debt Security is registered on
the Debt Security Register.

     "Subsidiary"  means,  with respect to any Person,  (i) any corporation,  at
least a majority of the outstanding voting stock of which is owned,  directly or
indirectly,  by such Person or one or more of its Subsidiaries or by such Person
and one or more of its Subsidiaries, (ii) any general partnership, joint venture
or similar entity, at least a majority of the outstanding partnership or similar
interests  of which  shall at the time be owned by such Person or one or more of
its  Subsidiaries  or by such  Person and one or more of its  Subsidiaries,  and
(iii) any limited partnership of which such Person or any of its Subsidiaries is
a general  partner.  For the purposes of this  definition,  "voting stock" means
shares,  interests,  participations  or other equivalents in the equity interest
(however  designated)  in such  Person  having  ordinary  voting  power  for the
election of a majority of the  directors  (or the  equivalent)  of such  Person,
other than shares,  interests,  participations or other equivalents  having such
power only by reason of the occurrence of a contingency.

     "Trust  Indenture  Act" means the Trust  Indenture  Act of 1939, as amended
from time to time, or any successor legislation.

     "Trustee"  means the Person  identified as "Trustee" in the first paragraph
hereof, and, subject to the provisions of Article VI hereof,  shall also include
its successors and assigns as Trustee hereunder.

     "United  States"  means the United  States of America  and the  District of
Columbia.

     "U.S. Person" has the meaning given to United States Person as set forth in
Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.

                                     - 5 -


<PAGE>



                                   ARTICLE II
                                 DEBT SECURITIES

SECTION 2.01     Authentication and Dating.

     Upon the  execution  and delivery of this  Indenture,  or from time to time
thereafter,  Debt Securities in an aggregate  principal  amount not in excess of
$15,000,000  may be  executed  and  delivered  by the Company to the Trustee for
authentication,  and the Trustee shall thereupon authenticate and make available
for delivery  said Debt  Securities to or upon the written order of the Company,
signed by its  Chairman  of the Board of  Directors  or  President,  without any
further action by the Company hereunder. In authenticating such Debt Securities,
and accepting the additional  responsibilities  under this Indenture in relation
to such Debt Securities,  the Trustee shall be entitled to receive, and (subject
to Section  6.01) shall be fully  protected  in relying upon a copy of any Board
Resolution  or  Board  Resolutions  relating  thereto  and,  if  applicable,  an
appropriate record of any action taken pursuant to such resolution, in each case
certified  by the  Secretary or an Assistant  Secretary or other  officers  with
appropriate delegated authority of the Company, as the case may be.

     The Trustee shall have the right to decline to authenticate and deliver any
Debt  Securities  under this Section if the Trustee,  being  advised by counsel,
determines  that  such  action  may not  lawfully  be taken or if a  Responsible
Officer of the Trustee in good faith  shall  determine  that such  action  would
expose the Trustee to personal liability to existing Securityholders.

     The definitive Debt  Securities  shall be typed,  printed,  lithographed or
engraved on steel engraved  borders or may be produced in any other manner,  all
as determined by the officers  executing such Debt  Securities,  as evidenced by
their execution of such Debt Securities.

SECTION 2.02     Form of Trustee's Certificate of Authentication.

     The Trustee's certificate of authentication on all Debt Securities shall be
in substantially the following form:

     This is one of the  Debt  Securities  referred  to in the  within-mentioned
Indenture.

                            Wilmington Trust Company,
                         not in its individual capacity
                              but solely as trustee


                                                By:  ___________________________
                                                     Authorized Officer

                                     - 6 -


<PAGE>


SECTION 2.03     Form and Denomination of Debt Securities.

     The Debt Securities shall be substantially in the form of Exhibit A hereto.
The Debt Securities  shall be in registered,  certificated  form without coupons
and in minimum  denominations  of $100,000  and any multiple of $1,000 in excess
thereof.  The  Debt  Securities  shall  be  numbered,   lettered,  or  otherwise
distinguished  in such manner or in  accordance  with such plans as the officers
executing the same may  determine  with the approval of the Trustee as evidenced
by the execution and authentication thereof.

SECTION 2.04     Execution of Debt Securities.

     The Debt  Securities  shall be  signed  in the  name and on  behalf  of the
Company by the manual or  facsimile  signature  of its  Chairman of the Board of
Directors or President under its corporate seal (if legally  required) which may
be affixed  thereto or printed,  engraved or otherwise  reproduced  thereon,  by
facsimile  or  otherwise,  and  which  need  not be  attested.  Only  such  Debt
Securities as shall bear thereon a certificate of  authentication  substantially
in the form herein before recited, executed by the Trustee or the Authenticating
Agent by the manual signature of an authorized officer, shall be entitled to the
benefits of this  Indenture  or be valid or  obligatory  for any  purpose.  Such
certificate  by the Trustee or the  Authenticating  Agent upon any Debt Security
executed by the Company shall be  conclusive  evidence that the Debt Security so
authenticated has been duly  authenticated and delivered  hereunder and that the
holder is entitled to the benefits of this Indenture.

     In case any  officer of the  Company  who shall have signed any of the Debt
Securities  shall cease to be such officer before the Debt  Securities so signed
shall have been authenticated and delivered by the Trustee or the Authenticating
Agent, or disposed of by the Company,  such Debt Securities  nevertheless may be
authenticated  and delivered or disposed of as though the Person who signed such
Debt  Securities had not ceased to be such officer of the Company;  and any Debt
Security  may be  signed on behalf of the  Company  by such  Persons  as, at the
actual date of the execution of such Debt Security, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.

     Every Debt Security shall be dated the date of its authentication.

SECTION 2.05     Exchange and Registration of Transfer of Debt Securities.

     The Company shall cause to be kept, at the office or agency  maintained for
the purpose of  registration of transfer and for exchange as provided in Section
3.02, a register (the "Debt Security  Register") for the Debt Securities  issued
hereunder in which, subject to such reasonable  regulations as it may prescribe,
the  Company  shall  provide  for the  registration  and  transfer  of all  Debt
Securities  as provided in this  Article II. Such  register  shall be in written
form or in any other form capable of being  converted into written form within a
reasonable time.

                                     - 7 -


<PAGE>


     Debt Securities to be exchanged may be surrendered at the Principal  Office
of the  Trustee or at any office or agency to be  maintained  by the Company for
such purpose as provided in Section  3.02,  and the Company shall  execute,  the
Company or the Trustee  shall  register  and the  Trustee or the  Authenticating
Agent shall  authenticate and make available for delivery in exchange  therefor,
the Debt  Security  or Debt  Securities  which  the  Securityholder  making  the
exchange shall be entitled to receive.  Upon due presentment for registration of
transfer of any Debt Security at the  Principal  Office of the Trustee or at any
office or agency of the  Company  maintained  for such  purpose as  provided  in
Section  3.02,  the Company  shall  execute,  the  Company or the Trustee  shall
register and the Trustee or the Authenticating Agent shall authenticate and make
available for delivery in the name of the transferee or transferees,  a new Debt
Security for a like aggregate principal amount.  Registration or registration of
transfer  of any Debt  Security  by the  Trustee or by any agent of the  Company
appointed pursuant to Section 3.02, and delivery of such Debt Security, shall be
deemed to complete the  registration  or  registration  of transfer of such Debt
Security.

     All Debt Securities  presented for registration of transfer or for exchange
or  payment  shall  (if  so  required  by the  Company  or  the  Trustee  or the
Authenticating  Agent)  be duly  endorsed  by, or be  accompanied  by, a written
instrument or  instruments of transfer in form  satisfactory  to the Company and
either the Trustee or the  Authenticating  Agent duly executed by, the holder or
such holder's attorney duly authorized in writing.

     No  service  charge  shall  be made for any  exchange  or  registration  of
transfer of Debt Securities,  but the Company or the Trustee may require payment
of a sum sufficient to cover any tax, fee or other governmental  charge that may
be imposed in  connection  therewith  other than  exchanges  pursuant to Section
2.07, Section 9.04 or Section 10.03 not involving any transfer.

     The Company or the Trustee  shall not be required to exchange or register a
transfer of any Debt Security for a period of 15 days immediately  preceding the
date of selection of Debt Securities for redemption.

     Notwithstanding the foregoing, Debt Securities may not be transferred prior
to the Resale Restriction  Termination Date except in compliance with the legend
set forth below,  unless otherwise  determined by the Company in accordance with
applicable law, which legend shall be placed on each Debt Security:

                                     - 8 -


<PAGE>


     THIS SECURITY HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT"),  OR ANY  STATE  SECURITIES  LAWS OR ANY OTHER
APPLICABLE   SECURITIES  LAWS.   NEITHER  THIS  SECURITY  NOR  ANY  INTEREST  OR
PARTICIPATION  HEREIN MAY BE REOFFERED,  SOLD, ASSIGNED,  TRANSFERRED,  PLEDGED,
ENCUMBERED  OR  OTHERWISE  DISPOSED  OF IN THE ABSENCE OF SUCH  REGISTRATION  OR
UNLESS SUCH  TRANSACTION  IS EXEMPT  FROM,  OR NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION  HEREIN, BY ITS ACCEPTANCE  HEREOF OR THEREOF,  AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION  HEREIN  PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE  SECURITIES  ACT)
AFTER THE LATER OF (Y) THE DATE OF  ORIGINAL  ISSUANCE  HEREOF  AND (Z) THE LAST
DATE ON WHICH THE  COMPANY OR ANY  AFFILIATE  (AS  DEFINED IN RULE 405 UNDER THE
SECURITIES  ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR  THERETO) AND (ii) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY ANY SUBSEQUENT  CHANGE IN APPLICABLE  LAW, ONLY (A) TO THE
COMPANY,  (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED  INSTITUTIONAL  BUYER", AS
DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE  IN  RELIANCE  ON  RULE  144A,  (C)  PURSUANT  TO  AN  EXEMPTION  FROM  THE
REGISTRATION  REQUIREMENTS  OF THE SECURITIES  ACT TO AN  "ACCREDITED  INVESTOR"
WITHIN THE MEANING OF  SUBPARAGRAPH  (a) (1),  (2),  (3), (7) OR (8) OF RULE 501
UNDER THE  SECURITIES  ACT THAT IS ACQUIRING  THIS  SECURITY OR SUCH INTEREST OR
PARTICIPATION  FOR ITS OWN  ACCOUNT,  OR FOR THE  ACCOUNT OF SUCH AN  ACCREDITED
INVESTOR,  FOR INVESTMENT  PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION  WITH, ANY  DISTRIBUTION  IN VIOLATION OF THE SECURITIES  ACT, (D)
PURSUANT  TO OFFERS AND SALES TO NON-US  PERSONS  THAT OCCUR  OUTSIDE THE UNITED
STATES  PURSUANT TO  REGULATION  S UNDER THE  SECURITIES  ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT,  SUBJECT TO THE COMPANY'S  RIGHT PRIOR TO ANY SUCH OFFER,  SALE OR TRANSFER
PURSUANT TO CLAUSE (C),  (D) OR (E) ABOVE TO REQUIRE THE  DELIVERY OF AN OPINION
OF  COUNSEL,  CERTIFICATION  AND/OR  OTHER  INFORMATION  SATISFACTORY  TO  IT IN
ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
THE HOLDER OF THIS  SECURITY OR ANY  INTEREST OR  PARTICIPATION  HEREIN,  BY ITS
ACCEPTANCE  HEREOF OR  THEREOF,  AS THE CASE MAY BE,  AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.

     THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE  HEREOF OR THEREOF,  AS THE CASE MAY BE, ALSO AGREES,  REPRESENTS AND
WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,  INDIVIDUAL  RETIREMENT  ACCOUNT OR
OTHER PLAN OR ARRANGEMENT  SUBJECT TO TITLE I OF THE EMPLOYEE  RETIREMENT INCOME
SECURITY  ACT OF 1974,  AS AMENDED  ("ERISA"),  OR SECTION  4975 OF THE INTERNAL
REVENUE  CODE OF 1986,  AS AMENDED (THE  "CODE")  (EACH A "PLAN"),  OR AN ENTITY

                                     - 9 -


<PAGE>


WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT
IN THE ENTITY AND NO PERSON  INVESTING  "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR
HOLD  THIS  SECURITY  OR ANY  INTEREST  OR  PARTICIPATION  HEREIN,  UNLESS  SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE  RELIEF  AVAILABLE  UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED  TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 OR ANOTHER  APPLICABLE  EXEMPTION  OR ITS  PURCHASE AND HOLDING OF
THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION 406
OF ERISA OR SECTION 4975 OF THE CODE WITH  RESPECT TO SUCH  PURCHASE OR HOLDING.
ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN
WILL BE  DEEMED  TO HAVE  REPRESENTED  BY ITS  PURCHASE  AND  HOLDING  HEREOF OR
THEREOF,  AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
WITHIN THE MEANING OF SECTION 3(3) OF ERISA,  OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS  APPLICABLE,  A  TRUSTEE  OR OTHER  PERSON  ACTING  ON  BEHALF OF AN
EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF
ANY  EMPLOYEE  BENEFIT  PLAN OR PLAN TO  FINANCE  SUCH  PURCHASE,  OR (ii)  SUCH
PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED  TRANSACTION  UNDER SECTION
406 OF  ERISA OR  SECTION  4975 OF THE CODE  FOR  WHICH  THERE IS NO  APPLICABLE
STATUTORY OR ADMINISTRATIVE EXEMPTION.

     IN CONNECTION  WITH ANY TRANSFER,  THE HOLDER OF THIS SECURITY WILL DELIVER
TO THE REGISTRAR AND TRANSFER AGENT SUCH  CERTIFICATES AND OTHER  INFORMATION AS
MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER  COMPLIES WITH THE
FOREGOING RESTRICTIONS.

     THIS  SECURITY  WILL BE  ISSUED  AND  MAY BE  TRANSFERRED  ONLY IN  MINIMUM
DENOMINATIONS  OF  $100,000  AND  MULTIPLES  OF $1,000 IN  EXCESS  THEREOF.  ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL
BE  DEEMED  TO BE VOID AND OF NO LEGAL  EFFECT  WHATSOEVER.  ANY SUCH  PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR  PARTICIPATION  HEREIN FOR ANY  PURPOSE,  INCLUDING,  BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND
SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

SECTION 2.06      Mutilated, Destroyed, Lost or Stolen Debt Securities.

     In case any Debt Security shall become  mutilated or be destroyed,  lost or
stolen,  the Company  shall  execute,  and upon its written  request the Trustee
shall  authenticate  and  deliver,  a new Debt  Security  bearing  a number  not
contemporaneously  outstanding,  in exchange and  substitution for the mutilated
Debt  Security,  or in lieu of and in  substitution  for the  Debt  Security  so
destroyed,  lost or stolen.  In every case the applicant for a substituted  Debt
Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless,  and, in every case of
destruction,  loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction,  loss or theft of
such Debt Security and of the ownership thereof.

                                     - 10 -


<PAGE>


     The Trustee may authenticate any such substituted Debt Security and deliver
the same  upon the  written  request  or  authorization  of any  officer  of the
Company.  Upon the issuance of any  substituted  Debt Security,  the Company may
require the payment of a sum  sufficient to cover any tax or other  governmental
charge that may be imposed in relation thereto and any other expenses  connected
therewith.  In case any Debt Security which has matured or is about to mature or
has been called for  redemption in full shall become  mutilated or be destroyed,
lost or stolen,  the Company may, instead of issuing a substitute Debt Security,
pay or authorize the payment of the same (without  surrender  thereof  except in
the case of a mutilated  Debt  Security) if the applicant for such payment shall
furnish to the Company  and the Trustee  such  security or  indemnity  as may be
required by them to save each of them harmless and, in case of destruction, loss
or  theft,  evidence  satisfactory  to the  Company  and to the  Trustee  of the
destruction, loss or theft of such Security and of the ownership thereof.

     Every  substituted  Debt Security issued pursuant to the provisions of this
Section  2.06 by virtue of the fact that any such Debt  Security  is  destroyed,
lost or stolen shall  constitute  an  additional  contractual  obligation of the
Company,  whether or not the  destroyed,  lost or stolen Debt Security  shall be
found at any time,  and shall be entitled to all the benefits of this  Indenture
equally and  proportionately  with any and all other Debt Securities duly issued
hereunder.  All  Debt  Securities  shall  be held and  owned  upon  the  express
condition  that,  to the extent  permitted  by  applicable  law,  the  foregoing
provisions  are  exclusive  with  respect  to  the  replacement  or  payment  of
mutilated,  destroyed, lost or stolen Debt Securities and shall preclude any and
all other  rights or  remedies  notwithstanding  any law or statute  existing or
hereafter  enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.

SECTION 2.07     Temporary Debt Securities.

     Pending the  preparation  of definitive  Debt  Securities,  the Company may
execute and the Trustee  shall  authenticate  and make  available  for  delivery
temporary Debt Securities  that are typed,  printed or  lithographed.  Temporary
Debt  Securities  shall  be  issuable  in  any  authorized   denomination,   and
substantially  in the form of the  definitive  Debt  Securities  but  with  such
omissions,  insertions and  variations as may be appropriate  for temporary Debt
Securities,  all as may be determined by the Company.  Every such temporary Debt
Security  shall be executed by the Company and be  authenticated  by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect,  as the definitive Debt  Securities.  Without  unreasonable  delay,  the
Company  will  execute and deliver to the  Trustee or the  Authenticating  Agent
definitive  Debt  Securities and thereupon any or all temporary Debt  Securities
may be surrendered in exchange therefor,  at the Principal Office of the Trustee
or at any  office  or agency  maintained  by the  Company  for such  purpose  as
provided  in Section  3.02,  and the Trustee or the  Authenticating  Agent shall
authenticate and make available for delivery in exchange for such temporary Debt
Securities a like aggregate principal amount of such definitive Debt Securities.
Such  exchange  shall be made by the  Company at its own expense and without any
charge  therefor  except  that  in  case  of  any  such  exchange   involving  a
registration  of transfer the Company may require payment of a sum sufficient to
cover any tax, fee or other governmental  charge that may be imposed in relation
thereto. Until so exchanged, the temporary Debt Securities shall in all respects
be  entitled  to the same  benefits  under this  Indenture  as  definitive  Debt
Securities authenticated and delivered hereunder.

                                     - 11 -


<PAGE>



SECTION 2.08     Payment of Interest.

     Each Debt Security will bear interest at the then applicable  Interest Rate
(i) in the  case of the  initial  Interest  Period,  for the  period  from,  and
including,  the  date  of  original  issuance  of such  Debt  Security  to,  but
excluding, the initial Interest Payment Date and (ii) thereafter, for the period
from, and including,  the first day following the end of the preceding  Interest
Period to, but excluding,  the related  Interest Payment Date or, in the case of
the last Interest Period, the related Optional Redemption Date or Maturity Date,
as  applicable  (each such  period,  an  "Interest  Period"),  on the  principal
thereof,  on any  overdue  principal  and (to the  extent  that  payment of such
interest is  enforceable  under  applicable  law) on any overdue  installment of
interest (including Defaulted  Interest),  payable (subject to the provisions of
Article XII) on each Interest  Payment Date.  Interest on any Debt Security that
is payable,  and is punctually paid or duly provided for by the Company,  on any
Interest  Payment  Date  shall be paid to the  Person  in whose  name  such Debt
Security (or one or more  Predecessor  Securities) is registered at the close of
business on the regular record date for such interest  installment,  except that
interest  payable on the Maturity Date or any Optional  Redemption  Date, as the
case may be,  shall be paid to the  Person to whom  principal  is paid.  In case
(i) the  Maturity Date of any Debt Security or (ii) any Debt Security or portion
thereof is called for redemption  and the related  Optional  Redemption  Date is
subsequent to the regular record date with respect to any Interest  Payment Date
and either on or prior to such  Interest  Payment  Date,  interest  on such Debt
Security will be paid upon presentation and surrender of such Debt Security.

     Any interest on any Debt  Security that is payable,  but is not  punctually
paid or duly provided for by the Company,  on any Interest  Payment Date (herein
called  "Defaulted  Interest") shall forthwith cease to be payable to the holder
on the relevant  regular  record date by virtue of having been such holder,  and
such  Defaulted  Interest  shall be paid by the  Company to the Persons in whose
names such Debt  Securities (or their  respective  Predecessor  Securities)  are
registered at the close of business on a special  record date for the payment of
such  Defaulted  Interest,  which shall be fixed in the  following  manner:  the
Company shall notify the Trustee in writing of the amount of Defaulted  Interest
proposed  to be paid on each such  Debt  Security  and the date of the  proposed
payment,  and at the same time the  Company  shall  deposit  with the Trustee an
amount of money equal to the aggregate  amount proposed to be paid in respect of
such Defaulted  Interest or shall make arrangements  reasonably  satisfactory to
the Trustee for such  deposit  prior to the date of the proposed  payment,  such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as provided in this paragraph.  Thereupon the Trustee
shall fix a special  record  date for the  payment of such  Defaulted  Interest,
which shall not be more than fifteen nor less than ten days prior to the date of
the proposed payment and not less than ten days after the receipt by the Trustee
of the notice of the proposed  payment.  The Trustee shall  promptly  notify the
Company of such  special  record date and, in the name and at the expense of the

                                    - 12 -


<PAGE>


Company,  shall cause notice of the proposed payment of such Defaulted  Interest
and the special record date therefor to be mailed,  first class postage prepaid,
to each  Securityholder at his or her address as it appears in the Debt Security
Register,  not less than ten days prior to such special  record date.  Notice of
the proposed  payment of such  Defaulted  Interest  and the special  record date
therefor having been mailed as aforesaid,  such Defaulted Interest shall be paid
to the  Persons  in whose  names  such  Debt  Securities  (or  their  respective
Predecessor   Securities)  are  registered  on  such  special  record  date  and
thereafter  the Company shall have no further  payment  obligation in respect of
the Defaulted Interest.

     The term  "regular  record date",  as used in this Section,  shall mean the
fifteenth day prior to the applicable Interest Payment Date, whether or not such
day is a Business Day.

     Subject to the foregoing  provisions  of this  Section,  each Debt Security
delivered  under this Indenture upon  registration of transfer of or in exchange
for or in lieu of any other Debt  Security  shall  carry the rights to  interest
accrued  and  unpaid,  and to  accrue,  that were  carried  by such  other  Debt
Security.

SECTION 2.09     Cancellation of Debt Securities Paid, etc.

     All Debt  Securities  surrendered  for the purpose of payment,  redemption,
exchange or  registration  of transfer,  shall, if surrendered to the Company or
any Paying Agent, be surrendered to the Trustee and promptly canceled by it, or,
if surrendered  to the Trustee or any  Authenticating  Agent,  shall be promptly
canceled by it, and no Debt Securities shall be issued in lieu thereof except as
expressly  permitted  by any of the  provisions  of  this  Indenture.  All  Debt
Securities  canceled  by any  Authenticating  Agent  shall be  delivered  to the
Trustee.  The Trustee  shall  destroy all canceled  Debt  Securities  unless the
Company  otherwise  directs the  Trustee in  writing,  in which case the Trustee
shall dispose of such Debt Securities as directed by the Company. If the Company
shall acquire any of the Debt Securities,  however,  such acquisition  shall not
operate as a redemption or satisfaction of the indebtedness  represented by such
Debt  Securities  unless and until the same are  surrendered  to the Trustee for
cancellation.

SECTION 2.10     Computation of Interest.

     (a) The amount of interest payable for any Interest Period will be computed
on the basis of a 360-day  year and the  actual  number of days  elapsed in such
Interest Period.

     (b) LIBOR shall be  determined by the  Calculation  Agent for each Interest
Period in accordance with the following provisions:

          (i)  On the second  LIBOR  Business  Day  (provided,  that on such day
               commercial  banks are open for  business  (including  dealings in
               foreign currency deposits) in London (a "LIBOR Banking Day"), and
               otherwise the next  preceding  LIBOR  Business Day that is also a
               LIBOR  Banking Day) prior to the March 1, June 1,  September 1 or
               December  1, as the  case  may  be,  immediately  succeeding  the
               commencement  of such  Interest  Period  (or,  in the case of the
               first Interest Period,  on May 20, 2003) (each such day, a "LIBOR

                                    - 13 -


<PAGE>


               Determination  Date"), LIBOR shall equal the rate, as obtained by
               the Calculation  Agent,  for three-month  U.S. Dollar deposits in
               Europe,   which   appears  on   Telerate   (as   defined  in  the
               International  Swaps  and  Derivatives  Association,   Inc.  2000
               Interest  Rate and Currency  Exchange  Definitions)  page 3750 or
               such other page as may replace  such page 3750,  as of 11:00 a.m.
               (London  time) on such LIBOR  Determination  Date, as reported by
               Bloomberg  Financial  Markets  Commodities  News or any successor
               service  ("Telerate  Page 3750").  "LIBOR Business Day" means any
               day  that  is not a  Saturday,  Sunday  or  other  day  on  which
               commercial  banking  institutions  in The  City  of New  York  or
               Wilmington,  Delaware  are  authorized  or  obligated  by  law or
               executive  order to be  closed.  If such  rate is  superseded  on
               Telerate Page 3750 by a corrected  rate before 12:00 noon (London
               time) on such LIBOR  Determination Date, the corrected rate as so
               substituted will be LIBOR for such LIBOR Determination Date.

          (ii) If, on such LIBOR  Determination  Date, such rate does not appear
               on Telerate Page 3750, the Calculation  Agent shall determine the
               arithmetic mean of the offered  quotations of the Reference Banks
               to leading banks in the London  interbank  market for three-month
               U.S.  Dollar  deposits in Europe (in an amount  determined by the
               Calculation  Agent) by reference to requests for quotations as of
               approximately   11:00   a.m.   (London   time)   on  such   LIBOR
               Determination Date made by the Calculation Agent to the Reference
               Banks. If, on such LIBOR  Determination Date, at least two of the
               Reference  Banks provide such  quotations,  LIBOR shall equal the
               arithmetic   mean  of  such   quotations.   If,  on  such   LIBOR
               Determination  Date,  only  one or  none of the  Reference  Banks
               provide  such  a  quotation,  LIBOR  shall  be  deemed  to be the
               arithmetic  mean of the  offered  quotations  that at  least  two
               leading  banks  in The  City  of New  York  (as  selected  by the
               Calculation  Agent) are quoting on such LIBOR  Determination Date
               for three-month  U.S. Dollar deposits in Europe at  approximately
               11:00  a.m.  (London  time)  (in  an  amount  determined  by  the
               Calculation Agent). As used herein,  "Reference Banks" means four
               major  banks  in the  London  interbank  market  selected  by the
               Calculation Agent.

          (iii)If the Calculation Agent is required but is unable to determine a
               rate in accordance  with at least one of the procedures  provided
               above,  LIBOR for such  Interest  Period shall be LIBOR in effect
               for the immediately preceding Interest Period.

     (c) All percentages  resulting from any calculations on the Debt Securities
will be  rounded,  if  necessary,  to the nearest  one  hundred-thousandth  of a
percentage point, with five  one-millionths of a percentage point rounded upward
(e.g.,  9.876545% (or .09876545)  being rounded to 9.87655% (or .0987655)),  and
all dollar amounts used in or resulting from such calculation will be rounded to
the nearest cent (with one-half cent being rounded upward).


                                     - 14 -


<PAGE>


     (d) On each LIBOR  Determination  Date, the Calculation Agent shall notify,
in writing,  the Company and the Paying Agent of the  applicable  Interest  Rate
that applies to the related Interest Period.  The Calculation  Agent shall, upon
the  request  of a holder  of any Debt  Securities,  inform  such  holder of the
Interest Rate that applies to the related Interest Period. All calculations made
by the  Calculation  Agent in the absence of manifest  error shall be conclusive
for all  purposes  and  binding  on the  Company  and the  holders  of the  Debt
Securities.  The Paying Agent shall be entitled to rely on information  received
from the  Calculation  Agent or the Company as to the applicable  Interest Rate.
The Company shall, from time to time,  provide any necessary  information to the
Paying Agent  relating to any original  issue  discount and interest on the Debt
Securities  that is included in any payment and  reportable  for taxable  income
calculation purposes.

SECTION 2.11     CUSIP Numbers.

     The Company in issuing  the Debt  Securities  may use a "CUSIP"  number (if
then  generally in use),  and, if so, the Trustee shall use a "CUSIP"  number in
notices of redemption as a convenience to  Securityholders;  provided,  that any
such notice may state that no  representation  is made as to the  correctness of
such number  either as printed on the Debt  Securities  or as  contained  in any
notice  of a  redemption  and that  reliance  may be  placed  only on the  other
identification  numbers printed on the Debt Securities,  and any such redemption
shall not be affected by any defect in or omission of such numbers.  The Company
will promptly notify the Trustee in writing of any change in the CUSIP number.


                                  ARTICLE III
                       PARTICULAR COVENANTS OF THE COMPANY

SECTION 3.01     Payment of Principal, Premium and Interest.

     (a) The Company  covenants and agrees that it will duly and  punctually pay
or cause to be paid all  payments due in respect of the Debt  Securities  at the
place, at the respective  times and in the manner provided in this Indenture and
the Debt  Securities.  Payment of the  principal  of and  premium,  if any,  and
interest  on the  Debt  Securities  due on the  Maturity  Date  or any  Optional
Redemption  Date, as the case may be, will be made by the Company in immediately
available funds against  presentation and surrender of such Debt Securities.  At
the option of the Company,  each  installment of interest on the Debt Securities
due on an Interest  Payment  Date other than the  Maturity  Date or any Optional
Redemption  Date, as the case may be, may be paid (i) by mailing checks for such
interest payable to the order of the holders of Debt Securities entitled thereto
as they  appear  on the  Debt  Security  Register  or (ii) by wire  transfer  of
immediately available funds to any account with a banking institution located in
the United  States  designated by such holders to the Paying Agent no later than
the related record date.  Notwithstanding  anything to the contrary contained in
this  Indenture  or any Debt  Security,  if InCapS  Funding I, Ltd. or a trustee
thereof is the holder of any Debt Security, then all payments in respect of such
Debt Security  shall be made bythe Company in immediately  available  funds when
due.

                                     - 15 -


<PAGE>


     (b) The Company will treat the Debt  Securities  as  indebtedness,  and the
interest  payable in respect of such Debt  Securities as interest,  for all U.S.
federal  income tax  purposes.  All payments in respect of such Debt  Securities
will be made  free and clear of U.S.  withholding  tax to any  beneficial  owner
thereof  that has  provided an  Internal  Revenue  Service  Form W-8 BEN (or any
substitute or successor form) establishing its non-U.S.  status for U.S. federal
income tax purposes.

SECTION 3.02     Offices for Notices and Payments, etc.

     So long as any of the Debt Securities remain outstanding,  the Company will
maintain in Wilmington,  Delaware or in Austin,  Texas an office or agency where
the Debt Securities may be presented for payment,  an office or agency where the
Debt  Securities may be presented for  registration of transfer and for exchange
as provided in this  Indenture and an office or agency where notices and demands
to or upon the Company in respect of the Debt  Securities  or of this  Indenture
may be  served.  The  Company  will give to the  Trustee  written  notice of the
location  of any such  office or agency and of any change of  location  thereof.
Until  otherwise  designated from time to time by the Company in a notice to the
Trustee, or specified as contemplated by Section 2.05, such office or agency for
all of the above purposes shall be the Principal Office of the Trustee.  In case
the  Company  shall fail to maintain  any such  office or agency in  Wilmington,
Delaware or in Austin,  Texas, or shall fail to give such notice of the location
or of any change in the location thereof,  presentations and demands may be made
and notices may be served at the Principal Office of the Trustee.

     In addition to any such office or agency, the Company may from time to time
designate  one or more  offices or  agencies  outside  Wilmington,  Delaware  or
Austin,  Texas where the Debt  Securities may be presented for  registration  of
transfer  and for  exchange in the manner  provided in this  Indenture,  and the
Company may from time to time rescind such designation,  as the Company may deem
desirable  or  expedient;   provided,  however,  that  no  such  designation  or
rescission shall in any manner relieve the Company of its obligation to maintain
any such office or agency in  Wilmington,  Delaware or in Austin,  Texas for the
purposes  above  mentioned.  The Company will give to the Trustee prompt written
notice of any such designation or rescission thereof.

SECTION 3.03     Appointments to Fill Vacancies in Trustee's Office.

     The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee,  will appoint,  in the manner  provided in Section 6.09, a Trustee,  so
that there shall at all times be a Trustee hereunder.

                                     - 16 -


<PAGE>


SECTION 3.04     Provision as to Paying Agent.

     (a) If the Company shall appoint a Paying Agent other than the Trustee,  it
will cause such Paying Agent to execute and deliver to the Trustee an instrument
in which such agent shall agree with the  Trustee,  subject to the  provision of
this Section 3.04,

          (i)  that it will  hold  all  sums  held by it as such  agent  for the
               payment of all  payments  due in  respect of the Debt  Securities
               (whether  such sums have been paid to it by the Company or by any
               other obligor on the Debt Securities) in trust for the benefit of
               the holders of the Debt Securities;

          (ii) that it will  give  the  Trustee  prompt  written  notice  of any
               failure  by the  Company  (or by any  other  obligor  on the Debt
               Securities) to make any payment in respect of the Debt Securities
               when the same shall be due and payable; and

          (iii)that it will, at any time during the  continuance of any Event of
               Default,  upon the written request of the Trustee,  forthwith pay
               to the Trustee all sums so held in trust by such Paying Agent.

     (b) If the Company shall act as its own Paying Agent, it will, on or before
each due date of the payments due in respect of the Debt Securities,  set aside,
segregate  and  hold in  trust  for  the  benefit  of the  holders  of the  Debt
Securities  a sum  sufficient  to make such  payments so  becoming  due and will
notify the  Trustee in  writing  of any  failure to take such  action and of any
failure by the Company (or by any other  obligor under the Debt  Securities)  to
make any payment in respect of the Debt  Securities  when the same shall  become
due and payable.

     Whenever  the  Company  shall have one or more  Paying  Agents for the Debt
Securities,  it will, on or prior to each due date of the payments in respect of
the Debt  Securities,  deposit with a Paying Agent a sum  sufficient  to pay all
payments  so becoming  due,  such sum to be held in trust for the benefit of the
Persons  entitled  thereto and (unless  such Paying  Agent is the  Trustee)  the
Company shall promptly notify the Trustee in writing of its action or failure to
act.

     (c)  Anything in this Section  3.04 to the  contrary  notwithstanding,  the
Company  may, at any time,  for the  purpose of  obtaining  a  satisfaction  and
discharge with respect to the Debt Securities,  or for any other reason, pay, or
direct any Paying  Agent to pay,  to the  Trustee  all sums held in trust by the
Company or any such Paying  Agent,  such sums to be held by the Trustee upon the
same terms and conditions herein contained.

     (d)  Anything in this Section  3.04 to the  contrary  notwithstanding,  the
agreement  to hold sums in trust as provided in this  Section 3.04 is subject to
Sections 12.03 and 12.04.

                                     - 17 -


<PAGE>


     (e) The  Company  hereby  initially  appoints  the Trustee to act as paying
agent for the Debt Securities (the "Paying Agent").

SECTION 3.05     Certificate to Trustee.

     The Company will deliver to the Trustee on or before 120 days after the end
of each fiscal year, so long as Debt  Securities are  outstanding  hereunder,  a
Certificate  stating  that in the course of the  performance  by the  signers of
their duties as officers of the Company they would  normally  have  knowledge of
any default by the Company in the  performance  of any  covenants of the Company
contained herein, stating whether or not they have knowledge of any such default
and, if so, specifying each such default of which the signers have knowledge and
the nature thereof.

SECTION 3.06     Compliance with Consolidation Provisions.

     The Company will not, while any of the Debt Securities remain  outstanding,
consolidate  with,  or merge into,  any other Person,  or merge into itself,  or
sell,  convey,  transfer or otherwise dispose of all or substantially all of its
property  and assets to any other  Person  unless the  provisions  of Article XI
hereof are complied with.


                                   ARTICLE IV
                                LISTS AND REPORTS

SECTION 4.01      Securityholders' Lists.

     The  Company  covenants  and  agrees  that it will  furnish  or cause to be
furnished to the Trustee:

     (a) on each regular  record date for an Interest  Payment  Date, a list, in
such form as the Trustee may reasonably  require,  of the names and addresses of
the Securityholders of the Debt Securities as of such record date; and

     (b) at such other times as the  Trustee  may request in writing,  within 30
days after the  receipt by the  Company of any such  request,  a list of similar
form and  content as of a date not more than 15 days prior to the time such list
is  furnished;  except that no such lists need be  furnished  under this Section
4.01 so long as the Trustee is in possession  thereof by reason of its acting as
Debt Security registrar.

                                     - 18 -


<PAGE>


SECTION 4.02     Preservation and Disclosure of Lists.

     (a) The  Trustee  shall  preserve,  in as  current a form as is  reasonably
practicable,  all  information  as to the names and  addresses of the holders of
Debt  Securities  (1)  contained  in the most  recent  list  furnished  to it as
provided  in  Section  4.01  or (2)  received  by it in  the  capacity  of  Debt
Securities registrar (if so acting) hereunder.  The Trustee may destroy any list
furnished  to it as  provided  in  Section  4.01 upon  receipt  of a new list so
furnished.

     (b) In case three or more holders of Debt Securities  (hereinafter referred
to as  "applicants")  apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Debt Security for a period
of at  least  six  months  preceding  the  date of such  application,  and  such
application  states that the applicants desire to communicate with other holders
of Debt  Securities  with respect to their rights under this  Indenture or under
such Debt  Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit,  then the Trustee shall
within  five  Business  Days  after  the  receipt  of such  application,  at its
election, either:

          (i)  afford such applicants access to the information preserved at the
               time  by  the  Trustee  in  accordance  with  the  provisions  of
               subsection (a) of this Section 4.02, or

          (ii) inform such applicants as to the approximate number of holders of
               Debt  Securities   whose  names  and  addresses   appear  in  the
               information  preserved  at the time by the Trustee in  accordance
               with the  provisions of subsection  (a) of this Section 4.02, and
               as to the approximate cost of mailing to such Securityholders the
               form of proxy or other  communication,  if any, specified in such
               application.

     If the Trustee  shall elect not to afford  such  applicants  access to such
information,  the Trustee shall,  upon the written  request of such  applicants,
mail to each  Securityholder of Debt Securities whose name and address appear in
the  information  preserved  at the time by the Trustee in  accordance  with the
provisions of subsection (a) of this Section 4.02 a copy of the form of proxy or
other   communication  which  is  specified  in  such  request  with  reasonable
promptness  after a tender to the  Trustee of the  material  to be mailed and of
payment,  or provision for the payment,  of the reasonable  expenses of mailing,
unless  within  five days  after such  tender,  the  Trustee  shall mail to such
applicants and file with the Securities and Exchange Commission, if permitted or
required by applicable law, together with a copy of the material to be mailed, a
written  statement  to the effect  that,  in the  opinion of the  Trustee,  such
mailing  would be  contrary  to the best  interests  of the  holders of all Debt
Securities, as the case may be, or would be in violation of applicable law. Such
written  statement shall specify the basis of such opinion.  If said Commission,

                                    - 19 -


<PAGE>


as permitted or required by applicable law, after opportunity for a hearing upon
the objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such  objections  or if,  after the entry of an order
sustaining one or more of such  objections,  said Commission  shall find,  after
notice and  opportunity  for hearing,  that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Securityholders  with reasonable  promptness after the
entry of such order and the renewal of such tender;  otherwise the Trustee shall
be  relieved  of any  obligation  or duty to such  applicants  respecting  their
application.

     (c) Each and every holder of Debt Securities,  by receiving and holding the
same,  agrees with the Company and the  Trustee  that none of the  Company,  the
Trustee  or any  Paying  Agent  shall  be  held  accountable  by  reason  of the
disclosure of any such  information as to the names and addresses of the holders
of Debt  Securities in accordance  with the provisions of subsection (b) of this
Section 4.02,  regardless of the source from which such information was derived,
and that the  Trustee  shall not be held  accountable  by reason of mailing  any
material pursuant to a request made under said subsection (b).

SECTION 4.03     Reports.

     (a) The Company shall deliver to each holder of Debt Securities: (i) within
45  days  after  the  end  of  each  quarterly  fiscal  period,   (1)  unaudited
consolidated  financial  statements of the Company  (including balance sheet and
income statement)  covering such period and (2) an Officer's  Certificate of the
Company to the effect specified in Exhibit B hereto;  (ii) within the earlier of
(x) 90 days after the end of each  fiscal  year and (y) such  earlier  number of
days prescribed by the Securities and Exchange Commission for the filing with it
of a Form 10-K by companies subject to the informational  reporting requirements
of the  Securities  Exchange Act of 1934, as amended,  (1) audited  consolidated
financial  statements  of  the  Company  (including  balance  sheet  and  income
statement)  covering  such  fiscal  year,  (2)  the  report  of the  independent
accountants  with  respect to such  financial  statements  and (3) an  Officer's
Certificate  of the  Company  detailing  any  material  differences  between the
unaudited financial statements for such fiscal year delivered pursuant to clause
(i) (1) above and those  delivered  pursuant to this clause;  and (iii) within 7
days after the filing thereof, each Form 10-K and Form 10-Q that is prepared and
filed by the Company with the Securities  and Exchange  Commission in accordance
with the Securities Exchange Act of 1934, as amended,
if any.

     (b) So long as the holder of the Debt  Securities is InCapS Funding I, Ltd.
or a trustee  thereof,  the Company  will cause  copies of the annual  financial
statements of the Company  and/or  Affiliates  that are filed with the insurance
regulator  in  the  state  in  which  the  Company  or  any  such  Affiliate  is
incorporated  to be  delivered  to the  holder of the Debt  Securities  promptly
following their filing.

                                     - 20 -


<PAGE>


                                   ARTICLE V
                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

SECTION 5.01     Events of Default.

     The  following  events  shall be "Events of Default"  with  respect to Debt
Securities:

     (a) the  Company  defaults  in the  payment of any  interest  upon any Debt
Security when it becomes due and payable,  and continuance of such default for a
period of 30 days; or

     (b) the Company defaults in the payment of all or any part of the principal
of (or  premium,  if any,  on) any Debt  Securities  as and when the same  shall
become due and payable, whether at maturity, upon redemption, by acceleration of
maturity pursuant to this Section or otherwise; or

     (c) the Company  defaults in the  performance  of, or breaches,  any of its
covenants or agreements in Section 3.06 of this Indenture (other than a covenant
or agreement a default in whose performance or whose breach is elsewhere in this
Section  specifically dealt with), and continuance of such default or breach for
a period of 90 days after there has been given, by registered or certified mail,
to the  Company by the  Trustee or to the Company and the Trustee by the holders
of not less  than 25% in  aggregate  principal  amount of the  outstanding  Debt
Securities,  a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"  hereunder;
or

     (d) a court having  jurisdiction  in the  premises  shall enter a decree or
order for  relief in respect of the  Company  in an  involuntary  case under any
applicable  bankruptcy,  insolvency  or other  similar law now or  hereafter  in
effect,  or  appoints a  receiver,  liquidator,  assignee,  custodian,  trustee,
sequestrator  or other  similar  official of the Company or for any  substantial
part of its property, or orders the winding-up or liquidation of its affairs and
such  decree,  appointment  or order shall  remain  unstayed and in effect for a
period of 90 consecutive days; or

     (e) the  Company  shall  commence a  voluntary  case  under any  applicable
bankruptcy,  insolvency or other  similar law now or hereafter in effect,  shall
consent  to the entry of an order for  relief in an  involuntary  case under any
such law,  or shall  consent to the  appointment  of or taking  possession  by a
receiver,  liquidator,  assignee,  trustee,  custodian,  sequestrator  or  other
similar official of the Company or of any substantial  part of its property,  or
shall make any general  assignment  for the benefit of creditors,  or shall fail
generally to pay its debts as they become due.

                                     - 21 -


<PAGE>


     If an Event of  Default  specified  under  clause  (a),  (b) or (c) of this
Section 5.01 occurs and is continuing with respect to the Debt Securities, then,
in each and every such case,  either the Trustee or the holders of not less than
25% in  aggregate  principal  amount  of the Debt  Securities  then  outstanding
hereunder,  by notice in writing to the Company  (and to the Trustee if given by
Securityholders),  may declare the entire  principal of the Debt  Securities and
any  premium and  interest  accrued,  but unpaid,  thereon to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable.  If an Event of Default  specified  under clause (d) or (e) of this
Section 5.01 occurs,  then,  in each and every such case,  the entire  principal
amount of the Debt Securities and any premium and interest accrued,  but unpaid,
thereon  shall ipso facto become  immediately  due and payable  without  further
action.

     The foregoing provisions, however, are subject to the condition that if, at
any time after the  principal  of the Debt  Securities  shall have become due by
acceleration,  and before any  judgment  or decree for the payment of the moneys
due shall have been obtained or entered as hereinafter provided, (i) the Company
shall pay or shall deposit with the Trustee a sum  sufficient to pay all matured
installments  of  interest  upon all the Debt  Securities  and all  payments  in
respect of the Debt  Securities  which shall have become due  otherwise  than by
acceleration  (with interest upon all such payments,  to the extent permitted by
law) and such amount as shall be sufficient to cover reasonable  compensation to
the Trustee and each predecessor Trustee, their respective agents, attorneys and
counsel,  and all other amounts due to the Trustee  pursuant to Section 6.06, if
any,  and (ii) all  Events of  Default  under  this  Indenture,  other  than the
non-payment  of the  payments  in respect of Debt  Securities  which  shall have
become due by acceleration,  shall have been cured, waived or otherwise remedied
as provided herein, then, in each and every such case, the holders of a majority
in  aggregate  principal  amount of the Debt  Securities  then  outstanding,  by
written  notice to the Company and to the  Trustee,  may waive all  defaults and
rescind and annul such acceleration and its consequences,  but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent  default
or shall impair any right consequent thereon.

     In case the Trustee  shall have  proceeded  to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such  rescission  or  annulment  or for any other  reason or shall  have been
determined  adversely to the  Trustee,  then and in every such case the Company,
the  Trustee  and  the  holders  of  the  Debt  Securities   shall  be  restored
respectively to their several  positions and rights  hereunder,  and all rights,
remedies  and powers of the  Company,  the  Trustee  and the holders of the Debt
Securities shall continue as though no such proceeding had been taken.

                                     - 22 -



<PAGE>


SECTION 5.02     Payment of Debt Securities on Default; Suit Therefor.

     The  Company  covenants  that upon the  occurrence  of an Event of  Default
pursuant to clause (a) or (b) of Section  5.01 and upon  demand of the  Trustee,
the Company will pay to the Trustee,  for the benefit of the holders of the Debt
Securities,  the whole amount that then shall have become due and payable on all
Debt  Securities;  and, in addition  thereto,  such  further  amount as shall be
sufficient to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee,  its agents,  attorneys and counsel,  and any other
amounts due to the Trustee  under  Section  6.06. In case the Company shall fail
forthwith to pay such amounts upon such demand, the Trustee, in its own name and
as trustee of an express trust, shall be entitled and empowered to institute any
actions or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company or
any other obligor on such Debt  Securities and collect in the manner provided by
law out of the  property  of the  Company  or any  other  obligor  on such  Debt
Securities wherever situated the moneys adjudged or decreed to be payable.

     In case there shall be pending  proceedings  for the  bankruptcy or for the
reorganization  of the Company or any other obligor on the Debt Securities under
Bankruptcy  Law, or in case a receiver or trustee shall have been  appointed for
the property of the Company or such other  obligor,  or in the case of any other
similar judicial  proceedings  relative to the Company or other obligor upon the
Debt  Securities,  or to the  creditors or property of the Company or such other
obligor,  the  Trustee,  irrespective  of  whether  the  principal  of the  Debt
Securities shall then be due and payable as therein expressed or by acceleration
or otherwise and  irrespective of whether the Trustee shall have made any demand
pursuant  to the  provisions  of  this  Section  5.02,  shall  be  entitled  and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount of principal and interest  owing and unpaid
in respect of the Debt Securities and, in case of any judicial  proceedings,  to
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
reasonable  compensation to the Trustee and each predecessor  Trustee, and their
respective  agents,  attorneys and counsel,  and for  reimbursement of all other
amounts  due to the  Trustee  under  Section  6.06)  and of the  Securityholders
allowed  in such  judicial  proceedings  relative  to the  Company  or any other
obligor on the Debt  Securities,  or to the creditors or property of the Company
or such other obligor,  unless prohibited by applicable law and regulations,  to
vote on  behalf of the  holders  of the Debt  Securities  in any  election  of a
trustee or a standby  trustee in  arrangement,  reorganization,  liquidation  or
other  bankruptcy  or  insolvency   proceedings  or  Person  performing  similar
functions in  comparable  proceedings,  and to collect and receive any moneys or
other property payable or deliverable on any such claims,  and to distribute the
same after the deduction of its charges and expenses; and any receiver, assignee
or trustee in bankruptcy or  reorganization  is hereby authorized by each of the
Securityholders 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 such amounts as shall be  sufficient  to
cover reasonable compensation to the Trustee, each predecessor Trustee and their
respective  agents,  attorneys  and  counsel,  and all other  amounts due to the
Trustee under Section 6.06.

                                     - 23 -


<PAGE>


     Nothing  herein  contained  shall be construed 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
Debt  Securities 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.

     All rights of action and of asserting claims under this Indenture, or under
any of the  Debt  Securities,  may  be  enforced  by  the  Trustee  without  the
possession of any of the Debt Securities, or the production thereof at any trial
or other proceeding relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express  trust,
and any recovery of judgment shall be for the ratable  benefit of the holders of
the Debt Securities.

     In any  proceedings  brought  by the  Trustee  (and  also  any  proceedings
involving the  interpretation  of any  provision of this  Indenture to which the
Trustee  shall be a  party),  the  Trustee  shall be held to  represent  all the
holders  of the Debt  Securities,  and it  shall  not be  necessary  to make any
holders of the Debt Securities parties to any such proceedings.

SECTION 5.03     Application of Moneys Collected by Trustee.

     Any moneys  collected  by the  Trustee  shall be  applied in the  following
order,  at the date or dates fixed by the Trustee for the  distribution  of such
moneys,  upon  presentation  of the several Debt  Securities in respect of which
moneys have been collected,  and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:

     First:  To the payment of costs and expenses  incurred  by, and  reasonable
fees of, the  Trustee,  its  agents,  attorneys  and  counsel,  and of all other
amounts due to the Trustee under Section 6.06;

     Second:  To the  payment of the  amounts  then due and unpaid in respect of
Debt Securities,  in respect of which or for the benefit of which money has been
collected, ratably, without preference or priority of any kind, according to the
amounts due in respect of such Debt Securities; and

     Third: The balance, if any, to the Company.

                                     - 24 -


<PAGE>


SECTION 5.04     Proceedings by Securityholders.

     No holder of any Debt Security  shall have any right to institute any suit,
action or proceeding  for any remedy  hereunder,  unless such holder  previously
shall  have given to the  Trustee  written  notice of an Event of  Default  with
respect to the Debt  Securities  and unless the  holders of not less than 25% in
aggregate  principal amount of the Debt Securities then  outstanding  shall have
given the Trustee a written request to institute such action, suit or proceeding
and shall have  offered  to the  Trustee  such  reasonable  indemnity  as it may
require against the costs,  expenses and liabilities to be incurred thereby, and
the Trustee for 60 days after its receipt of such  notice,  request and offer of
indemnity  shall have failed to institute any such action,  suit or  proceeding;
provided,  that no holder of Debt  Securities  shall have any right to prejudice
the rights of any other holder of Debt Securities, obtain priority or preference
over any other such holder or enforce any right under this  Indenture  except in
the manner herein provided and for the equal,  ratable and common benefit of all
holders of Debt Securities.

     Notwithstanding  any other  provisions in this Indenture,  the right of any
holder of any Debt Security to receive  payment of the principal of and premium,
if any, and interest on such Debt  Security  when due, or to institute  suit for
the enforcement of any such payment,  shall not be impaired or affected  without
the consent of such holder. For the protection and enforcement of the provisions
of this Section, each and every Securityholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.

SECTION 5.05     Proceedings by Trustee.

     In case of an Event of Default,  the Trustee may in its discretion  proceed
to  protect  and  enforce  the  rights  vested in it by this  Indenture  by such
appropriate  judicial  proceedings  as the Trustee shall deem most  effectual to
protect and enforce any of such rights, either by suit in equity or by action at
law or by  proceeding  in  bankruptcy  or  otherwise,  whether for the  specific
enforcement  of any covenant or agreement  contained in this Indenture or in aid
of the exercise of any power granted in this Indenture,  or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.

                                     - 25 -


<PAGE>


SECTION 5.06      Remedies Cumulative and Continuing.

     Except as otherwise provided in Section 2.06, all powers and remedies given
by this Article V to the Trustee or to the Securityholders  shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any other powers and
remedies  available  to the  Trustee or the holders of the Debt  Securities,  by
judicial  proceedings or otherwise,  to enforce the performance or observance of
the  covenants  and   agreements   contained  in  this  Indenture  or  otherwise
established with respect to the Debt Securities, and no delay or omission of the
Trustee or of any holder of any of the Debt  Securities to exercise any right or
power  accruing upon any Event of Default  occurring and continuing as aforesaid
shall  impair any such right or power,  or shall be  construed to be a waiver of
any such default or an acquiescence  therein;  and, subject to the provisions of
Section  5.04,  every power and remedy  given by this Article V or by law to the
Trustee or to the  Securityholders  may be exercised  from time to time,  and as
often as shall be deemed expedient, by the Trustee or by the Securityholders.

SECTION 5.07     Direction of Proceedings and Waiver of Defaults by Majority  of
                 Securityholders.

     The  holders  of a  majority  in  aggregate  principal  amount  of the Debt
Securities  affected at the time outstanding  shall have the right to direct the
time,  method and place of conducting any proceeding for any remedy available to
the  Trustee,  or  exercising  any trust or power  conferred on the Trustee with
respect  to such  Debt  Securities;  provided,  however,  that  (subject  to the
provisions  of  Section  6.01) the  Trustee  shall  have the right to decline to
follow any such  direction  if the Trustee  shall  determine  that the action so
directed  would be unjustly  prejudicial  to the holders not taking part in such
direction or if the Trustee being advised by counsel  determines that the action
or proceeding so directed may not lawfully be taken or if a Responsible  Officer
of the Trustee shall  determine that the action or proceedings so directed would
involve  the  Trustee  in  personal  liability.  Prior  to  any  declaration  of
acceleration,   or  ipso  facto  acceleration,  of  the  maturity  of  the  Debt
Securities,  the holders of a majority in aggregate principal amount of the Debt
Securities  at the time  outstanding  may on behalf of the holders of all of the
Debt  Securities  waive (or modify any  previously  granted  waiver of) any past
Default or Event of Default  and its  consequences,  except a default (a) in the
payment of  principal  of or  premium,  if any,  or  interest on any of the Debt
Securities or (b) in respect of covenants or  provisions  hereof which cannot be
modified  or amended  without  the  consent of the holder of each Debt  Security
affected.  Upon any such waiver or modification  to such waiver,  the Default or
Event of Default covered thereby shall be deemed to be cured for all purposes of
this  Indenture  and the  Company,  the  Trustee  and the  holders  of the  Debt
Securities  shall be restored to their former  positions  and rights  hereunder,
respectively;  but no such waiver or modification to such waiver shall extend to
any  subsequent  or other  Default  or Event of  Default  or  impair  any  right
consequent  thereon.  Whenever any Default or Event of Default  hereunder  shall
have been waived as permitted by this Section,  said Default or Event of Default
shall for all purposes of the Debt  Securities  and this  Indenture be deemed to
have been cured and to be not continuing.

                                     - 26 -


<PAGE>


SECTION 5.08     Notice of Defaults.

     The  Trustee  shall,  within 90 days  after a  Responsible  Officer  of the
Trustee shall have actual knowledge or received written notice of the occurrence
of a default with respect to the Debt Securities,  mail to all  Securityholders,
as the  names  and  addresses  of such  holders  appear  upon the Debt  Security
Register,  notice of all defaults with respect to the Debt  Securities  known to
the  Trustee,  unless such  defaults  shall have been cured before the giving of
such  notice  (the term  "default"  for the  purpose  of this  Section is hereby
defined to be any event  specified in Section  5.01,  not  including  periods of
grace,  if any,  provided for therein);  provided,  that,  except in the case of
default in the payment of the  principal  of or premium,  if any, or interest on
any of the Debt  Securities,  the Trustee shall be protected in withholding such
notice if and so long as a  Responsible  Officer  of the  Trustee  in good faith
determines  that the  withholding  of such  notice  is in the  interests  of the
Securityholders.

SECTION 5.09     Undertaking to Pay Costs.

     All parties to this Indenture  agree,  and each holder of any Debt Security
by such holder's  acceptance  thereof  shall be deemed to have agreed,  that any
court may in its  discretion  require,  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,  the filing by any party  litigant in
such suit of an  undertaking  to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs,  including reasonable  attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Trustee,   to  any  suit   instituted  by  any   Securityholder,   or  group  of
Securityholders,  holding in the aggregate more than 10% in principal  amount of
the Debt Securities outstanding, or to any suit instituted by any Securityholder
for the  enforcement  of the payment of the principal of or premium,  if any, or
interest  on any Debt  Security  against  the Company on or after the same shall
have become due and payable.


                                   ARTICLE VI
                             CONCERNING THE TRUSTEE

SECTION 6.01     Duties and Responsibilities of Trustee.

     With  respect  to the  holders of Debt  Securities  issued  hereunder,  the
Trustee,  prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred,  undertakes to perform
such  duties  and  only  such  duties  as are  specifically  set  forth  in this
Indenture. In case an Event of Default has occurred (which has not been cured or
waived),  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 such person's own affairs.

                                     - 27 -


<PAGE>


   No  provision of this  Indenture  shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct or bad faith, except that:

     (a) prior to the  occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred:

          (i)  the duties and  obligations  of the Trustee  with  respect to the
               Debt  Securities  shall  be  determined  solely  by  the  express
               provisions of this Indenture, and the Trustee shall not be liable
               except for the  performance of such duties and  obligations  with
               respect to the Debt Securities as are  specifically  set forth in
               this Indenture,  and no implied covenants or obligations shall be
               read into this Indenture against the Trustee; and

          (ii) in the  absence  of bad  faith  on the part of the  Trustee,  the
               Trustee may conclusively  rely, as to the truth of the statements
               and the correctness of the opinions expressed  therein,  upon any
               certificates or opinions  furnished to the Trustee and conforming
               to the  requirements of this  Indenture;  but, in the case of any
               such  certificates or opinions which by any provision  hereof are
               specifically required to be furnished to the Trustee, the Trustee
               shall be under a duty to examine the same to determine whether or
               not  they  conform  on  their  face to the  requirements  of this
               Indenture;

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

     (c) the  Trustee  shall not be liable with  respect to any action  taken or
omitted to be taken by it in good faith, in accordance with the direction of the
Securityholders pursuant to Section 5.07, relating to the time, method and place
of  conducting  any  proceeding  for any remedy  available  to the  Trustee,  or
exercising any trust or power conferred upon the Trustee,  under this Indenture;
and

     (d) the Trustee shall not be charged with knowledge of any Default or Event
of Default with respect to the Debt  Securities  unless either (1) a Responsible
Officer  shall have actual  knowledge of such Default or Event of Default or (2)
written  notice of such Default or Event of Default shall have been given to the
Trustee by the  Company or any other  obligor on the Debt  Securities  or by any
holder of the Debt  Securities,  except that the Trustee shall be deemed to have
knowledge  of any Event of  Default  pursuant  to  Sections  5.01(a)  or 5.01(b)
hereof.

     None of the  provisions  contained  in this  Indenture  shall  require  the
Trustee to expend or risk its own funds or otherwise  incur  personal  financial
liability in the  performance  of any of its duties or in the exercise of any of
its rights or powers.

                                     - 28 -


<PAGE>


SECTION 6.02     Reliance on Documents, Opinions, etc.

     Except as otherwise provided in Section 6.01:

     (a) the  Trustee  may  conclusively  rely and shall be fully  protected  in
acting or refraining  from acting upon any resolution,  certificate,  statement,
instrument,  opinion,  report,  notice,  request,  consent,  order,  bond, note,
debenture or other paper or document  believed by it in good faith to be genuine
and to have been signed or presented by the proper party or parties;

     (b) any request, direction, order or demand of the Company mentioned herein
shall be  sufficiently  evidenced  by an  Officers'  Certificate  (unless  other
evidence in respect thereof be herein  specifically  prescribed);  and any Board
Resolution  may be evidenced  to the Trustee by a copy thereof  certified by the
Secretary or an Assistant Secretary of the Company;

     (c) the Trustee may consult with counsel of its selection and any advice or
Opinion of Counsel shall be full and complete  authorization  and  protection in
respect of any action  taken,  suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;

     (d) the Trustee  shall be under no obligation to exercise any of the rights
or powers vested in it by this  Indenture at the request,  order or direction of
any of the Securityholders, pursuant to the provisions of this Indenture, unless
such  Securityholders  shall have offered to the Trustee reasonable  security or
indemnity  against the costs,  expenses  and  liabilities  which may be incurred
therein or thereby;

     (e) the Trustee  shall not be liable for any action  taken or omitted by it
in good  faith and  reasonably  believed  by it to be  authorized  or within the
discretion  or rights or powers  conferred  upon it by this  Indenture;  nothing
contained herein shall, however, relieve the Trustee of the obligation, upon the
occurrence  of an Event of  Default  (which  has not been  cured or  waived)  to
exercise  such of the rights and powers vested in it by this  Indenture,  and to
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 such person's
own affairs;

     (f) the Trustee shall not be bound to make any investigation into the facts
or  matters  stated  in  any  resolution,  certificate,  statement,  instrument,
opinion,  report, notice, request,  consent,  order, approval,  bond, debenture,
coupon or other paper or document,  unless  requested in writing to do so by the
holders of a majority in  aggregate  principal  amount of the  outstanding  Debt
Securities  affected thereby;  provided,  however,  that if the payment within a
reasonable time to the Trustee of the costs,  expenses or liabilities  likely to
be incurred by it in the making of such  investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this  Indenture,  the  Trustee  may  require  reasonable  indemnity
against such expense or liability as a condition to so proceeding; and

                                     - 29 -


<PAGE>


     (g) the  Trustee  may  execute  any of the  trusts or powers  hereunder  or
perform any duties hereunder either directly or by or through agents  (including
any Authenticating Agent) or attorneys, and the Trustee shall not be responsible
for any  misconduct  or  negligence  on the part of any such  agent or  attorney
appointed by it with due care.

SECTION 6.03     No Responsibility for Recitals, etc.

     The recitals  contained  herein and in the Debt  Securities  (except in the
certificate of authentication of the Trustee or the Authenticating  Agent) shall
be  taken  as  the   statements  of  the  Company,   and  the  Trustee  and  the
Authenticating  Agent assume no responsibility  for the correctness of the same.
The  Trustee  and the  Authenticating  Agent make no  representations  as to the
validity or sufficiency of this Indenture or of the Debt Securities. The Trustee
and the Authenticating Agent shall not be accountable for the use or application
by the Company of any Debt  Securities  or the  proceeds of any Debt  Securities
authenticated  and  delivered  by the  Trustee  or the  Authenticating  Agent in
conformity with the provisions of this Indenture.


SECTION 6.04     Trustee, Authenticating Agent, Paying  Agents, Transfer  Agents
                 or Registrar May Own Debt Securities.

     The Trustee, any Authenticating Agent, any Paying Agent, any transfer agent
or any Debt Security  registrar,  in its individual or any other  capacity,  may
become  the owner or pledgee of Debt  Securities  with the same  rights it would
have if it were not Trustee,  Authenticating Agent, Paying Agent, transfer agent
or Debt Security registrar.

SECTION 6.05     Moneys to be Held in Trust.

     Subject to the  provisions  of Section  12.04,  all moneys  received by the
Trustee or any Paying Agent shall, until used or applied as herein provided,  be
held in trust for the  purpose  for which  they were  received,  but need not be
segregated  from other funds  except to the extent  required by law. The Trustee
and any Paying  Agent  shall be under no  liability  for  interest  on any money
received by it hereunder except as otherwise agreed in writing with the Company.
So long as no Event of  Default  shall  have  occurred  and be  continuing,  all
interest allowed on any such moneys,  if any, shall be paid from time to time to
the Company upon the written order of the Company, signed by the Chairman of the
Board  of  Directors,  the  President,  the  Chief  Operating  Officer,  a  Vice
President, the Treasurer or an Assistant Treasurer of the Company.

                                     - 30 -



<PAGE>


SECTION 6.06     Compensation and Expenses of Trustee.

     The Company  covenants  and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation as shall be agreed to in
writing  between the Company and the Trustee  (which shall not be limited by any
provision  of law in  regard to the  compensation  of a  trustee  of an  express
trust),  and the Company  will pay or  reimburse  the  Trustee  upon its written
request for all  documented  reasonable  expenses,  disbursements  and  advances
incurred or made by the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the reasonable expenses and
disbursements  of its counsel and of all  Persons not  regularly  in its employ)
except  any  such  expense,   disbursement  or  advance  that  arises  from  its
negligence,  willful  misconduct  or bad faith.  The Company  also  covenants to
indemnify  each of the Trustee  (including in its  individual  capacity) and any
predecessor Trustee (and its officers, agents, directors and employees) for, and
to hold it harmless  against,  any and all loss,  damage,  claim,  liability  or
expense  including  taxes (other than taxes based on the income of the Trustee),
except to the extent such loss, damage, claim, liability or expense results from
the negligence,  willful misconduct or bad faith of such indemnitee, arising out
of or in  connection  with  the  acceptance  or  administration  of this  trust,
including  the costs and  expenses  of  defending  itself  against  any claim or
liability in the premises.  The obligations of the Company under this Section to
compensate  and  indemnify  the Trustee and to pay or reimburse  the Trustee for
documented  expenses,  disbursements  and advances shall  constitute  additional
indebtedness hereunder.  Such additional indebtedness shall be secured by a lien
prior to that of the  Debt  Securities  upon  all  property  and  funds  held or
collected by the Trustee as such,  except funds held in trust for the benefit of
the holders of particular Debt Securities.

     Without  prejudice  to any other  rights  available  to the  Trustee  under
applicable  law,  when the  Trustee  incurs  expenses  or  renders  services  in
connection  with an Event of Default  specified  in clause (d) or (e) of Section
5.01,  the  expenses  (including  the  reasonable  charges  and  expenses of its
counsel)  and the  compensation  for the  services  are  intended to  constitute
expenses of  administration  under any applicable  federal or state  bankruptcy,
insolvency or other similar law.

     The provisions of this Section shall survive the  resignation or removal of
the Trustee and the defeasance or other termination of this Indenture.

                                     - 31 -


<PAGE>


SECTION 6.07     Officers' Certificate as Evidence.

     Except as  otherwise  provided in Sections  6.01 and 6.02,  whenever in the
administration  of the  provisions  of this  Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action  hereunder,  such matter  (unless other  evidence in respect
thereof be herein  specifically  prescribed)  may, in the absence of negligence,
willful  misconduct  or bad  faith on the part of the  Trustee,  be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee, and such certificate, in the absence of negligence,  willful misconduct
or bad faith on the part of the  Trustee,  shall be full  warrant to the Trustee
for any action  taken or omitted by it under the  provisions  of this  Indenture
upon the faith thereof.

SECTION 6.08     Eligibility of Trustee.

     The Trustee hereunder shall at all times be a U.S. Person that is a banking
corporation or national association  organized and doing business under the laws
of the  United  States of America or any state  thereof  or of the  District  of
Columbia and  authorized  under such laws to exercise  corporate  trust  powers,
having a combined  capital and surplus of at least fifty  million  U.S.  dollars
($50,000,000)  and subject to supervision or examination by federal,  state,  or
District of Columbia  authority.  If such  corporation  or national  association
publishes  reports of  condition  at least  annually,  pursuant to law or to the
requirements of the aforesaid  supervising or examining authority,  then for the
purposes of this Section the combined capital and surplus of such corporation or
national  association  shall be deemed to be its combined capital and surplus as
set forth in its most recent records of condition so published.

     The Company may not, nor may any Person directly or indirectly controlling,
controlled  by, or under  common  control  with the  Company,  serve as Trustee,
notwithstanding that such corporation or national association shall be otherwise
eligible and qualified under this Article.

     In case at any time the Trustee  shall  cease to be eligible in  accordance
with the provisions of this Section, the Trustee shall resign immediately in the
manner and with the effect specified in Section 6.09.

     If the Trustee has or shall acquire any  "conflicting  interest" within the
meaning of Section  310(b) of the Trust  Indenture Act, the Trustee shall either
eliminate such interest or resign,  to the extent and in the manner provided by,
and subject to, this Indenture.

                                     - 32 -


<PAGE>


SECTION 6.09     Resignation or Removal of Trustee.

     (a) The Trustee, or any trustee or trustees hereafter appointed, may at any
time resign by giving written  notice of such  resignation to the Company and by
mailing notice  thereof,  at the Company's  expense,  to the holders of the Debt
Securities  at  their  addresses  as they  shall  appear  on the  Debt  Security
Register. Upon receiving such notice of resignation,  the Company shall promptly
appoint a successor  trustee or trustees by written  instrument,  in  duplicate,
executed by order of its Board of Directors,  one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor Trustee.  If
no successor Trustee shall have been so appointed and have accepted  appointment
within 30 days after the mailing of such notice of  resignation  to the affected
Securityholders,  the  resigning  Trustee may  petition  any court of  competent
jurisdiction for the appointment of a successor  Trustee,  or any Securityholder
who has been a bona fide  holder of a Debt  Security or Debt  Securities  for at
least six months may,  subject to the  provisions  of Section 5.09, on behalf of
himself or herself and all others  similarly  situated,  petition any such court
for the appointment of a successor Trustee. Such court may thereupon, after such
notice,  if any,  as it may deem  proper  and  prescribe,  appoint  a  successor
Trustee.

     (b) In case at any time any of the following shall occur:

          (i)  the Trustee shall fail to comply with the  provisions of the last
               paragraph of Section 6.08 after written  request  therefor by the
               Company or by any  Securityholder who has been a bona fide holder
               of a Debt Security or Debt Securities for at least six months;

          (ii) the Trustee  shall cease to be  eligible in  accordance  with the
               provisions of Section 6.08 and shall fail to resign after written
               request therefor by the Company or by any such Securityholder; or

          (iii)the  Trustee  shall  become  incapable  of  acting,  or  shall be
               adjudged  bankrupt or insolvent,  or a receiver of the Trustee or
               of its property  shall be appointed,  or any public officer shall
               take  charge or control  of the  Trustee  or of its  property  or
               affairs  for  the  purpose  of  rehabilitation,  conservation  or
               liquidation,  then, in any such case,  the Company may remove the
               Trustee and appoint a successor Trustee by written instrument, in
               duplicate,  executed by order of the Board of Directors, one copy
               of which  instrument shall be delivered to the Trustee so removed
               and  one  copy  to the  successor  Trustee,  or,  subject  to the
               provisions of Section  5.09,  if no successor  Trustee shall have
               been so appointed and have accepted appointment within 30 days of
               the  occurrence  of  any  of  (i),  (ii)  or  (iii)  above,   any
               Securityholder who has been a bona fide holder of a Debt Security
               or Debt  Securities  for at least six  months  may,  on behalf of
               himself or herself and all others  similarly  situated,  petition
               any  court  of  competent  jurisdiction  for the  removal  of the
               Trustee and the  appointment of a successor  Trustee.  Such court
               may thereupon,  after such notice,  if any, as it may deem proper
               and  prescribe,  remove  the  Trustee  and  appoint  a  successor
               Trustee.

                                     - 33 -


<PAGE>


     (c) Upon prior written  notice to the Company and the Trustee,  the holders
of a majority in aggregate  principal  amount of the Debt Securities at the time
outstanding may at any time remove the Trustee and nominate a successor Trustee,
which shall be deemed appointed as successor  Trustee unless within ten Business
Days after such nomination the Company objects thereto,  in which case or in the
case of a failure by such holders to nominate a successor  Trustee,  the Trustee
so removed or any Securityholder, upon the terms and conditions and otherwise as
in  subsection  (a) of  this  Section,  may  petition  any  court  of  competent
jurisdiction for an appointment of a successor.

     (d)  Any  resignation  or  removal  of the  Trustee  and  appointment  of a
successor Trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor Trustee as provided in
Section 6.10.

SECTION 6.10     Acceptance by Successor Trustee.

     Any successor  Trustee appointed as provided in Section 6.09 shall execute,
acknowledge  and  deliver  to the  Company  and to its  predecessor  Trustee  an
indenture  supplemental  hereto which shall contain such  provisions as shall be
deemed necessary or desirable to confirm that all of the rights,  powers, trusts
and duties of the retiring Trustee shall be vested in the successor Trustee, and
thereupon  the  resignation  or removal of the  retiring  Trustee  shall  become
effective  and  such  successor  Trustee,  without  any  further  act,  deed  or
conveyance,  shall  become  vested  with  all the  rights,  powers,  duties  and
obligations  with respect to the Debt Securities of its  predecessor  hereunder,
with like effect as if originally named as Trustee herein; but, nevertheless, on
the written  request of the  Company or of the  successor  Trustee,  the Trustee
ceasing to act shall,  upon  payment of the amounts  then due it pursuant to the
provisions of Section 6.06,  execute and deliver an instrument  transferring  to
such  successor  Trustee  all the rights and powers of the Trustee so ceasing to
act and shall duly assign,  transfer and deliver to such  successor  Trustee all
property and money held by such retiring Trustee hereunder.  Upon request of any
such  successor  Trustee,  the Company shall execute any and all  instruments in
writing for more fully and certainly vesting in and confirming to such successor
Trustee  all  such  rights  and  powers.  Any  Trustee  ceasing  to  act  shall,
nevertheless, retain a lien upon all property or funds held or collected by such
Trustee to secure any amounts then due it pursuant to the  provisions of Section
6.06.

     No successor  Trustee shall accept  appointment as provided in this Section
unless at the time of such acceptance  such successor  Trustee shall be eligible
and qualified under the provisions of Section 6.08.

     In no event shall a retiring Trustee be liable for the acts or omissions of
any successor Trustee hereunder.

                                     - 34 -


<PAGE>


  Upon  acceptance of appointment by a successor  Trustee as provided in this
Section,  the  Company  shall  mail  notice of the  succession  of such  Trustee
hereunder  to the holders of Debt  Securities  at their  addresses as they shall
appear on the Debt Security  Register.  If the Company fails to mail such notice
within ten Business Days after the  acceptance of  appointment  by the successor
Trustee,  the  successor  Trustee  shall  cause such  notice to be mailed at the
expense of the Company.

SECTION 6.11     Succession by Merger, etc.

     Any  corporation  into which the Trustee may be merged or converted or with
which it may be  consolidated,  or any  corporation  resulting  from any merger,
conversion  or  consolidation  to which  the  Trustee  shall be a party,  or any
corporation  succeeding  to all or  substantially  all  of the  corporate  trust
business of the Trustee, shall be the successor of the Trustee hereunder 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 shall be otherwise eligible
and qualified under this Article.

     In case at the time such  successor  to the  Trustee  shall  succeed to the
trusts  created by this  Indenture  any of the Debt  Securities  shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor  Trustee, and deliver such Debt
Securities so authenticated; and in case at that time any of the Debt Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Debt Securities  either in the name of any predecessor  hereunder or in the
name of the successor  Trustee;  and in all such cases such  certificates  shall
have the full  force  which it is  anywhere  in the Debt  Securities  or in this
Indenture  provided that the  certificate  of the Trustee shall have;  provided,
however,  that the  right to adopt  the  certificate  of  authentication  of any
predecessor  Trustee  or  authenticate  Debt  Securities  in  the  name  of  any
predecessor  Trustee  shall apply only to its successor or successors by merger,
conversion or consolidation.

SECTION 6.12     Authenticating Agents.

     There may be one or more  Authenticating  Agents  appointed  by the Trustee
upon the request of the  Company  with power to act on its behalf and subject to
its direction in the  authentication and delivery of Debt Securities issued upon
exchange  or  registration  of  transfer  thereof  as fully to all  intents  and
purposes as though any such Authenticating  Agent had been expressly  authorized
to authenticate and deliver Debt Securities; provided, however, that the Trustee
shall not have any  liability  to the Company for any acts or  omissions  of the
Authenticating  Agent with  respect to the  authentication  and delivery of Debt
Securities.  Any such  Authenticating  Agent shall at all times be a corporation
organized and doing business under the laws of the United States or of any state
thereof or of the  District  of  Columbia  authorized  under such laws to act as
Authenticating  Agent,  having  a  combined  capital  and  surplus  of at  least

                                     - 35 -


<PAGE>


$50,000,000 and being subject to supervision or examination by federal, state or
District  of  Columbia  authority.  If such  corporation  publishes  reports  of
condition  at  least  annually  pursuant  to  law or the  requirements  of  such
authority,  then for the  purposes  of this  Section  the  combined  capital and
surplus  of such  corporation  shall be deemed to be its  combined  capital  and
surplus as set forth in its most recent report of condition so published.  If at
any time an  Authenticating  Agent shall cease to be eligible in accordance with
the  provisions of this Section,  it shall resign  immediately in the manner and
with the effect herein specified in this Section.

     Any  corporation  into  which  any  Authenticating  Agent  may be merged or
converted or with which it may be  consolidated,  or any  corporation  resulting
from any merger,  consolidation or conversion to which any Authenticating  Agent
shall be a party, or any corporation  succeeding to all or substantially  all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such  Authenticating  Agent  hereunder,  if  such  successor  corporation  is
otherwise  eligible  under this Section  without the  execution or filing of any
paper  or  any  further  act  on  the  part  of  the  parties   hereto  or  such
Authenticating Agent.

     Any Authenticating Agent may at any time resign by giving written notice of
resignation  to the  Trustee  and to the  Company.  The  Trustee may at any time
terminate  the  agency of any  Authenticating  Agent  with  respect  to the Debt
Securities by giving written notice of termination to such Authenticating  Agent
and to the Company.  Upon  receiving such a notice of resignation or upon such a
termination,  or in case at any time any Authenticating  Agent shall cease to be
eligible  under this  Section,  the  Trustee  may,  and upon the  request of the
Company shall, promptly appoint a successor  Authenticating Agent eligible under
this Section,  shall give written notice of such  appointment to the Company and
shall mail notice of such  appointment to all holders of Debt  Securities as the
names and addresses of such holders  appear on the Debt Security  Register.  Any
successor  Authenticating  Agent, upon acceptance of its appointment  hereunder,
shall become vested with all rights,  powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent herein.

     The  Company  agrees to pay to any  Authenticating  Agent from time to time
reasonable compensation for its services. Any Authenticating Agent shall have no
responsibility  or liability  for any action  taken by it as such in  accordance
with the directions of the Trustee.

                                     - 36 -


<PAGE>


                                  ARTICLE VII
                         CONCERNING THE SECURITYHOLDERS

SECTION 7.01     Action by Securityholders.

     Whenever in this  Indenture it is provided  that the holders of a specified
percentage in aggregate  principal  amount of the Debt  Securities  may take any
action (including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action),  the fact that at the time
of taking any such action the holders of such specified  percentage  have joined
therein may be evidenced (a) by any  instrument or any number of  instruments of
similar tenor  executed by such  Securityholders  in person or by agent or proxy
appointed in writing,  or (b) by the record of such  holders of Debt  Securities
voting in favor thereof at any meeting of such  Securityholders  duly called and
held in accordance  with the provisions of Article VIII, or (c) by a combination
of such  instrument or instruments and any such record of such a meeting of such
Securityholders, or (d) by any other method the Trustee deems satisfactory.

     If the Company shall solicit from the Securityholders any request,  demand,
authorization,  direction, notice, consent, waiver or other action or revocation
of the same,  the Company  may,  at its option,  as  evidenced  by an  Officers'
Certificate,  fix in  advance  a record  date for such Debt  Securities  for the
determination  of  Securityholders   entitled  to  give  such  request,  demand,
authorization,  direction, notice, consent, waiver or other action or revocation
of the same, but the Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization,  direction, notice, consent,
waiver or other  action or  revocation  of the same may be given before or after
the record date, but only the Securityholders of record at the close of business
on the record  date shall be deemed to be  Securityholders  for the  purposes of
determining whether  Securityholders of the requisite  proportion of outstanding
Debt Securities have authorized or agreed or consented to such request,  demand,
authorization,  direction, notice, consent, waiver or other action or revocation
of the same,  and for that  purpose the  outstanding  Debt  Securities  shall be
computed as of the record date; provided,  however,  that no such authorization,
agreement or consent by such  Securityholders on the record date shall be deemed
effective  unless it shall become  effective  pursuant to the provisions of this
Indenture not later than six months after the record date.

SECTION 7.02     Proof of Execution by Securityholders.

     Subject to the  provisions of Sections  6.01,  6.02 and 8.05,  proof of the
execution of any instrument by a Securityholder or such  Securityholder's  agent
or proxy shall be sufficient if made in accordance  with such  reasonable  rules
and  regulations  as may be prescribed by the Trustee or in such manner as shall
be satisfactory to the Trustee. The ownership of Debt Securities shall be proved
by  the  Debt  Security  Register  or by a  certificate  of  the  Debt  Security
registrar.  The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.

                                     - 37 -


<PAGE>


     The record of any  Securityholders'  meeting  shall be proved in the manner
provided in Section 8.06.

SECTION 7.03     Who Are Deemed Absolute Owners.

     Prior to due presentment for registration of transfer of any Debt Security,
the Company,  the Trustee,  any  Authenticating  Agent,  any Paying  Agent,  any
transfer agent and any Debt Security registrar may deem the Person in whose name
such Debt Security  shall be registered  upon the Debt Security  Register to be,
and may treat such Person as, the absolute owner of such Debt Security  (whether
or not such Debt Security shall be overdue) for the purpose of receiving payment
of or on account of the  principal of and premium,  if any, and interest on such
Debt Security and for all other purposes;  and none of the Company, the Trustee,
any  Authenticating  Agent,  any Paying  Agent,  any transfer  agent or any Debt
Security  registrar  shall be affected by any notice to the  contrary.  All such
payments  so made to any holder for the time being or upon such  holder's  order
shall be valid,  and,  to the  extent of the sum or sums so paid,  effectual  to
satisfy  and  discharge  the  liability  for moneys  payable  upon any such Debt
Security.

SECTION 7.04     Debt Securities Owned by Company Deemed Not Outstanding.

     In  determining  whether the holders of the requisite  aggregate  principal
amount of Debt  Securities  have concurred in any  direction,  consent or waiver
under this  Indenture,  Debt  Securities  which are owned by the  Company or any
other  obligor on the Debt  Securities  or by any Person  directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Debt  Securities  shall be  disregarded  and
deemed  not  to be  outstanding  for  the  purpose  of any  such  determination,
provided,  that for the  purposes of  determining  whether the Trustee  shall be
protected  in  relying  on any such  direction,  consent  or  waiver,  only Debt
Securities  which a  Responsible  Officer of the Trustee  actually  knows are so
owned shall be so disregarded.  Debt Securities so owned which have been pledged
in good faith may be regarded as outstanding for the purposes of this Section if
the pledgee  shall  establish to the  satisfaction  of the Trustee the pledgee's
right to vote such Debt  Securities  and that the  pledgee is not the Company or
any  such  other  obligor  or  Person  directly  or  indirectly  controlling  or
controlled by or under direct or indirect common control with the Company or any
such other obligor.  In the case of a dispute as to such right,  any decision by
the Trustee  taken upon the advice of counsel  shall be full  protection  to the
Trustee.

                                     - 38 -


<PAGE>


SECTION 7.05     Revocation of Consents; Future Holders Bound.

     At any time prior to (but not  after) the  evidencing  to the  Trustee,  as
provided  in Section  7.01,  of the  taking of any action by the  holders of the
percentage in aggregate  principal  amount of the Debt  Securities  specified in
this  Indenture in  connection  with such action,  any holder (in cases where no
record  date has been set  pursuant  to  Section  7.01) or any  holder  as of an
applicable  record date (in cases  where a record date has been set  pursuant to
Section  7.01) of a Debt  Security (or any Debt  Security  issued in whole or in
part in exchange or  substitution  therefor) the serial number of which is shown
by the evidence to be included in the Debt  Securities the holders of which have
consented to such action may, by filing  written  notice with the Trustee at the
Principal Office of the Trustee and upon proof of holding as provided in Section
7.02,  revoke such action so far as concerns  such Debt  Security  (or so far as
concerns the principal  amount  represented by any exchanged or substituted Debt
Security).  Except as aforesaid  any such action taken by the holder of any Debt
Security  shall be  conclusive  and binding upon such holder and upon all future
holders and owners of such Debt  Security,  and of any Debt  Security  issued in
exchange or  substitution  therefor  or on  registration  of  transfer  thereof,
irrespective  of whether or not any notation in regard thereto is made upon such
Debt Security or any Debt Security issued in exchange or substitution therefor.


                                  ARTICLE VIII
                            SECURITYHOLDERS' MEETINGS

SECTION 8.01     Purposes of Meetings.

     A  meeting  of  Securityholders  may be called at any time and from time to
time  pursuant to the  provisions  of this Article VIII for any of the following
purposes:

     (a) to give any  notice to the  Company or to the  Trustee,  or to give any
directions to the Trustee, or to consent to the waiving of any default hereunder
and its  consequences,  or to take any other  action  authorized  to be taken by
Securityholders pursuant to any of the provisions of Article V;

     (b) to remove the Trustee and nominate a successor  trustee pursuant to the
provisions of Article VI;

     (c) to consent to the execution of an indenture or indentures  supplemental
hereto pursuant to the provisions of Section 9.02; or

     (d) to take any other action  authorized to be taken by or on behalf of the
holders of any  specified  aggregate  principal  amount of such Debt  Securities
under any other provision of this Indenture or under applicable law.

                                     - 39 -


<PAGE>


SECTION 8.02     Call of Meetings by Trustee.

     The Trustee may at any time call a meeting of  Securityholders  to take any
action  specified in Section  8.01, to be held at such time and at such place in
The City of New York, the Borough of Manhattan, or Wilmington,  Delaware, as the
Trustee shall determine. Notice of every meeting of the Securityholders, setting
forth the time and the place of such  meeting  and in  general  terms the action
proposed  to be taken  at such  meeting,  shall be  mailed  to  holders  of Debt
Securities  affected  at  their  addresses  as they  shall  appear  on the  Debt
Securities Register.  Such notice shall be mailed not less than 20 nor more than
180 days prior to the date fixed for the meeting.

SECTION 8.03     Call of Meetings by Company or Securityholders.

     In case at any time the  Company  pursuant  to a Board  Resolution,  or the
holders of at least 10% in aggregate principal amount of the Debt Securities, as
the case may be, then  outstanding,  shall have  requested the Trustee to call a
meeting of  Securityholders,  by written  request  setting  forth in  reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have  mailed the  notice of such  meeting  within 20 days after  receipt of such
request, then the Company or such Securityholders may determine the time and the
place in Austin,  Texas for such  meeting and may call such  meeting to take any
action  authorized  in Section 8.01,  by mailing  notice  thereof as provided in
Section 8.02.

SECTION 8.04     Qualifications for Voting.

     To be entitled to vote at any meeting of  Securityholders a Person shall be
(a) a holder  of one or more Debt  Securities  or (b) a Person  appointed  by an
instrument in writing as proxy by a holder of one or more Debt  Securities.  The
only  Persons  who shall be entitled to be present or to speak at any meeting of
Securityholders  shall be the Persons entitled to vote at such meeting and their
counsel  and  any  representatives  of the  Trustee  and  its  counsel  and  any
representatives of the Company and its counsel.

SECTION 8.05     Regulations.

     Notwithstanding  any other  provisions of this  Indenture,  the Trustee may
make such  reasonable  regulations  as it may deem  advisable for any meeting of
Securityholders, in regard to proof of the holding of Debt Securities and of the
appointment  of  proxies,  and  in  regard  to the  appointment  and  duties  of
inspectors of votes, the submission and examination of proxies, certificates and
other  evidence  of the right to vote,  and such other  matters  concerning  the
conduct of the meeting as it shall deem appropriate.

                                     - 40 -


<PAGE>


     The  Trustee  shall,  by an  instrument  in  writing,  appoint a  temporary
chairman  of the  meeting,  unless the  meeting  shall  have been  called by the
Company or by  Securityholders  as provided in Section  8.03,  in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary  chairman.  A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote at the meeting.

     Subject to the  provisions  of Section  7.04, at any meeting each holder of
Debt  Securities  with  respect  to which  such  meeting  is being held or proxy
therefor shall be entitled to one vote for each $1,000  principal amount of Debt
Securities held or represented by such holder;  provided,  however, that no vote
shall  be cast or  counted  at any  meeting  in  respect  of any  Debt  Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding.  The chairman of the meeting shall have no right to vote other than
by virtue of Debt  Securities held by such chairman or instruments in writing as
aforesaid  duly  designating  such  chairman  as the Person to vote on behalf of
other  Securityholders.  Any meeting of Securityholders  duly called pursuant to
the  provisions of Section 8.02 or 8.03 may be adjourned  from time to time by a
majority of those present, whether or not constituting a quorum, and the meeting
may be held as so adjourned without further notice.

SECTION 8.06     Voting.

     The vote upon any  resolution  submitted  to any meeting of holders of Debt
Securities  with respect to which such meeting is being held shall be by written
ballots on which shall be subscribed  the signatures of such holders or of their
representatives by proxy and the serial number or numbers of the Debt Securities
held or represented by them. The permanent chairman of the meeting shall appoint
two  inspectors  of votes who shall  count all votes cast at the  meeting for or
against any  resolution  and who shall make and file with the  secretary  of the
meeting their  verified  written  reports in triplicate of all votes cast at the
meeting.   A  record  in  duplicate  of  the  proceedings  of  each  meeting  of
Securityholders  shall be  prepared  by the  secretary  of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more Persons having
knowledge  of the facts  setting  forth a copy of the notice of the  meeting and
showing  that said  notice was mailed as provided  in Section  8.02.  The record
shall  show the  serial  numbers  of the Debt  Securities  voting in favor of or
against  any  resolution.  The  record  shall  be  signed  and  verified  by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates  shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee,  the latter to have attached thereto the ballots voted
at the meeting.

                                     - 41 -


<PAGE>


     Any record so signed  and  verified  shall be  conclusive  evidence  of the
matters therein stated.

SECTION 8.07     Quorum; Actions.

     The Persons  entitled to vote a majority in aggregate  principal  amount of
the Debt Securities then outstanding  shall constitute a quorum for a meeting of
Securityholders;  provided,  however,  that if any action is to be taken at such
meeting  with  respect  to  a  consent,   waiver,   request,   demand,   notice,
authorization,  direction  or other  action which may be given by the holders of
not less than a specified  percentage in aggregate  principal amount of the Debt
Securities then outstanding,  the Persons holding or representing such specified
percentage in aggregate principal amount of the Debt Securities then outstanding
will  constitute a quorum.  In the absence of a quorum  within 30 minutes of the
time  appointed  for any such  meeting,  the meeting  shall,  if convened at the
request of Securityholders,  be dissolved. In any other case, the meeting may be
adjourned  for a period of not less than 10 days as  determined by the permanent
chairman of the meeting prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned  for a period of not less than 10 days as  determined by the permanent
chairman of the meeting  prior to the  adjournment  of such  adjourned  meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 8.02, except that such notice need be given only once not less than five
days  prior to the date on which the  meeting  is  scheduled  to be  reconvened.
Notice of the  reconvening  of an adjourned  meeting  shall state  expressly the
percentage,  as provided  above, of the aggregate  principal  amount of the Debt
Securities then outstanding which shall constitute a quorum.

     Except as limited by the proviso in the first  paragraph  of Section  9.02,
any resolution  presented to a meeting or adjourned  meeting duly  reconvened at
which a quorum is present as aforesaid may be adopted by the affirmative vote of
the holders of a majority in aggregate  principal  amount of the Debt Securities
then outstanding;  provided,  however, that, except as limited by the proviso in
the first paragraph of Section 9.02, any resolution with respect to any consent,
waiver, request, demand, notice,  authorization,  direction or other action that
this Indenture expressly provides may be given by the holders of not less than a
specified percentage in outstanding  principal amount of the Debt Securities may
be adopted at a meeting or an adjourned  meeting duly  reconvened and at which a
quorum is present as aforesaid  only by the  affirmative  vote of the holders of
not less than such  specified  percentage in aggregate  principal  amount of the
Debt Securities then outstanding.

     Any  resolution  passed or decision taken at any meeting of holders of Debt
Securities duly held in accordance with this Section shall be binding on all the
Securityholders, whether or not present or represented at the meeting.

                                     - 42 -


<PAGE>


                                   ARTICLE IX
                             SUPPLEMENTAL INDENTURES

SECTION 9.01     Supplemental Indentures without Consent of Securityholders.

     The Company,  when  authorized by a Board  Resolution,  and the Trustee may
from  time  to time  and at any  time  enter  into an  indenture  or  indentures
supplemental hereto, without the consent of the Securityholders, for one or more
of the following purposes:

     (a) to evidence the succession of another  corporation  to the Company,  or
successive  successions,  and the assumption by the successor corporation of the
covenants,  agreements and  obligations  of the Company,  pursuant to Article XI
hereof;

     (b) to add  to  the  covenants  of  the  Company  such  further  covenants,
restrictions  or conditions for the protection of the holders of Debt Securities
as the Board of Directors shall consider to be for the protection of the holders
of such Debt  Securities,  and to make the  occurrence,  or the  occurrence  and
continuance,  of a Default in any of such additional covenants,  restrictions or
conditions a Default or an Event of Default permitting the enforcement of all or
any of the  several  remedies  provided in this  Indenture  as herein set forth;
provided, however, that in respect of any such additional covenant,  restriction
or condition such supplemental  indenture may provide for a particular period of
grace after Default  (which period may be shorter or longer than that allowed in
the case of other  Defaults)  or may provide for an immediate  enforcement  upon
such  Default  or may limit the  remedies  available  to the  Trustee  upon such
default;

     (c) to cure  any  ambiguity  or to  correct  or  supplement  any  provision
contained  herein or in any  supplemental  indenture  which may be  defective or
inconsistent  with any other provision  contained  herein or in any supplemental
indenture,  or to make such other  provisions  in regard to matters or questions
arising under this Indenture, provided, that any such action shall not adversely
affect the interests of the holders of the Debt Securities then outstanding;

     (d) to add to,  delete  from,  or  revise  the  terms  of Debt  Securities,
including,  without  limitation,  any terms relating to the issuance,  exchange,
registration  or transfer of Debt  Securities  as required by Section  2.05 (for
purposes of assuring that no  registration  of Debt Securities is required under
the  Securities Act of 1933, as amended),  provided,  that any such action shall
not adversely  affect the  interests of the  holders of the Debt Securities then
outstanding;

                                     - 43 -


<PAGE>


     (e) to evidence and provide for the acceptance of appointment  hereunder by
a  successor  Trustee  and to add to or  change  any of the  provisions  of this
Indenture as shall be necessary to provide for or facilitate the  administration
of the trusts  hereunder by more than one Trustee,  pursuant to the requirements
of Section 6.10;

     (f) to make any change  (other than as elsewhere  provided in this Section)
that does not adversely affect the rights of any  Securityholder in any material
respect; or

     (g) to provide  for the  issuance of and  establish  the form and terms and
conditions of the Debt Securities,  to establish the form of any  certifications
required to be  furnished  pursuant to the terms of this  Indenture  or the Debt
Securities, or to add to the rights of the holders of Debt Securities.

     The Trustee is hereby  authorized to join with the Company in the execution
of any such supplemental  indenture,  to make any further appropriate agreements
and  stipulations  which may be therein  contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated  to,  but may in its  discretion,  enter  into any  such  supplemental
indenture  which affects the Trustee's  own rights,  duties or immunities  under
this Indenture or otherwise.

     Any supplemental indenture authorized by the provisions of this Section may
be executed by the Company and the Trustee without the consent of the holders of
any of the Debt Securities at the time outstanding,  notwithstanding  any of the
provisions of Section 9.02.

SECTION 9.02     Supplemental Indentures with Consent of Securityholders.

     With the consent  (evidenced as provided in Section 7.01) of the holders of
a majority in  aggregate  principal  amount of the Debt  Securities  at the time
outstanding  affected  by  such  supplemental   indenture,   the  Company,  when
authorized by a Board  Resolution,  and the Trustee may from time to time and at
any time enter  into an  indenture  or  indentures  supplemental  hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the  provisions  of this  Indenture  or of any  supplemental  indenture or of
modifying  in any  manner  the  rights of the  holders  of the Debt  Securities;
provided,  however,  that no such  supplemental  indenture  shall,  without  the
consent of the  holders of each Debt  Security  then  outstanding  and  affected
thereby,  (i)  change  the  Maturity  Date of any Debt  Security,  or reduce the
principal amount thereof or any premium  thereon,  or reduce the rate (or manner
of calculation  of the rate) or extend the time of payment of interest  thereon,
or reduce  (other than as a result of the maturity or earlier  redemption of any
such Debt Security in accordance  with the terms of this Indenture and such Debt
Security) or increase the aggregate  principal  amount of Debt  Securities  then
outstanding,  or change any of the redemption provisions,  or make the principal
thereof or any interest or premium thereon payable in any coin or currency other
than United States Dollars,  or impair or affect the right of any Securityholder
to institute suit for payment thereof,  or (ii) reduce the aforesaid  percentage
of Debt  Securities  the  holders of which are  required  to consent to any such
supplemental indenture.

                                     - 44 -


<PAGE>


     Upon  the  request  of  the  Company  accompanied  by  a  Board  Resolution
authorizing  the  execution  of any such  supplemental  indenture,  and upon the
filing  with the  Trustee  of  evidence  of the  consent of  Securityholders  as
aforesaid,  the  Trustee  shall join with the Company in the  execution  of such
supplemental  indenture unless such supplemental indenture affects the Trustee's
own rights,  duties or immunities  under this  Indenture or otherwise,  in which
case the Trustee may in its  discretion,  but shall not be  obligated  to, enter
into such supplemental indenture.

     Promptly  after  the  execution  by the  Company  and  the  Trustee  of any
supplemental  indenture pursuant to the provisions of this Section,  the Trustee
shall transmit by mail, first class postage prepaid,  a notice,  prepared by the
Company,  setting  forth in general  terms the  substance  of such  supplemental
indenture,  to the  Securityholders as their names and addresses appear upon the
Debt Security  Register.  Any failure of the Trustee to mail such notice, or any
defect therein,  shall not, however, in any way impair or affect the validity of
any such supplemental indenture.

     It shall not be necessary for the consent of the Securityholders under this
Section to approve the particular form of any proposed  supplemental  indenture,
but it shall be sufficient if such consent shall approve the substance thereof.

SECTION 9.03     Effect of Supplemental Indentures.

     Upon the execution of any supplemental indenture pursuant to the provisions
of this Article IX, this Indenture shall be, and shall be deemed to be, modified
and amended in accordance  therewith and the respective  rights,  limitations of
rights, obligations,  duties and immunities under this Indenture of the Trustee,
the Company and the holders of Debt Securities  shall  thereafter be determined,
exercised and enforced  hereunder subject in all respects to such  modifications
and  amendments  and all the  terms  and  conditions  of any  such  supplemental
indenture  shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.

SECTION 9.04     Notation on Debt Securities.

     Debt  Securities  authenticated  and  delivered  after the execution of any
supplemental  indenture pursuant to the provisions of this Article IX may bear a
notation as to any matter provided for in such  supplemental  indenture.  If the
Company or the Trustee shall so determine, new Debt Securities so modified as to
conform,  in the  opinion  of the  Board of  Directors  of the  Company,  to any
modification of this Indenture contained in any such supplemental  indenture may
be prepared  and executed by the  Company,  authenticated  by the Trustee or the
Authenticating  Agent and  delivered  in exchange for the Debt  Securities  then
outstanding.

                                     - 45 -


<PAGE>


SECTION 9.05    Evidence of Compliance of Supplemental Indenture to be Furnished
                to Trustee.

     The Trustee, subject to the provisions of Sections 6.01 and 6.02, shall, in
addition  to the  documents  required  by Section  14.06,  receive an  Officers'
Certificate  as conclusive  evidence that any  supplemental  indenture  executed
pursuant hereto  complies with the  requirements of this Article IX. The Trustee
shall  also  receive an Opinion  of  Counsel  as  conclusive  evidence  that any
supplemental  indenture  executed  pursuant to this Article IX is  authorized or
permitted  by,  and  conforms  to,  the terms of this  Article IX and that it is
proper for the Trustee  under the  provisions  of this Article IX to join in the
execution thereof.


                                   ARTICLE X
                            REDEMPTION OF SECURITIES

SECTION 10.01     Optional Redemption.

     The Company shall have the right to redeem the Debt Securities, in whole or
(provided  that all  accrued  and  unpaid  interest  has  been  paid on all Debt
Securities for all Interest  Periods  terminating on or prior to such date) from
time to time in part,  on any  Interest  Payment  Date on or after May 23,  2008
(each, an "Optional Redemption Date"), at the Optional Redemption Price.

SECTION 10.02     Notice of Redemption; Selection of Debt Securities.

     In case the Company  shall  desire to exercise the right to redeem all, or,
as the case may be,  any part of the Debt  Securities,  it shall  fix a date for
redemption  and shall mail,  or cause the Trustee to mail (at the expense of the
Company),  a notice  of such  redemption  at least 30 and not more  than 60 days
prior to the date fixed for  redemption to the holders of Debt  Securities so to
be redeemed as a whole or in part at their last  addresses as the same appear on
the Debt  Security  Register.  Such  mailing  shall be by first class mail.  The
notice if mailed in the manner herein provided shall be conclusively presumed to
have been duly given,  whether or not the holder  receives  such notice.  In any
case,  failure  to give such  notice by mail or any  defect in the notice to the
holder of any Debt  Security  designated  for  redemption  as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Debt Security.

                                     - 46 -


<PAGE>


     Each such notice of redemption  shall specify the CUSIP number,  if any, of
the Debt Securities to be redeemed, the date fixed for redemption, the price (or
manner of calculation of the price) at which Debt Securities are to be redeemed,
the place or places of payment,  that payment will be made upon presentation and
surrender of such Debt  Securities,  that interest accrued to the date fixed for
redemption will be paid as specified in said notice,  and that on and after said
date  interest  thereon or on the portions  thereof to be redeemed will cease to
accrue.  If less than all the Debt Securities are to be redeemed,  the notice of
redemption  shall specify the numbers of the Debt Securities to be redeemed.  In
case  the Debt  Securities  are to be  redeemed  in part  only,  the  notice  of
redemption  shall  state the  portion  of the  principal  amount  thereof  to be
redeemed and shall state that on and after the date fixed for  redemption,  upon
surrender  of such Debt  Security,  a new Debt  Security or Debt  Securities  in
principal amount equal to the unredeemed portion thereof will be issued.

     Prior to 10:00 a.m.,  New York City time, on the Optional  Redemption  Date
specified in the notice of  redemption  given as provided in this  Section,  the
Company  will  deposit  with the  Trustee or with one or more  Paying  Agents an
amount of money  sufficient  to redeem on such date all the Debt  Securities  so
called for redemption at the  applicable  price  therefor,  together with unpaid
interest accrued to such date.

     The Company will give the Trustee  notice not less than 45 nor more than 60
days  prior to the date fixed for  redemption  as to the price at which the Debt
Securities  are to be  redeemed  and  the  aggregate  principal  amount  of Debt
Securities to be redeemed and the Trustee shall select, in such manner as in its
sole  discretion  it shall deem  appropriate  and fair,  the Debt  Securities or
portions thereof (in integral multiples of $1,000) to be redeemed.

SECTION 10.03     Payment of Debt Securities Called for Redemption.

     If notice of redemption  has been given as provided in Section  10.02,  the
Debt Securities or portions of Debt Securities with respect to which such notice
has been given shall become due and payable on the related  Optional  Redemption
Date and at the place or places  stated in such notice at the  applicable  price
therefor,  together  with  unpaid  interest  accrued  thereon  to said  Optional
Redemption  Date,  and on and after said  Optional  Redemption  Date (unless the
Company shall default in the payment of such Debt  Securities at the  redemption
price,  together with unpaid interest  accrued thereon to said date) interest on
the Debt  Securities  or portions of Debt  Securities  so called for  redemption
shall cease to accrue.  On presentation and surrender of such Debt Securities at
a place of  payment  specified  in said  notice,  such  Debt  Securities  or the
specified  portions  thereof  shall be paid and  redeemed  by the Company at the
applicable price therefor, together with unpaid interest accrued thereon to said
Optional Redemption Date.

     Upon  presentation of any Debt Security  redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the holder  thereof,  at the expense of the Company,  a new Debt  Security or
Debt  Securities of authorized  denominations  in principal  amount equal to the
unredeemed portion of the Debt Security so presented.

                                     - 47 -


<PAGE>


                                   ARTICLE XI
                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

SECTION 11.01     Company May Consolidate, etc., on Certain Terms.

     Nothing contained in this Indenture or in the Debt Securities shall prevent
any consolidation or merger of the Company with or into any other corporation or
corporations  (whether  or  not  affiliated  with  the  Company)  or  successive
consolidations  or mergers in which the Company or its  successor or  successors
shall be a party or parties, or shall prevent any sale, conveyance,  transfer or
other  disposition of all or substantially  all of the property or capital stock
of the Company or its successor or successors to any other corporation  (whether
or not affiliated with the Company,  or its successor or successors)  authorized
to acquire and  operate the same;  provided,  however,  that the Company  hereby
covenants  and agrees that  (i) upon any such  consolidation,  merger (where the
Company is not the surviving corporation),  sale, conveyance,  transfer or other
disposition,  the successor entity shall be a corporation organized and existing
under the laws of the  United  States or any state  thereof or the  District  of
Columbia (unless such corporation has agreed to make all payments due in respect
of the Debt Securities  without  withholding or deduction for, or on account of,
any taxes,  duties,  assessments or other governmental charges under the laws or
regulations of the  jurisdiction of organization or residence (for tax purposes)
of such corporation or any political  subdivision or taxing authority thereof or
therein unless required by applicable law, in which case such corporation  shall
have agreed to pay such additional  amounts as shall be required so that the net
amounts received and retained by the Securityholders, after payment of all taxes
(including  withholding  taxes),  duties,   assessments  or  other  governmental
charges,  will be equal to the  amounts  that such  Securityholders  would  have
received and retained had no such taxes (including  withholding taxes),  duties,
assessments  or other  governmental  charges been imposed) and such  corporation
expressly  assumes  all of  the  obligations  of  the  Company  under  the  Debt
Securities  and  this  Indenture  and  (ii) after  giving  effect  to  any  such
consolidation,  merger,  sale,  conveyance,  transfer or other  disposition,  no
Default or Event of Default shall have occurred and be continuing.

SECTION 11.02     Successor Entity to be Substituted.

     In case of any such consolidation,  merger, sale,  conveyance,  transfer or
other  disposition  contemplated in Section 11.01 and upon the assumption by the
successor corporation, by supplemental indenture,  executed and delivered to the
Trustee  and  reasonably  satisfactory  in form to the  Trustee,  of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Debt  Securities and the due and punctual  performance and observance of all
of the covenants and conditions of this Indenture to be performed or observed by
the Company,  such successor corporation shall succeed to and be substituted for
the Company, with the same effect as if it had been named herein as the Company,
and thereupon the predecessor  entity shall be relieved of any further liability
or obligation hereunder or upon the Debt Securities.  Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company,  any or all of the Debt Securities issuable hereunder which
theretofore  shall not have been  signed by the  Company  and  delivered  to the

                                     - 48 -


<PAGE>


Trustee  or the  Authenticating  Agent;  and,  upon the order of such  successor
corporation instead of the Company and subject to all the terms,  conditions and
limitations  in this  Indenture  prescribed,  the Trustee or the  Authenticating
Agent shall  authenticate and deliver any Debt Securities which previously shall
have been signed and  delivered by the officers of the Company to the Trustee or
the Authenticating Agent for authentication,  and any Debt Securities which such
successor  corporation  thereafter shall cause to be signed and delivered to the
Trustee or the Authenticating Agent for that purpose. All the Debt Securities so
issued  shall in all  respects  have the same legal rank and benefit  under this
Indenture as the Debt Securities  theretofore or thereafter issued in accordance
with the terms of this Indenture as though all of such Debt  Securities had been
issued at the date of the execution hereof.

SECTION 11.03     Opinion of Counsel to be Given to Trustee.

     The Trustee,  subject to the  provisions of Sections  6.01 and 6.02,  shall
receive,  in  addition to the Opinion of Counsel  required by Section  9.05,  an
Opinion of Counsel as conclusive evidence that any consolidation,  merger, sale,
conveyance,  transfer or other  disposition,  and any  assumption,  permitted or
required by the terms of this Article XI complies  with the  provisions  of this
Article XI.


                                  ARTICLE XII
                     SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 12.01     Discharge of Indenture.

     When (a) the Company shall deliver to the Trustee for cancellation all Debt
Securities theretofore authenticated (other than any Debt Securities which shall
have been  destroyed,  lost or stolen and which shall have been replaced or paid
as provided in Section 2.06) and not theretofore  canceled,  or (b) all the Debt
Securities not theretofore canceled or delivered to the Trustee for cancellation
shall  have  become  due and  payable,  or are by their  terms to become due and
payable within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption,
and the Company shall deposit with the Trustee,  in trust, funds, which shall be
immediately due and payable,  sufficient to pay at maturity or upon  redemption,
as the case may be, all of the Debt  Securities  (other than any Debt Securities
which  shall  have been  destroyed,  lost or stolen  and which  shall  have been
replaced  or paid as  provided  in Section  2.06) not  theretofore  canceled  or
delivered to the Trustee for cancellation,  including  principal and premium, if
any,  and  interest  due or to become due to the  Maturity  Date or any Optional
Redemption Date, as the case may be, but excluding,  however,  the amount of any
moneys for the payment of principal  of and premium,  if any, or interest on the
Debt  Securities (1)  theretofore  repaid to the Company in accordance  with the
provisions  of Section  12.04,  or (2) paid to any state or to the  District  of
Columbia pursuant to its unclaimed  property or similar laws, and if in the case
of either clause (a) or (b) above the Company shall also pay or cause to be paid
all other sums payable hereunder by the Company, then this Indenture shall cease
to be of further effect except for the provisions of Sections 2.05,  2.06, 3.01,

                                     - 49 -


<PAGE>


3.02,  3.04,  6.06,  6.09 and 12.04 hereof,  which shall survive until such Debt
Securities  shall  mature or are  redeemed,  as the case may be, and are paid in
full. Thereafter,  Sections 6.06, 6.09 and 12.04 shall survive, and the Trustee,
on demand of the Company accompanied by an Officers'  Certificate and an Opinion
of Counsel,  each  stating that all  conditions  precedent  herein  provided for
relating to the  satisfaction and discharge of this Indenture have been complied
with,  and at  the  cost  and  expense  of the  Company,  shall  execute  proper
instruments  acknowledging  satisfaction  of  and  discharging  this  Indenture,
provided,  however,  that the Company hereby agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
in connection with this Indenture or the Debt Securities.

SECTION 12.02     Deposited Moneys to be Held in Trust by Trustee.

     Subject to the provisions of Section 12.04,  all moneys  deposited with the
Trustee  pursuant  to Section  12.01 shall be held in trust and applied by it to
the payment,  either directly or through any Paying Agent (including the Company
if acting as its own  Paying  Agent),  to the  holders  of the  particular  Debt
Securities  for the payment of which such moneys  have been  deposited  with the
Trustee,  of all sums due and to become due thereon for principal,  premium,  if
any, and interest.

SECTION 12.03     Paying Agent to Repay Moneys Held.

     Upon the satisfaction and discharge of this Indenture, all moneys then held
by any Paying Agent of the Debt Securities  (other than the Trustee) shall, upon
demand of the  Company,  be repaid to the  Company or paid to the  Trustee,  and
thereupon  such Paying Agent shall be released from all further  liability  with
respect to such moneys.

SECTION 12.04     Return of Unclaimed Moneys.

     Any moneys  deposited  with or paid to the Trustee or any Paying  Agent for
payment of the principal of and premium,  if any, or interest on Debt Securities
and not applied but remaining  unclaimed by the holders of Debt  Securities  for
two  years  after  the date upon  which  such  principal,  premium,  if any,  or
interest, as the case may be, shall have become due and payable, shall be repaid
to the Company by the Trustee or such Paying  Agent on written  demand;  and the
holder of any of the Debt Securities  shall  thereafter look only to the Company
for any payment  which such holder may be entitled to collect and all  liability
of the Trustee or such Paying Agent with respect to such moneys shall  thereupon
cease.

                                     - 50 -


<PAGE>


                                  ARTICLE XIII
                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                             OFFICERS AND DIRECTORS

SECTION 13.01     Indenture and Debt Securities Solely Corporate Obligations.

     No recourse  for the  payment of the  principal  of or premium,  if any, or
interest on any Debt  Security,  or for any claim based  thereon or otherwise in
respect  thereof,  and no  recourse  under or upon any  obligation,  covenant or
agreement of the Company in this Indenture or in any supplemental  indenture, or
in any such Debt  Security,  or  because  of the  creation  of any  indebtedness
represented  thereby,  shall  be  had  against  any  incorporator,  stockholder,
officer,  director,  employee or agent, as such, past, present or future, of the
Company or of any  predecessor or successor  corporation of the Company,  either
directly or through the Company or any  successor  corporation  of the  Company,
whether  by  virtue  of any  constitution,  statute  or rule  of law,  or by the
enforcement  of any  assessment  or penalty  or  otherwise;  it being  expressly
understood that all such liability is hereby  expressly waived and released as a
condition of, and as a  consideration  for, the execution of this  Indenture and
the issuance of the Debt Securities.


                                  ARTICLE XIV
                            MISCELLANEOUS PROVISIONS

SECTION 14.01     Successors.

     All the  covenants,  stipulations,  promises and  agreements of the Company
contained in this Indenture  shall bind its  successors and assigns,  whether so
expressed or not.

SECTION 14.02     Official Acts by Successor Entity.

     Any act or  proceeding  by any  provision of this  Indenture  authorized or
required  to be done or  performed  by any  board,  committee  or officer of the
Company  shall and may be done and  performed  with like force and effect by the
like board,  committee,  officer or other  authorized  Person of any entity that
shall at the time be the lawful successor of the Company.

SECTION 14.03     Surrender of Company Powers.

     The Company,  by  instrument  in writing  executed by authority of 2/3 (two
thirds) of its Board of Directors  and  delivered to the Trustee,  may surrender
any  of  the  powers  reserved  to the  Company  and  thereupon  such  power  so
surrendered  shall  terminate  both as to the  Company  and as to any  permitted
successor.

                                     - 51 -


<PAGE>


SECTION 14.04     Addresses for Notices, etc.

     Any notice or demand which by any  provision of this  Indenture is required
or permitted to be given or served by the Trustee or by the  Securityholders  on
the Company may be given or served in writing by being deposited postage prepaid
by  registered or certified  mail in a post office  letter box addressed  (until
another  address is filed by the Company  with the Trustee for such  purpose) to
the Company at 6500 River Place  Boulevard,  Building.  1, Austin,  Texas 78730,
Attention:  Theodore A. Fleron. Any notice, direction,  request or demand by any
Securityholder  or the  Company to or upon the  Trustee  shall be deemed to have
been sufficiently  given or made, for all purposes,  if given or made in writing
at the office of Wilmington  Trust  Company at Rodney  Square North,  1100 North
Market  Street,   Wilmington,   DE  19890-0001,   Attention:   Corporate   Trust
Administration.

SECTION 14.05     Governing Law.

     This  Indenture  and the Debt  Securities  shall each be  governed  by, and
construed in accordance with, the laws of the State of New York,  without regard
to conflict of laws  principles  of said State other than Section  5-1401 of the
New York General Obligations Law.

SECTION 14.06     Evidence of Compliance with Conditions Precedent.

     Upon any  application  or demand by the  Company to the Trustee to take any
action under any of the provisions of this Indenture,  the Company shall furnish
to the  Trustee 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 an  Opinion of
Counsel  stating  that,  in the  opinion of such  counsel,  all such  conditions
precedent  have been  complied  with  (except that no such Opinion of Counsel is
required to be furnished to the Trustee in  connection  with the  authentication
and issuance of Debt Securities issued on the date of this Indenture).

     Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture (except certificates delivered pursuant to Section 3.05) shall
include (a) a statement  that the person making such  certificate or opinion has
read such  covenant or  condition;  (b) 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; (c) a statement that, in the
opinion of such person,  he or she has made such examination or investigation as
is necessary  to enable him or her to express an informed  opinion as to whether
or not such covenant or condition has been complied with; and (d) a statement as
to whether or not, in the opinion of such person, such condition or covenant has
been complied with.

                                     - 52 -


<PAGE>


SECTION 14.07     Business Day Convention.

     Notwithstanding  anything to the contrary contained herein, if any Interest
Payment  Date,  other than the Maturity  Date or any Optional  Redemption  Date,
falls on a day that is not a Business  Day,  then any  interest  payable will be
paid on, and such  Interest  Payment Date will be moved to, the next  succeeding
Business Day, and additional interest will accrue for each day that such payment
is delayed as a result thereof.  If the Maturity Date or any Optional Redemption
Date falls on a day that is not a Business Day, then the principal,  premium, if
any,  and/or  interest  payable on such date will be paid on the next succeeding
Business Day, and no additional  interest will accrue in respect of such payment
made on such next succeeding Business Day.

SECTION 14.08     Table of Contents, Headings, etc.

     The table of  contents  and the titles and  headings  of the  Articles  and
Sections of this Indenture have been inserted for convenience of reference only,
are not to be  considered a part hereof,  and shall in no way modify or restrict
any of the terms or provisions hereof.

SECTION 14.09     Execution in Counterparts.

     This Indenture may be executed in any number of counterparts, each of which
shall be an original,  but such counterparts  shall together  constitute but one
and the same instrument.

SECTION 14.10     Separability.

     In case any one or more of the provisions contained in this Indenture or in
the Debt  Securities  shall for any  reason be held to be  invalid,  illegal  or
unenforceable in any respect,  such invalidity,  illegality or  unenforceability
shall  not  affect  any  other  provisions  of this  Indenture  or of such  Debt
Securities, but this Indenture and such Debt Securities shall be construed as if
such invalid, illegal or unenforceable provision had never been contained herein
or therein.

SECTION 14.11     Assignment.

     Subject to  Article  XI,  the  Company  will have the right at all times to
assign  any of its  rights or  obligations  under  this  Indenture  and the Debt
Securities  to a direct or indirect  wholly  owned  Subsidiary  of the  Company;
provided,  however, that, in the event of any such assignment, the Company shall
remain liable for all such obligations. Subject to the foregoing, this Indenture
is  binding  upon and  inures to the  benefit  of the  parties  hereto and their
respective  successors and assigns. This Indenture may not otherwise be assigned
by the parties thereto.

                                     - 53 -


<PAGE>


     Wilmington  Trust Company,  in its capacity as Trustee,  hereby accepts the
trusts in this  Indenture  declared and provided,  upon the terms and conditions
herein above set forth.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Indenture to be
duly executed by their respective officers thereunto duly authorized,  as of the
day and year first above written.

                                        FINANCIAL INDUSTRIES CORPORATION



                                        By:____________________________________
                                        Name:
                                        Title:


                                        WILMINGTON TRUST COMPANY,
                                         as Trustee


                                        By: ___________________________________
                                        Name:
                                        Title:




                                     - 54 -


<PAGE>


                                                                       EXHIBIT A

                              FORM OF DEBT SECURITY

                           [FORM OF FACE OF SECURITY]

     THIS SECURITY HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT"),  OR ANY  STATE  SECURITIES  LAWS OR ANY OTHER
APPLICABLE   SECURITIES  LAWS.   NEITHER  THIS  SECURITY  NOR  ANY  INTEREST  OR
PARTICIPATION  HEREIN MAY BE REOFFERED,  SOLD, ASSIGNED,  TRANSFERRED,  PLEDGED,
ENCUMBERED  OR  OTHERWISE  DISPOSED  OF IN THE ABSENCE OF SUCH  REGISTRATION  OR
UNLESS SUCH  TRANSACTION  IS EXEMPT  FROM,  OR NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION  HEREIN, BY ITS ACCEPTANCE  HEREOF OR THEREOF,  AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION  HEREIN  PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE  SECURITIES  ACT)
AFTER THE LATER OF (Y) THE DATE OF  ORIGINAL  ISSUANCE  HEREOF  AND (Z) THE LAST
DATE ON WHICH THE  COMPANY OR ANY  AFFILIATE  (AS  DEFINED IN RULE 405 UNDER THE
SECURITIES  ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR  THERETO) AND (ii) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY ANY SUBSEQUENT  CHANGE IN APPLICABLE  LAW, ONLY (A) TO THE
COMPANY,  (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED  INSTITUTIONAL  BUYER", AS
DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE  IN  RELIANCE  ON  RULE  144A,  (C)  PURSUANT  TO  AN  EXEMPTION  FROM  THE
REGISTRATION  REQUIREMENTS  OF THE SECURITIES  ACT TO AN  "ACCREDITED  INVESTOR"
WITHIN THE MEANING OF  SUBPARAGRAPH  (a) (1),  (2),  (3), (7) OR (8) OF RULE 501
UNDER THE  SECURITIES  ACT THAT IS ACQUIRING  THIS  SECURITY OR SUCH INTEREST OR
PARTICIPATION  FOR ITS OWN  ACCOUNT,  OR FOR THE  ACCOUNT OF SUCH AN  ACCREDITED
INVESTOR,  FOR INVESTMENT  PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION  WITH, ANY  DISTRIBUTION  IN VIOLATION OF THE SECURITIES  ACT, (D)
PURSUANT  TO OFFERS AND SALES TO NON-US  PERSONS  THAT OCCUR  OUTSIDE THE UNITED
STATES  PURSUANT TO  REGULATION  S UNDER THE  SECURITIES  ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT,  SUBJECT TO THE COMPANY'S  RIGHT PRIOR TO ANY SUCH OFFER,  SALE OR TRANSFER
PURSUANT TO CLAUSE (C),  (D) OR (E) ABOVE TO REQUIRE THE  DELIVERY OF AN OPINION
OF  COUNSEL,  CERTIFICATION  AND/OR  OTHER  INFORMATION  SATISFACTORY  TO  IT IN
ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
THE HOLDER OF THIS  SECURITY OR ANY  INTEREST OR  PARTICIPATION  HEREIN,  BY ITS
ACCEPTANCE  HEREOF OR  THEREOF,  AS THE CASE MAY BE,  AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.

                                      A-1


<PAGE>


     THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE  HEREOF OR THEREOF,  AS THE CASE MAY BE, ALSO AGREES,  REPRESENTS AND
WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,  INDIVIDUAL  RETIREMENT  ACCOUNT OR
OTHER PLAN OR ARRANGEMENT  SUBJECT TO TITLE I OF THE EMPLOYEE  RETIREMENT INCOME
SECURITY  ACT OF 1974,  AS AMENDED  ("ERISA"),  OR SECTION  4975 OF THE INTERNAL
REVENUE  CODE OF 1986,  AS AMENDED (THE  "CODE")  (EACH A "PLAN"),  OR AN ENTITY
WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT
IN THE ENTITY AND NO PERSON  INVESTING  "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR
HOLD  THIS  SECURITY  OR ANY  INTEREST  OR  PARTICIPATION  HEREIN,  UNLESS  SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE  RELIEF  AVAILABLE  UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED  TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 OR ANOTHER  APPLICABLE  EXEMPTION  OR ITS  PURCHASE AND HOLDING OF
THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION 406
OF ERISA OR SECTION 4975 OF THE CODE WITH  RESPECT TO SUCH  PURCHASE OR HOLDING.
ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN
WILL BE  DEEMED  TO HAVE  REPRESENTED  BY ITS  PURCHASE  AND  HOLDING  HEREOF OR
THEREOF,  AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
WITHIN THE MEANING OF SECTION 3(3) OF ERISA,  OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS  APPLICABLE,  A  TRUSTEE  OR OTHER  PERSON  ACTING  ON  BEHALF OF AN
EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF
ANY  EMPLOYEE  BENEFIT  PLAN OR PLAN TO  FINANCE  SUCH  PURCHASE,  OR (ii)  SUCH
PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED  TRANSACTION  UNDER SECTION
406 OF  ERISA OR  SECTION  4975 OF THE CODE  FOR  WHICH  THERE IS NO  APPLICABLE
STATUTORY OR ADMINISTRATIVE EXEMPTION.

     IN CONNECTION  WITH ANY TRANSFER,  THE HOLDER OF THIS SECURITY WILL DELIVER
TO THE REGISTRAR AND TRANSFER AGENT SUCH  CERTIFICATES AND OTHER  INFORMATION AS
MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER  COMPLIES WITH THE
FOREGOING RESTRICTIONS.

     THIS  SECURITY  WILL BE  ISSUED  AND  MAY BE  TRANSFERRED  ONLY IN  MINIMUM
DENOMINATIONS  OF  $100,000  AND  MULTIPLES  OF $1,000 IN  EXCESS  THEREOF.  ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL
BE  DEEMED  TO BE VOID AND OF NO LEGAL  EFFECT  WHATSOEVER.  ANY SUCH  PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR  PARTICIPATION  HEREIN FOR ANY  PURPOSE,  INCLUDING,  BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND
SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

                                      A-2


<PAGE>


                   Floating Rate Senior Debt Security due 2033
                                       of
                        FINANCIAL INDUSTRIES CORPORATION


     Financial  Industries  Corporation,  a holding company  incorporated in the
State of Texas (the "Company", which term includes any successor permitted under
the  Indenture  (as defined  herein)),  for value  received,  promises to pay to
JPMorgan  Chase Bank,  as Trustee for the benefit of the  Noteholders  of InCapS
Funding I, Ltd., or registered assigns,  the principal amount of FIFTEEN MILLION
Dollars  ($15,000,000)  on May __, 2033 (the  "Maturity  Date") (or any Optional
Redemption  Date, as defined herein,  or any earlier date of acceleration of the
maturity  of  this  Debt  Security),  and to  pay  interest  on the  outstanding
principal  amount of this Debt  Security  from  May 22,  2003,  or from the most
recent Interest  Payment Date (as defined below) to which interest has been paid
or duly provided for, quarterly in arrears on February 23, May 23, August 23 and
November 23 of each year,  commencing  on  August 23,  2003 (each,  an "Interest
Payment  Date"),  at a  floating  rate per  annum,  which,  with  respect to any
Interest  Period  (as  defined  in the  Indenture),  will be equal to LIBOR  (as
defined in the  Indenture),  as determined on the LIBOR  Determination  Date (as
defined in the  Indenture) for such Interest  Period,  plus 4.20% (the "Interest
Rate")  (provided  that the Interest  Rate for any Interest  Period prior to the
Interest  Period  commencing  on the  Interest  Payment Date in May 2008 may not
exceed 12.5% per annum;  and provided,  further,  that the Interest Rate for any
Interest  Period may not exceed the highest  rate  permitted by New York law, as
the same may be modified by United States law of general  application) until the
principal  hereof shall have been paid or duly  provided for, and on any overdue
principal  and  (without  duplication  and to the  extent  that  payment of such
interest is  enforceable  under  applicable  law) on any overdue  installment of
interest  at an  annual  rate  equal  to  the  then  applicable  Interest  Rate,
compounded  quarterly.  The amount of interest  payable for any Interest  Period
shall be computed on the basis of a 360-day  year and the actual  number of days
elapsed in such Interest Period.

     The interest  installment so payable,  and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the  Person  in  whose  name  this  Debt  Security  (or one or more  Predecessor
Securities,  as defined in the Indenture) is registered at the close of business
on the "regular record date" for such interest  installment,  which shall be the
fifteenth day prior to such Interest Payment Date,  whether or not such day is a
Business Day (as defined herein).  Any such interest  installment not punctually
paid or duly provided for shall  forthwith cease to be payable to the holders on
such  regular  record date and may be paid to the Person in whose name this Debt
Security (or one or more  Predecessor  Securities) is registered at the close of
business on a special  record date to be fixed by the Trustee for the payment of
such  defaulted  interest,  notice  whereof shall be given to the holders of the
Debt  Securities not less than 10 days prior to such special record date, all as
more fully provided in the Indenture.

                                      A-3


<PAGE>


     Payment of the principal of and premium,  if any, and interest on this Debt
Security due on the Maturity Date or any Optional  Redemption  Date, as the case
may be, shall be made in immediately  available funds against  presentation  and
surrender  of  this  Debt  Security  at the  office  or  agency  of the  Trustee
maintained for that purpose in Wilmington,  Delaware, or at the office or agency
of any other Paying Agent  appointed by the Company  maintained for that purpose
in  Wilmington,  Delaware  or Austin,  Texas.  Payment of  interest on this Debt
Security  due on any Interest  Payment Date other than the Maturity  Date or any
Optional Redemption Date, as the case may be, shall be made at the option of the
Company by check mailed to the holder thereof at such address as shall appear in
the Debt Security Register or by wire transfer of immediately available funds to
an account  appropriately  designated by the holder hereof.  Notwithstanding the
foregoing, so long as the holder of this Debt Security is InCapS Funding I, Ltd.
or a trustee  thereof,  payment of the  principal  of and  premium,  if any, and
interest on this Debt Security shall be made in immediately available funds when
due at such place and to such account as may be designated by InCapS  Funding I,
Ltd. or a trustee  thereof.  All payments in respect of this Debt Security shall
be payable in any coin or currency of the United  States of America  that at the
time of payment is legal tender for payment of public and private debts.

     Notwithstanding  anything to the contrary contained herein, if any Interest
Payment  Date,  other than the Maturity  Date or any Optional  Redemption  Date,
falls on a day that is not a Business  Day,  then any  interest  payable will be
paid on, and such  Interest  Payment Date will be moved to, the next  succeeding
Business Day, and additional interest will accrue for each day that such payment
is delayed as a result thereof.  If the Maturity Date or any Optional Redemption
Date falls on a day that is not a Business Day, then the principal,  premium, if
any,  and/or  interest  payable on such date will be paid on the next succeeding
Business Day, and no additional  interest will accrue in respect of such payment
made on such next succeeding Business Day.

     The Company waives diligence,  presentment,  demand for payment,  notice of
nonpayment, notice of protest, and all other demands and notices.

     This Debt Security shall not be entitled to any benefit under the Indenture
and  shall  not be  valid  or  become  obligatory  for  any  purpose  until  the
certificate of  authentication  hereon shall have been signed by or on behalf of
the Trustee.

     The  provisions  of this Debt  Security  are  continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.

                                      A-4


<PAGE>


     IN WITNESS WHEREOF, the Company has duly executed this certificate.


                                        FINANCIAL INDUSTRIES CORPORATION


                                        By: ___________________________________
                                        Name:
                                        Title:



Dated:  May 22, 2003




                          CERTIFICATE OF AUTHENTICATION


     This is one of the  Debt  Securities  referred  to in the  within-mentioned
Indenture.


                                        WILMINGTON TRUST COMPANY,
                                        not in its individual capacity but
                                        solely as the Trustee


                                        By: ___________________________________
                                            Authorized Officer


Dated:  May 22, 2003

                                      A-5


<PAGE>


                          [FORM OF REVERSE OF SECURITY]


     This Debt Security is one of a duly authorized series of debt securities of
the Company  (collectively,  the "Debt Securities"),  all issued or to be issued
pursuant to an  Indenture  (the  "Indenture"),  dated as of May 22,  2003,  duly
executed and delivered  between the Company and  Wilmington  Trust  Company,  as
Trustee (the  "Trustee"),  to which  Indenture and all  indentures  supplemental
thereto reference is hereby made for a description of the rights, limitations of
rights,  obligations,  duties and  immunities  thereunder  of the  Trustee,  the
Company and the holders of the Debt  Securities of which this Debt Security is a
part.

     The  Company  shall  have the right to redeem  this  Debt  Security  at its
option, in whole or (provided that all accrued and unpaid interest has been paid
on all Debt Securities for all Interest Periods  terminating on or prior to such
date) from time to time in part,  on any  Interest  Payment Date on or after May
23, 2008 (each, an "Optional Redemption Date"), at the Optional Redemption Price
(as defined herein).

     Any  redemption  pursuant to the preceding  paragraph will be made upon not
less than 30 days'  nor more than 60 days'  prior  written  notice.  If the Debt
Securities are only partially redeemed by the Company,  the Debt Securities will
be redeemed  pro rata or by any other  method  utilized by the  Trustee.  In the
event of  redemption  of this Debt Security in part only, a new Debt Security or
Debt Securities for the unredeemed  portion hereof will be issued in the name of
the holder hereof upon the cancellation hereof.

     "Optional  Redemption  Price"  means an amount in cash equal to 100% of the
principal  amount of this Debt  Security  being  redeemed  plus unpaid  interest
accrued thereon to the Optional Redemption Date.

     In case an Event of  Default,  as  defined  in the  Indenture,  shall  have
occurred and be continuing,  the principal of all of the Debt  Securities may be
declared,  and, in certain cases, shall ipso facto become, due and payable,  and
upon any such declaration of acceleration shall become due and payable,  in each
case, in the manner,  with the effect and subject to the conditions  provided in
the Indenture.

     The Indenture contains  provisions  permitting the Company and the Trustee,
with the consent of the holders of a majority in aggregate  principal  amount of
the Debt Securities at the time outstanding  affected  thereby,  as specified in
the Indenture,  to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating  any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner the
rights of the holders of the Debt Securities;  provided,  however,  that no such
supplemental  indenture  shall,  among other things,  without the consent of the
holders of each Debt Security then outstanding and affected  thereby  (i) change
the Maturity Date of any Debt Security,  or reduce the principal  amount thereof
or any  premium  thereon,  or reduce the rate (or manner of  calculation  of the
rate) or extend the time of payment of interest  thereon,  or reduce (other than

                                      A-6


<PAGE>


as a result of the maturity or earlier  redemption  of any such Debt Security in
accordance  with the terms of the Indenture and such Debt  Security) or increase
the aggregate  principal amount of Debt Securities then  outstanding,  or change
any of the redemption provisions,  or make the principal thereof or any interest
or premium  thereon  payable in any coin or currency  other than  United  States
Dollars,  or impair or affect  the  right of any  holder to  institute  suit for
payment thereof, or (ii) reduce the aforesaid  percentage of Debt Securities the
holders of which are required to consent to any such supplemental indenture. The
Indenture  also  contains  provisions  permitting  the  holders of a majority in
aggregate  principal amount of the Debt Securities at the time  outstanding,  on
behalf of the holders of all the Debt  Securities,  to waive any past default in
the  performance  of  any of  the  covenants  contained  in  the  Indenture,  or
established  pursuant  to the  Indenture,  and its  consequences,  except  (a) a
default  in  payments  due in respect  of any of the Debt  Securities  or (b) in
respect of covenants or provisions of the Indenture  which cannot be modified or
amended  without the consent of the holder of each Debt Security  affected.  Any
such consent or waiver by the holder of this Debt  Security  (unless  revoked as
provided in the Indenture)  shall be conclusive and binding upon such holder and
upon all  future  holders  and  owners  of this  Debt  Security  and of any Debt
Security issued in exchange  herefor or in place hereof (whether by registration
of transfer or otherwise),  irrespective  of whether or not any notation of such
consent or waiver is made upon this Debt Security.

     No reference herein to the Indenture and no provision of this Debt Security
or of the Indenture  shall alter or impair the obligation of the Company,  which
is absolute and unconditional,  to make all payments due in respect of this Debt
Security  at the  time  and  place  and  at the  rate  and in the  money  herein
prescribed.

     As provided in the Indenture and subject to certain  limitations herein and
therein set forth,  this Debt Security is  transferable  by the holder hereof on
the Debt Security  Register (as defined in the  Indenture) of the Company,  upon
surrender of this Debt  Security for  registration  of transfer at the office or
agency of the Trustee in Wilmington,  Delaware, or at any other office or agency
of the  Company in  Wilmington,  Delaware  or Austin,  Texas,  accompanied  by a
written  instrument  or  instruments  of  transfer in form  satisfactory  to the
Company or the  Trustee  duly  executed  by the holder  hereof or such  holder's
attorney  duly  authorized  in  writing,  and  thereupon  one or more  new  Debt
Securities  of authorized  denominations  and for the same  aggregate  principal
amount will be issued to the designated  transferee or  transferees.  No service
charge will be made for any such  registration  of transfer,  but the Company or
the Trustee may require  payment of a sum  sufficient  to cover any tax,  fee or
other  governmental  charge  payable in  relation  thereto as  specified  in the
Indenture.

                                      A-7


<PAGE>


    Prior  to due  presentment  for  registration  of  transfer  of  this  Debt
Security,  the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any transfer agent and the Debt Security registrar may deem and treat the holder
hereof as the absolute owner hereof  (whether or not this Debt Security shall be
overdue and  notwithstanding  any notice of ownership or writing hereon) for the
purpose of  receiving  payment of the  principal  of and  premium,  if any,  and
interest  on this  Debt  Security  and for all other  purposes,  and none of the
Company, the Trustee,  any Authenticating  Agent, any Paying Agent, any transfer
agent or any Debt  Security  registrar  shall be  affected  by any notice to the
contrary.

     As provided in the Indenture and subject to certain  limitations herein and
therein  set  forth,  Debt  Securities  are  exchangeable  for a like  aggregate
principal amount of Debt Securities of different  authorized  denominations,  as
requested by the holder surrendering the same.

     The Debt  Securities  are issuable  only in  registered  certificated  form
without coupons.

     No recourse shall be had for the payment of the principal of or premium, if
any, or  interest  on this Debt  Security,  or for any claim  based  hereon,  or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any  incorporator,  stockholder,  officer,  director,  employee or agent,  past,
present or future,  as such, of the Company or of any  predecessor  or successor
corporation of the Company,  whether by virtue of any  constitution,  statute or
rule of law, or by the  enforcement  of any  assessment or penalty or otherwise,
all  such  liability  being,  by  the  acceptance  hereof  and  as  part  of the
consideration for the issuance hereof, expressly waived and released.

     All  terms  used but not  defined  in this  Debt  Security  shall  have the
meanings assigned to them in the Indenture.

     THIS DEBT SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

                                      A-8


<PAGE>


                                                                       EXHIBIT B


                          FORM OF OFFICERS' CERTIFICATE

                           QUARTERLY FINANCIAL REPORT



TO: Wilmington Trust Company
    Rodney Square North
    1100 North Market Street
    Wilmington, Delaware 19890-0001
    Attention: Corporate Trust Administration

                  PLEASE COMPLETE FOR EACH INSURANCE SUBSIDIARY


Name of Insurance Company:._________________________________

Date of Report:                                                     ___________

Current A.M. Best Insurer's Financial Strength Rating:              ___________


Please provide the following  information for the most recent  quarterly  period
ended Quarter: __ March 31 __ June 30 __ September 30 __ December 31 Year: 20___

Most Recently Reported NAIC Risk Based Capital Ratio                ___________%

Total Policyholders' Surplus                                        $__________

Ratio of Consolidated Debt and Preferred Stock
 to Total Policyholders' Surplus                                    ___________%

Total Admitted Assets                                               $__________

Ratio of NAIC Class 1 & 2 Rated Investments
 to Total Fixed Income Investments                                  ___________%

Ratio of NAIC Class 1 & 2 Rated Investments to
Total Investments                                                   ___________%

Return on Policyholders' Surplus for the Trailing Twelve Month
 Period                                                             ___________%

                                      B-1


<PAGE>


For Property & Casualty Companies:

Expense Ratio                                                       ___________%

Loss and LAE Ratio                                                  ___________%

Combined Ratio    .                                                 ___________%

Net Premiums Written (trailing twelve month period)
 to Policyholders' Surplus.                                         ___________%

                                      B-2


<PAGE>


                                  CERTIFICATION

     The undersigned hereby certifies that he/she has duly executed the attached
Quarterly Financial Report, dated ______, __, for and on behalf of ____________,
that  he/she  is the  _______________  of such  Company,  and  that  he/she  has
authority to execute and file such instrument. The undersigned further certifies
that  he/she is familiar  with such  instrument  and that the facts  therein set
forth are true to the best of his/her knowledge, information and belief.





                                        Name: _________________________________

                                      B-3


<PAGE>


                                     LEGEND



NAIC Risk Based Capital  Ratio-P&C      (Total  Adjusted  Capital (as defined in
                                        the  NAIC  RBC  Instructions for  P & C
                                        Insurers)/Authorized Control Level Risk-
                                        Based Capital)

NAIC Risk Based Capital Ratio-Life      (Total Adjusted  Capital (as  defined in
                                        the  NAIC  RBC  Instructions  for  Life
                                        Insurers)/Authorized Control Level Risk-
                                        Based Capital)

Total Capital and Surplus-Life          Common Capital Stock + Preferred Capital
                                        Stock  +  Aggregate  Write-Ins for other
                                        than  special  surplus funds  +  Surplus
                                        Notes + Gross  Paid-In  and  Contributed
                                        Surplus +Aggregate Write-Ins for Special
                                        Surplus Funds +Unassigned Funds(Surplus)
                                        + Asset Valuation Reserve-Treasury Stock

Total Capital and Surplus-P&C           Aggregate  Write-Ins for Special Surplus
                                        Funds + Common Capital Stock + Preferred
                                        Capital  Stock + Aggregate Write-Ins for
                                        other  than  special  surplus  funds +
                                        Surplus Notes + Gross  Paid-In  and Con-
                                        tributed  Surplus  +  Unassigned  Funds
                                        (Surplus) - Treasury Stock

Total Admitted Assets                   Total  admitted  assets as determined in
                                        accordance  with  statutory  accounting
                                        principles

Return on Policyholders' Surplus        Net  Income/Policyholders'  Surplus  for
for the Trailing Twelve Month Period    the Trailing Twelve Month Period

Expense Ratio                           Other Underwriting Expenses Incurred/Net
                                        premiums Earned

Loss and LAE Ratio                      (Losses Incurred + Loss Expenses
                                        Incurred)/Net Premiums Earned

Combined Ratio                          Expense Ratio + Loss and LAE Ratio

Net Premiums Written (trailing          Net  Premiums  Written of  the  trailing
twelve month period) to                 twelve  month  period / Policyholders'
Policyholders' Surplus                  Surplus

                                      B-4









</TEXT>
</DOCUMENT>
