BNCCORP INC
EXHIBIT 10.1 - INDENTURE AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex1.txt
<DESCRIPTION>EXHIBIT 10.1 - INDENTURE AGREEMENT
<TEXT>






                                 BNCCORP, INC.,
                                    as Issuer






                                    INDENTURE
                            Dated as of July 31, 2001



          State Street Bank and Trust Company OF CONNECTICUT, NATIONAL
                                  ASSOCIATION,
                                   as Trustee




        FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES


                                    DUE 2031



<PAGE>


                                TABLE OF CONTENTS
                                                                           Page

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

      Section 1.1   Definitions...............................................1

ARTICLE II. DEBENTURES........................................................7

      Section 2.1   Authentication and Dating.................................7
      Section 2.2   Form of Trustee's Certificate of Authentication...........8
      Section 2.3   Form and Denomination of Debentures.......................8
      Section 2.4   Execution of Debentures...................................8
      Section 2.5   Exchange and Registration of Transfer of Debentures.......9
      Section 2.6   Mutilated, Destroyed, Lost or Stolen Debentures..........11
      Section 2.7   Temporary Debentures.....................................11
      Section 2.8   Payment of Interest and Additional Interest..............12
      Section 2.9   Cancellation of Debentures Paid, etc.....................13
      Section 2.10  Computation of Interest Rate.............................13
      Section 2.11  Extension of Interest Payment Period.....................15
      Section 2.12  CUSIP Numbers............................................16

ARTICLE III. PARTICULAR COVENANTS OF THE COMPANY.............................16

      Section 3.1   Payment of Principal, Premium and Interest; Agreed
                    Treatment of the Debentures..............................16
      Section 3.2   Offices for Notices and Payments, etc....................16
      Section 3.3   Appointments to Fill Vacancies in Trustee's Office.......17
      Section 3.4   Provision as to Paying Agent.............................17
      Section 3.5   Certificate to Trustee...................................18
      Section 3.6   Additional Sums..........................................18
      Section 3.7   Compliance with Consolidation Provisions.................18
      Section 3.8   Limitation on Dividends..................................18
      Section 3.9   Covenants as to the Trust................................19
      Section 3.10  Additional Junior Indebtedness...........................19

ARTICLE  IV. SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE
             TRUSTEE.........................................................19

      Section 4.1   Securityholders' Lists...................................19
      Section 4.2   Preservation and Disclosure of Lists.....................20

ARTICLE V. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF
           DEFAULT...........................................................21

      Section 5.1   Events of Default........................................21
      Section 5.2   Payment of Debentures on Default; Suit Therefor..........22
      Section 5.3   Application of Moneys Collected by Trustee...............24
      Section 5.4   Proceedings by Securityholders...........................24
      Section 5.5   Proceedings by Trustee...................................24
      Section 5.6   Remedies Cumulative and Continuing; Delay or Omission
                    Not a Waiver.............................................25

<PAGE>

      Section 5.7   Direction of Proceedings and Waiver of Defaults by
                    Majority of Securityholders..............................25
      Section 5.8   Notice of Defaults.......................................25
      Section 5.9   Undertaking to Pay Costs.................................26

ARTICLE VI. CONCERNING THE TRUSTEE...........................................26

      Section 6.1   Duties and Responsibilities of Trustee...................26
      Section 6.2   Reliance on Documents, Opinions, etc.....................27
      Section 6.3   No Responsibility for Recitals, etc......................28
      Section 6.4   Trustee, Authenticating Agent, Paying Agents, Transfer
                    Agents or Registrar May Own Debentures...................28
      Section 6.5   Moneys to be Held in Trust...............................28
      Section 6.6   Compensation and Expenses of Trustee.....................28
      Section 6.7   Officers' Certificate as Evidence........................29
      Section 6.8   Eligibility of Trustee...................................29
      Section 6.9   Resignation or Removal of Trustee........................30
      Section 6.10  Acceptance by Successor Trustee..........................31
      Section 6.11  Succession by Merger, etc................................31
      Section 6.12  Authenticating Agents....................................32

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

      Section 7.1   Action by Securityholders................................32
      Section 7.2   Proof of Execution by Securityholders....................33
      Section 7.3   Who Are Deemed Absolute Owners...........................33
      Section 7.4   Debentures Owned by Company Deemed Not Outstanding.......33
      Section 7.5   Revocation of Consents; Future Holders Bound.............34

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

      Section 8.1   Purposes of Meetings.....................................34
      Section 8.2   Call of Meetings by Trustee..............................34
      Section 8.3   Call of Meetings by Company or Securityholders...........35
      Section 8.4   Qualifications for Voting................................35
      Section 8.5   Regulations..............................................35
      Section 8.6   Voting...................................................35
      Section 8.7   Quorum; Actions..........................................36

ARTICLE IX. SUPPLEMENTAL INDENTURES..........................................36

      Section 9.1   Supplemental Indentures without Consent of
                    Securityholders..........................................36
      Section 9.2   Supplemental Indentures with Consent of
                    Securityholders..........................................37
      Section 9.3   Effect of Supplemental Indentures........................38
      Section 9.4   Notation on Debentures...................................38
      Section 9.5   Evidence of Compliance of Supplemental Indenture to be
                    Furnished to Trustee.....................................39

ARTICLE X. REDEMPTION OF SECURITIES..........................................39

      Section 10.1  Optional Redemption......................................39
      Section 10.2  Special Event Redemption.................................39
      Section 10.3  Notice of Redemption; Selection of Debentures............39
      Section 10.4  Payment of Debentures Called for Redemption..............40

<PAGE>

ARTICLE XI. CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE................40

      Section 11.1  Company May Consolidate, etc., on Certain Terms..........40
      Section 11.2  Successor Entity to be Substituted.......................40
      Section 11.3  Opinion of Counsel to be Given to Trustee................41

ARTICLE XII. SATISFACTION AND DISCHARGE OF INDENTURE.........................41

      Section 12.1  Discharge of Indenture...................................41
      Section 12.2  Deposited Moneys to be Held in Trust by Trustee..........42
      Section 12.3  Paying Agent to Repay Moneys Held........................42
      Section 12.4  Return of Unclaimed Moneys...............................42

ARTICLE  XIII.  IMMUNITY OF  INCORPORATORS,  STOCKHOLDERS,  OFFICERS AND
                DIRECTORS....................................................42

      Section 13.1  Indenture and Debentures Solely Corporate Obligations....42

ARTICLE XIV. MISCELLANEOUS PROVISIONS........................................42

      Section 14.1  Successors...............................................42
      Section 14.2  Official Acts by Successor Entity........................42
      Section 14.3  Surrender of Company Powers..............................43
      Section 14.4  Addresses for Notices, etc...............................43
      Section 14.5  Governing Law............................................43
      Section 14.6  Evidence of Compliance with Conditions Precedent.........43
      Section 14.7  Non-Business Days........................................43
      Section 14.8  Table of Contents, Headings, etc.........................44
      Section 14.9  Execution in Counterparts................................44
      Section 14.10 Separability.............................................44
      Section 14.11 Assignment...............................................44
      Section 14.12 Acknowledgment of Rights.................................44

ARTICLE XV. SUBORDINATION OF DEBENTURES......................................44

      Section 15.1  Agreement to Subordinate.................................44
      Section 15.2  Default on Senior Indebtedness...........................45
      Section 15.3  Liquidation, Dissolution, Bankruptcy.....................45
      Section 15.4  Subrogation..............................................46
      Section 15.5  Trustee to Effectuate Subordination......................47
      Section 15.6  Notice by the Company....................................47
      Section 15.7  Rights of the Trustee; Holders of Senior Indebtedness....47
      Section 15.8  Subordination May Not Be Impaired........................48

Exhibit A   Form of Junior Subordinated Deferrable Interest Debenture


<PAGE>

     THIS  INDENTURE,  dated as of July  31,  2001,  between  BNCCORP,  Inc.,  a
Delaware corporation (the "Company"), and State Street Bank and Trust Company of
Connecticut,  National  Association,  a national banking  association  organized
under the laws of the  United  States of  America,  as  debenture  trustee  (the
"Trustee"),

                                   WITNESSETH:

     WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the  issuance of its  Floating  Rate  Junior  Subordinated  Deferrable  Interest
Debentures due 2031 (the  "Debentures")  under this Indenture to provide,  among
other things, for the execution and authentication,  delivery and administration
thereof, the Company has duly authorized the execution of this Indenture; and

     WHEREAS,  all acts and  things  necessary  to make this  Indenture  a valid
agreement according to its terms, have been done and performed;

     NOW, THEREFORE, This Indenture Witnesseth:

     In consideration of the premises, and the purchase of the Debentures 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
Debentures as follows:

                                   ARTICLE I.
                                  DEFINITIONS
                                  -----------


     Section 1.1. Definitions.  The terms defined in this Section 1.1 (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 1.1. 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.

     "Additional  Interest"  means  interest,  if any,  that shall accrue on any
interest  on the  Debentures  the  payment  of which  has not  been  made on the
applicable  Interest  Payment Date and which shall accrue at the Interest  Rate,
compounded quarterly (to the extent permitted by law).

     "Additional Junior  Indebtedness" means, without duplication and other than
the Debentures, any indebtedness,  liabilities or obligations of the Company, or
any Affiliate of the Company, under debt securities (or guarantees in respect of
debt  securities)  initially  issued  to any  trust,  or a  trustee  of a trust,
partnership  or other entity  affiliated  with the Company that is,  directly or
indirectly, a finance subsidiary (as such term is defined in Rule 3a-5 under the
Investment Company Act of 1940) or other financing vehicle of the Company or any
Affiliate  of the  Company in  connection  with the  issuance  by that entity of
preferred securities or other securities that are eligible to qualify for Tier 1
capital  treatment (or its then equivalent) for purposes of the capital adequacy
guidelines  of the  Federal  Reserve,  as then in effect and  applicable  to the
Company  (or,  if the Company is not a bank  holding  company,  such  guidelines
applied  to the  Company as if the  Company  were  subject to such  guidelines);
provided, however, that the inability of the Company to treat all or any portion
of the Additional Junior  Indebtedness as Tier 1 capital shall not disqualify it
as Additional  Junior  Indebtedness  if such inability  results from the Company
having   cumulative   preferred  stock,   minority   interests  in  consolidated
subsidiaries,  or any other  class of  security  or  interest  which the Federal

<PAGE>

Reserve now or may  hereafter  accord Tier 1 capital  treatment  (including  the
Debentures)  in excess of the amount  which may qualify for  treatment as Tier 1
capital under applicable capital adequacy guidelines.

     "Additional Sums" has the meaning set forth in Section 3.6.

     "Affiliate"  has the same  meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.

     "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.

     "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 New York City or Hartford,  Connecticut  are
permitted or required by any applicable law to close.

     "Capital  Securities" means undivided beneficial interests in the assets of
BNC Statutory  Trust II which rank pari passu with Common  Securities  issued by
the Trust;  provided,  however,  that upon the occurrence of an Event of Default
(as defined in the Declaration), the rights of holders of such Common Securities
to payment in respect of distributions and payments upon liquidation, redemption
and  otherwise  are  subordinated  to the  rights  of  holders  of such  Capital
Securities.

     "Capital  Securities  Guarantee"  means the  guarantee  agreement  that the
Company  enters into with State  Street Bank and Trust  Company of  Connecticut,
National  Association,  as guarantee  trustee,  or other  Persons that  operates
directly or indirectly  for the benefit of holders of Capital  Securities of the
Trust.

     "Capital Treatment Event" means the receipt by the Company of an opinion of
counsel  experienced  in such matters that, as a result of the occurrence of any
amendment to, or change  (including  any announced  prospective  change) in, the
laws of the United States or any political subdivision thereof or therein, or as
the result of any official or administrative pronouncement or action or decision
interpreting  or applying such laws,  rules or  regulations,  which amendment or
change is effective or which  pronouncement,  action or decision is announced on
or  after  the  date of  issuance  of the  Debentures,  there  is  more  than an
insubstantial  risk that the  Company  will not be  entitled  to treat an amount
equal to the aggregate  Liquidation Amount of the Debentures as "Tier 1 Capital"
(or its then equivalent) for purposes of the capital adequacy  guidelines of the
Federal  Reserve,  as then in effect and  applicable  to the  Company (or if the
Company is not a bank holding company, such guidelines applied to the Company as
if the Company were subject to such  guidelines);  provided,  however,  that the
inability of the Company to treat all or any portion of the  Liquidation  Amount
of the Debentures as Tier 1 Capital shall not constitute the basis for a Capital
Treatment  Event if such inability  results from the Company  having  cumulative
preferred stock, minority interests in consolidated  subsidiaries,  or any other
class of security or interest  which the Federal  Reserve or OTS, as applicable,
now or may  hereafter  accord Tier 1 Capital  treatment  in excess of the amount
which may qualify  for  treatment  as Tier 1 Capital  under  applicable  capital
adequacy  guidelines;  provided  further,  however,  that  the  distribution  of

<PAGE>

Debentures in connection  with the  dissolution of the Trust shall not in and of
itself  constitute a Capital  Treatment Event unless such dissolution shall have
occurred in connection with a Tax Event or an Investment Company Event.

     "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.

     "Common Securities" means undivided  beneficial  interests in the assets of
the Trust  which rank pari passu with  Capital  Securities  issued by the Trust;
provided,  however,  that upon the occurrence of an Event of Default (as defined
in the Declaration),  the rights of holders of such Common Securities to payment
in respect of  distributions  and  payments  upon  liquidation,  redemption  and
otherwise are subordinated to the rights of holders of such Capital Securities.

     "Company" means BNCCORP, Inc., a Delaware corporation,  and, subject to the
provisions of Article XI, shall include its successors and assigns.

     "Coupon Rate" has the meaning set forth in Section 2.8.

     "Debenture" or "Debentures"  has the meaning stated in the first recital of
this Indenture.

     "Debenture Register" has the meaning specified in Section 2.5.

     "Declaration"  means the Amended and Restated  Declaration  of Trust of the
Trust, as amended or supplemented from time to time.

     "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 2.8.

     "Distribution Period" has the meaning set forth in Section 2.8.

     "Determination Date" has the meaning set forth in Section 2.10.

     "Event of Default" means any event specified in Section 5.1,  continued for
the period of time, if any, and after the giving of the notice,  if any, therein
designated.

     "Extension Period" has the meaning set forth in Section 2.11.

     "Federal  Reserve"  means the Board of  Governors  of the  Federal  Reserve
System and any  successor  federal  agency  that is  primarily  responsible  for
regulating the activities of bank holding companies.

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

     "Institutional Trustee" has the meaning set forth in the Declaration.

     "Interest  Payment  Date," means each October 31,  January 31, April 30 and
July 31 during the term of this Indenture.

     "Interest Rate" means for the period  beginning on (and including) the date
of original issuance and ending on (but excluding) October 31, 2001 the rate per
annum of 7.29% and for each Distribution Period thereafter, the Coupon Rate.

<PAGE>

     "Investment  Company  Event" means the receipt by the Company and the Trust
of an opinion of counsel  experienced  in such matters to the effect that,  as a
result of the  occurrence  of a change in law or  regulation  or written  change
(including any announced prospective change) in interpretation or application of
law or  regulation  by any  legislative  body,  court,  governmental  agency  or
regulatory authority, there is more than an insubstantial risk that the Trust is
or will be considered an "investment  company" that is required to be registered
under the Investment Company Act of 1940, as amended which change or prospective
change becomes  effective or would become  effective,  as the case may be, on or
after the date of the issuance of the Debentures.

     "Liquidation  Amount"  means  the  stated  amount of $  1,000.00  per Trust
Security.

     "Maturity Date" means July 31, 2031.

     "Officers'  Certificate"  means a certificate signed by the Chairman of the
Board,  the Vice  Chairman,  the  President,  any Managing  Director or any Vice
President,  and by 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 14.6 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 may be other  counsel
reasonably  satisfactory  to the Trustee.  Each such opinion  shall  include the
statements  provided  for in Section  14.6 if and to the extent  required by the
provisions of such Section.

     "OTS"  means the Office of Thrift  Supervision  and any  successor  federal
agency that is primarily  responsible  for  regulating the activities of savings
and loan holding companies.

     The term  "outstanding,"  when used with  reference to  Debentures,  means,
subject to the  provisions  of  Section  7.4,  as of any  particular  time,  all
Debentures  authenticated  and  delivered  by the Trustee or the  Authenticating
Agent under this Indenture, except:

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

     (b) Debentures, 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,  however,  that, if such  Debentures,  or portions
thereof, are to be redeemed prior to maturity thereof, notice of such redemption
shall have been given as provided in Section 10.3 or provision  satisfactory  to
the Trustee shall have been made for giving such notice;

     (c)  Debentures  paid  pursuant  to  Section  2.6  or  in  lieu  of  or  in
substitution  for which  other  Debentures  shall  have been  authenticated  and
delivered  pursuant to the terms of Section 2.6 unless proof satisfactory to the
Company and the Trustee is presented  that any such  Debentures are held by bona
fide holders in due course; and

     (d) Debentures held in accordance with Section 7.4 hereof.

     "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.

<PAGE>

     "Predecessor  Security" of any  particular  Debenture  means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular  Debenture;  and, for the purposes of this definition,  any Debenture
authenticated  and delivered  under Section 2.6 in lieu of a lost,  destroyed or
stolen  Debenture  shall  be  deemed  to  evidence  the same  debt as the  lost,
destroyed or stolen Debenture.

     "Principal  Office of the Trustee," or other similar term, means the office
of the Trustee,  at which at any  particular  time its corporate  trust business
shall be  principally  administered,  which at the time of the execution of this
Indenture  shall be 225 Asylum Street,  Goodwin  Square,  Hartford,  Connecticut
06103.

     "Redemption Date" has the meaning set forth in Section 10.1.

     "Redemption Price" means the price set forth in the following table for any
Redemption  Date that occurs  within the  twelve-month  period  beginning in the
relevant  year  indicated  below,  expressed as the  percentage of the principal
amount of the Debentures being redeemed:

<TABLE>
<CAPTION>
               Year Beginning             Percentage
               --------------             ----------
               <S>                        <C>
               July 31, 2006                107.5%
               July 31, 2007                106.0%
               July 31, 2008                104.5%
               July 31, 2009                103.0%
               July 31, 2010                101.5%
               July 31, 2011 and after      100%
</TABLE>

     plus accrued and unpaid interest on such Debentures to the Redemption Date.

     "Responsible  Officer"  means,  with  respect to the  Trustee,  any officer
within the Principal Office of the Trustee,  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
Trust 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.

     "Securities  Act" means the Securities Act of 1933, as amended from time to
time or any successor legislation.

     "Securityholder," "holder of Debentures," or other similar terms, means any
Person in whose name at the time a  particular  Debenture is  registered  on the
register kept by the Company or the Trustee for that purpose in accordance  with
the terms hereof.

     "Senior   Indebtedness"  means,  with  respect  to  the  Company,  (i)  the
principal,  premium,  if any, and interest in respect of (A) indebtedness of the
Company  for  money  borrowed  and (B)  indebtedness  evidenced  by  securities,
debentures,  notes,  bonds or other similar  instruments  issued by the Company;
(ii) all capital lease obligations of the Company;  (iii) all obligations of the

<PAGE>

Company  issued or assumed  as the  deferred  purchase  price of  property,  all
conditional  sale  obligations of the Company and all obligations of the Company
under any title retention agreement; (iv) all obligations of the Company for the
reimbursement  of any letter of credit,  any banker's  acceptance,  any security
purchase facility, any repurchase agreement or similar arrangement, any interest
rate swap, any other hedging  arrangement,  any obligation  under options or any
similar credit or other transaction; (v) all obligations of the type referred to
in clauses (i) through (iv) above of other  Persons for the payment of which the
Company is  responsible or liable as obligor,  guarantor or otherwise;  and (vi)
all  obligations  of the type  referred  to in clauses  (i) through (v) above of
other  Persons  secured  by any lien on any  property  or  asset of the  Company
(whether or not such obligation is assumed by the Company),  whether incurred on
or prior to the date of this Indenture or thereafter  incurred.  Notwithstanding
the foregoing, "Senior Indebtedness" shall not include (1) any Additional Junior
Indebtedness, (2) Debentures issued pursuant to this Indenture and guarantees in
respect of such Debentures, (3) trade accounts payable of the Company arising in
the ordinary course of business (such trade accounts payable being pari passu in
right of payment to the  Debentures),  or (4) obligations  with respect to which
(a) in the  instrument  creating or evidencing the same or pursuant to which the
same is outstanding, it is provided that such obligations are pari passu, junior
or  otherwise  not  superior in right of payment to the  Debentures  and (b) the
Company,  prior to the issuance  thereof,  has notified  (and,  if then required
under the applicable  guidelines of the regulating entity, has received approval
from) the Federal Reserve (if the Company is a bank holding  company) or the OTS
(if the  Company is a savings and loan  holding  company).  Senior  Indebtedness
shall continue to be Senior  Indebtedness  and be entitled to the  subordination
provisions irrespective of any amendment,  modification or waiver of any term of
such Senior Indebtedness.

     "Special  Event"  means any of a Capital  Treatment  Event,  an  Investment
Company Event or a Tax Event.

     "Special Redemption Date" has the meaning set forth in Section 10.2.

     "Special  Redemption  Price"  means (i) if the Special  Redemption  Date is
before July 31, 2006, an amount in cash equal to 107.5% of the principal  amount
of the  Debentures  to be  prepaid,  plus  accrued  and unpaid  interest on such
Debentures to such Special  Redemption  Date, or (ii) if the Special  Redemption
Date is on or after July 31, 2006, the price for the Debentures set forth in the
table under the  definition of  "Redemption  Price" for such Special  Redemption
Date,  plus  accrued and unpaid  interest  on such  Debentures  to such  Special
Redemption Date.

     "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 by 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 by 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.

     "Tax Event" means the receipt by the Company and the Trust of an opinion of
counsel  experienced  in such  matters  to the effect  that,  as a result of any
amendment to or change (including any announced  prospective change) in the laws
or any regulations  thereunder of the United States or any political subdivision
or  taxing  authority  thereof  or  therein,  or as a  result  of  any  official
administrative  pronouncement  (including any private  letter ruling,  technical
advice  memorandum,  field  service  advice,  regulatory  procedure,  notice  or

<PAGE>

announcement,  including  any  notice or  announcement  of intent to adopt  such
procedures or regulations  (an  "Administrative  Action")) or judicial  decision
interpreting  or applying such laws or  regulations,  regardless of whether such
Administrative  Action or judicial decision is issued to or in connection with a
proceeding  involving  the  Company or the Trust and  whether or not  subject to
review or appeal, which amendment, clarification,  change, Administrative Action
or decision is enacted,  promulgated or announced,  in each case on or after the
date of issuance of the  Debentures,  there is more than an  insubstantial  risk
that:  (i) the Trust is, or will be within 90 days of the date of such  opinion,
subject to United States federal  income tax with respect to income  received or
accrued  on  the  Debentures;  (ii)  interest  payable  by  the  Company  on the
Debentures is not, or within 90 days of the date of such  opinion,  will not be,
deductible by the Company, in whole or in part, for United States federal income
tax  purposes;  or (iii)  the Trust is, or will be within 90 days of the date of
such opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.

     "3-Month LIBOR" has the meaning set forth in Section 2.10.

     "Telerate Page 3750" has the meaning set forth in Section 2.10.

     "Trust" shall mean BNC Statutory Trust II, a Connecticut  statutory  trust,
or any other similar trust created for the purpose of issuing Capital Securities
in connection with the issuance of Debentures under this Indenture, of which the
Company is the sponsor.

     "Trust  Securities" means Common  Securities and Capital  Securities of the
Trust.

     "Trustee"  means  State  Street  Bank and  Trust  Company  of  Connecticut,
National Association, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder.

                                  ARTICLE II.
                                  DEBENTURES
                                  ----------

     Section 2.1.  Authentication and Dating. Upon the execution and delivery of
this  Indenture,  or from time to time  thereafter,  Debentures  in an aggregate
principal  amount not in excess of $15,464,000  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  Debentures to or upon the
written order of the Company,  signed by its Chairman of the Board of Directors,
Vice Chairman,  the President,  one of its Managing Directors or one of its Vice
Presidents   without  any  further   action  by  the   Company   hereunder.   In
authenticating  such Debentures,  and accepting the additional  responsibilities
under this  Indenture  in relation  to such  Debentures,  the  Trustee  shall be
entitled to receive,  and (subject to Section  6.1) shall be fully  protected in
relying upon:

     (a) 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 of
the Company, as the case may be; and

     (b) an Opinion of Counsel  prepared in  accordance  with Section 14.6 which
shall also state:

          (1) that such  Debentures,  when  authenticated  and  delivered by the
     Trustee and issued by the Company in each case in the manner and subject to
     any conditions specified in such Opinion of Counsel,  will constitute valid
     and legally  binding  obligations of the Company,  subject to or limited by
     applicable   bankruptcy,   insolvency,   reorganization,   conservatorship,
     receivership, moratorium and other statutory or decisional laws relating to
     or  affecting   creditors'  rights  or  the   reorganization  of  financial
     institutions  (including,  without  limitation,  preference  and fraudulent

<PAGE>

     conveyance or transfer laws), heretofore or hereafter enacted or in effect,
     affecting the rights of creditors generally; and

          (2) that all laws and  requirements  in respect of the  execution  and
     delivery by the Company of the Debentures  have been complied with and that
     authentication  and  delivery of the  Debentures  by the  Trustee  will not
     violate the terms of this Indenture.

     The Trustee shall have the right to decline to authenticate and deliver any
Debentures  under  this  Section  if the  Trustee,  being  advised in writing 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 holders.

     The definitive Debentures 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  Debentures,  as evidenced by their
execution of such Debentures.

     Section 2.2. Form of Trustee's Certificate of Authentication. The Trustee's
certificate of  authentication  on all Debentures shall be in substantially  the
following form:

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

     State Street Bank and Trust Company of Connecticut,  National  Association,
as Trustee

     By ----------------------------------
     Authorized Signer

     Section 2.3. Form and  Denomination of Debentures.  The Debentures shall be
in registered, certificated form without coupons and in minimum denominations of
$500,000.00  and any  multiple of  $1,000.00 in excess  thereof.  Any  attempted
transfer of the  Debentures in a block having an aggregate  principal  amount of
less  than  $500,000.00  shall be deemed  to be  voided  and of no legal  effect
whatsoever.  Any such purported transferee shall be deemed not to be a holder of
such  Debentures for any purpose,  including,  but not limited to the receipt of
payments on such  Debentures,  and such purported  transferee shall be deemed to
have no  interest  whatsoever  in  such  Debentures.  The  Debentures  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 2.4. Execution of Debentures. The Debentures 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,  Vice  Chairman,  President,  one of its
Managing  Directors  or  one of  its  Executive  Vice  Presidents,  Senior  Vice
Presidents  or Vice  Presidents.  Only such  Debentures  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 signer,  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  Debenture  executed  by the  Company  shall be
conclusive   evidence  that  the  Debenture  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
Debentures  shall cease to be such officer before the Debentures so signed shall
have been  authenticated  and  delivered  by the  Trustee or the  Authenticating
Agent,  or disposed  of by the  Company,  such  Debentures  nevertheless  may be

<PAGE>

authenticated  and delivered or disposed of as though the Person who signed such
Debentures  had not ceased to be such officer of the Company;  and any Debenture
may be signed on behalf of the Company by such Persons as, at the actual date of
the execution of such  Debenture,  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 Debenture shall be dated the date of its authentication.

     Section  2.5.  Exchange and  Registration  of Transfer of  Debentures.  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 3.2,
a register (the  "Debenture  Register") for the Debentures  issued  hereunder in
which, subject to such reasonable  regulations as it may prescribe,  the Company
shall  provide for the  registration  and transfer of all  Debentures as in this
Article II provided.  The Debenture  Register shall be in written form or in any
other form  capable of being  converted  into  written  form within a reasonable
time.

     Debentures to be exchanged may be  surrendered  at the principal  corporate
trust office of the Trustee or at any office or agency to be  maintained  by the
Company  for such  purpose as  provided in Section  3.2,  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 Debenture or Debentures which the  Securityholder  making
the exchange shall be entitled to receive. Upon due presentment for registration
of transfer of any  Debenture  at the  principal  corporate  trust office of the
Trustee or at any office or agency of the Company maintained for such purpose as
provided in Section 3.2, 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  Debenture  for  a  like  aggregate   principal   amount.   Registration  or
registration  of transfer of any Debenture by the Trustee or by any agent of the
Company appointed pursuant to Section 3.2, and delivery of such Debenture, shall
be deemed to  complete  the  registration  or  registration  of transfer of such
Debenture.

     All Debentures  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
the  Trustee  or the  Authenticating  Agent duly  executed  by the holder or his
attorney duly authorized in writing.

     No  service  charge  shall  be made for any  exchange  or  registration  of
transfer of Debentures,  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.

     The Company or the Trustee  shall not be required to exchange or register a
transfer of any  Debenture  for a period of 15 days next  preceding  the date of
selection of Debentures for redemption.

     Notwithstanding  anything  herein to the  contrary,  Debentures  may not be
transferred except in compliance with the restricted securities legend set forth
below,  unless otherwise  determined by the Company,  upon the advice of counsel
expert in securities law, in accordance with applicable law:

     THIS SECURITY HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT"),  ANY  STATE  SECURITIES  LAWS  OR  ANY  OTHER
APPLICABLE   SECURITIES   LAW.   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

<PAGE>

REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE
HOLDER OF THIS  SECURITY  BY ITS  ACCEPTANCE  HEREOF  AGREES  TO OFFER,  SELL OR
OTHERWISE  TRANSFER  THIS  SECURITY  ONLY (A) TO THE COMPANY,  (B) PURSUANT TO A
REGISTRATION  STATEMENT  THAT HAS BEEN DECLARED  EFFECTIVE  UNDER THE SECURITIES
ACT,  (C) TO A  PERSON  WHOM  THE  SELLER  REASONABLY  BELIEVES  IS A  QUALIFIED
INSTITUTIONAL  BUYER IN A TRANSACTION  MEETING THE  REQUIREMENTS OF RULE 144A SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE
WITH  RULE  144A,  (D)  TO A  NON-U.S.  PERSON  IN AN  OFFSHORE  TRANSACTION  IN
ACCORDANCE  WITH RULE 903 OR RULE 904 (AS  APPLICABLE) OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPH  (A) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SECURITY  FOR  ITS OWN  ACCOUNT,  OR FOR THE  ACCOUNT  OF SUCH AN  INSTITUTIONAL
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,  OR (F)  PURSUANT  TO ANY OTHER  AVAILABLE  EXEMPTION  FROM THE
REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT
PRIOR TO ANY SUCH OFFER,  SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL,  CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM
IN  ACCORDANCE  WITH THE  INDENTURE,  A COPY OF WHICH MAY BE  OBTAINED  FROM THE
COMPANY.

     THE  HOLDER  OF  THIS  SECURITY  BY  ITS  ACCEPTANCE  HEREOF  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
EMPLOYMENT  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 THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH
PURCHASER  OR HOLDER IS  ELIGIBLE  FOR  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 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 THE
SECURITIES  OR ANY INTEREST  THEREIN WILL BE DEEMED TO HAVE  REPRESENTED  BY ITS
PURCHASE AND HOLDING THEREOF 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 WILL NOT RESULT IN A PROHIBITED  TRANSACTION UNDER SECTION 406 OR ERISA
OR  SECTION  4975 OF THE CODE FOR  WHICH  THERE IS NO  APPLICABLE  STATUTORY  OR
ADMINISTRATIVE EXEMPTION.

     THIS SECURITY WILL BE ISSUED AND MAY BE  TRANSFERRED  ONLY IN BLOCKS HAVING
AN AGGREGATE  PRINCIPAL  AMOUNT OF NOT LESS THAN  $500,000.00  AND  MULTIPLES OF
$1,000.00 IN EXCESS THEREOF.  ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK
HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $500,000.00 SHALL BE DEEMED TO
BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.

<PAGE>

     THE HOLDER OF THIS  SECURITY  AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

     Section 2.6. Mutilated,  Destroyed,  Lost or Stolen Debentures. In case any
Debenture 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 Debenture bearing a number not contemporaneously  outstanding, in
exchange and  substitution  for the  mutilated  Debenture,  or in lieu of and in
substitution for the Debenture so destroyed,  lost or stolen.  In every case the
applicant  for a  substituted  Debenture  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  Debenture  and of the  ownership
thereof.

     The Trustee may authenticate any such substituted Debenture and deliver the
same upon the written  request or  authorization  of any officer of the Company.
Upon the  issuance  of any  substituted  Debenture,  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 Debenture 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 Debenture, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
Debenture)  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 Debenture and of the ownership thereof.

     Every  substituted  Debenture  issued  pursuant to the  provisions  of this
Section 2.6 by virtue of the fact that any such Debenture is destroyed,  lost or
stolen shall  constitute  an additional  contractual  obligation of the Company,
whether or not the  destroyed,  lost or stolen  Debenture  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  Debentures duly issued  hereunder.  All
Debentures  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
Debentures   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 2.7.  Temporary  Debentures.  Pending the preparation of definitive
Debentures,  the Company may execute and the Trustee shall authenticate and make
available  for  delivery  temporary   Debentures  that  are  typed,  printed  or
lithographed.   Temporary   Debentures  shall  be  issuable  in  any  authorized
denomination, and substantially in the form of the definitive Debentures in lieu
of which they are issued but with such  omissions,  insertions and variations as
may be  appropriate  for temporary  Debentures,  all as may be determined by the
Company.  Every such temporary Debenture 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  Debentures.  Without
unreasonable  delay the Company  will  execute and deliver to the Trustee or the
Authenticating  Agent  definitive  Debentures and thereupon any or all temporary
Debentures may be surrendered in exchange therefor,  at the principal  corporate
trust office of the Trustee or at any office or agency maintained by the Company
for  such   purpose  as  provided  in  Section  3.2,  and  the  Trustee  or  the
Authenticating  Agent shall  authenticate  and make  available  for  delivery in
exchange for such temporary Debentures a like aggregate principal amount of such
definitive  Debentures.  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

<PAGE>

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 Debentures shall
in all  respects  be  entitled  to the same  benefits  under this  Indenture  as
definitive Debentures authenticated and delivered hereunder.

     Section 2.8. Payment of Interest and Additional  Interest.  Interest at the
Interest Rate and any Additional Interest on any Debenture that is payable,  and
is  punctually  paid or duly  provided  for, on any  Interest  Payment  Date for
Debentures  shall be paid to the Person in whose name said  Debenture (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 and any
Additional  Interest payable on the Maturity Date shall be paid to the Person to
whom  principal is paid. In the event that any  Debenture or portion  thereof is
called for redemption and the redemption  date is subsequent to a regular record
date with  respect  to any  Interest  Payment  Date and  prior to such  Interest
Payment Date,  interest on such  Debenture  will be paid upon  presentation  and
surrender of such Debenture.

     Each  Debenture  shall  bear  interest  for the  period  beginning  on (and
including) the date of original  issuance and ending on (but excluding)  October
31,  2001 at a rate  per  annum of  7.29%,  and  shall  bear  interest  for each
successive  period  beginning  on (and  including)  October 31,  2001,  and each
succeeding  Interest  Payment  Date,  and  ending  on (but  excluding)  the next
succeeding  Interest Payment Date (each, a "Distribution  Period") at a rate per
annum equal to the 3-Month LIBOR,  determined as described in Section 2.10, plus
3.58%;  provided,  however,  that prior to July 31, 2011, such annual rate shall
not exceed 12.50% (the "Coupon Rate") applied to the principal  amount  thereof,
until  the  principal  thereof  becomes  due  and  payable,  and on any  overdue
principal and to the extent that payment of such interest is  enforceable  under
applicable law (without  duplication) on any overdue  installment of interest at
the Interest Rate compounded  quarterly.  Interest shall be payable  (subject to
any relevant  Extension  Period)  quarterly in arrears on each Interest  Payment
Date with the first installment of interest to be paid on October 31, 2001.

     Any interest on any  Debenture,  other than  Additional  Interest,  that is
payable,  but is not  punctually  paid or duly  provided  for,  on any  Interest
Payment Date (herein called  "Defaulted  Interest")  shall forthwith cease to be
payable to the registered  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  Debentures  (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 at least
25 days prior to the date of the  proposed  payment  of the amount of  Defaulted
Interest proposed to be paid on each such Debenture 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  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 in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such  Defaulted  Interest which shall not
be more than 15 nor less than 10 days prior to the date of the proposed  payment
and not less than 10 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  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 its address as it appears in the  Debenture  Register,  not less than 10 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 Debentures (or their respective  Predecessor  Securities) are registered on
such special record date and shall be no longer payable.

<PAGE>

     The Company may make payment of any Defaulted Interest on any Debentures in
any other lawful  manner after notice given by the Company to the Trustee of the
proposed payment method;  provided,  however, the Trustee in its sole discretion
deems such payment method to be practical.

     Any  interest  scheduled  to become  payable on an  Interest  Payment  Date
occurring during an Extension  Period shall not be Defaulted  Interest and shall
be  payable  on  such  other  date  as may be  specified  in the  terms  of such
Debentures.

     The term "regular record date" as used in this Section shall mean the close
of business on the 15th day next preceding the applicable Interest Payment Date.

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

     Section  2.9.   Cancellation  of  Debentures   Paid,  etc.  All  Debentures
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 Debentures  shall be issued in lieu thereof except as expressly  permitted by
any  of the  provisions  of  this  Indenture.  All  Debentures  canceled  by any
Authenticating  Agent shall be  delivered  to the  Trustee.  The  Trustee  shall
destroy all canceled Debentures unless the Company otherwise directs the Trustee
in writing.  If the Company shall acquire any of the Debentures,  however,  such
acquisition   shall  not  operate  as  a  redemption  or   satisfaction  of  the
indebtedness  represented  by such  Debentures  unless  and  until  the same are
surrendered to the Trustee for cancellation.

     Section 2.10.  Computation of Interest Rate. The amount of interest payable
for any period  shall be computed  on the basis of actual  number of days in the
Distribution  Period  concerned  divided  by 360.  In the event that any date on
which  interest is payable on the Debentures is not a Business Day, then payment
of interest  payable on such date shall be made on the next succeeding day which
is a Business Day (and  without any interest or other  payment in respect of any
such  delay),  except  that,  if such  Business  Day is in the  next  succeeding
calendar year, such payment shall be made on the immediately  preceding Business
Day,  in each  case with the same  force and  effect as if made on the date such
payment  was  originally  payable.  The  amount  of  interest  payable  for  the
Distribution   Period  commencing  on  October  31,  2001  and  each  succeeding
Distribution  Period will be  calculated  by applying the  Interest  Rate to the
principal amount outstanding at the commencement of the Distribution  Period and
multiplying  each such amount by the actual  number of days in the  Distribution
Period concerned divided by 360. All percentages resulting from any calculations
on  the  Debentures  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).

     (a)  "3-Month   LIBOR"  means  the  London   interbank   offered  rate  for
three-month,  Eurodollar  deposits  determined  by the Trustee in the  following
order of priority:

          (1) the rate  (expressed  as a  percentage  per annum) for  Eurodollar
     deposits  having a three-month  maturity that appears on Telerate Page 3750
     as of 11:00 a.m.  (London time) on the  particular  Determination  Date (as
     defined below).  "Telerate Page 3750" means the display designated as "Page
     3750" on the Dow Jones  Telerate  Service or such other page as may replace
     Page 3750 on that  service or such  other  service  or  services  as may be

<PAGE>

     nominated by the British Bankers' Association as the information vendor for
     the purpose of displaying  London interbank  offered rates for U.S. dollars
     deposits;

          (2) if such rate does not  appear  on  Telerate  Page 3750 as of 11:00
     a.m.  (London time) on the  Determination  Date,  3-Month LIBOR will be the
     arithmetic  mean of the rates  (expressed  as  percentages  per  annum) for
     Eurodollar  deposits  having a three-month  maturity that appear on Reuters
     Monitor  Money  Rates  Page LIBO  ("Reuters  Page  LIBO") as of 11:00  a.m.
     (London time) on such Determination Date;

          (3) if such rate does not appear on Reuters Page LIBO as of 11:00 a.m.
     (London time) on the related  Determination  Date, the Trustee will request
     the principal  London offices of four leading banks in the London interbank
     market to provide such banks' offered quotations  (expressed as percentages
     per annum) to prime  banks in the London  interbank  market for  Eurodollar
     deposits  having a three-month  maturity as of 11:00 a.m.  (London time) on
     such Determination  Date. If at least two quotations are provided,  3-Month
     LIBOR will be the arithmetic mean of such quotations;

          (4) if fewer than two such  quotations  are  provided as  requested in
     clause (3) above,  the Trustee  will request four major New York City banks
     to provide such banks' offered  quotations  (expressed as  percentages  per
     annum) to leading  European banks for loans in Eurodollars as of 11:00 a.m.
     (London time) on such  Determination  Date. If at least two such quotations
     are provided, 3-Month LIBOR will be the arithmetic mean of such quotations;
     and

          (5) if fewer than two such  quotations  are  provided as  requested in
     clause (4) above,  3-Month  LIBOR will be a 3-Month LIBOR  determined  with
     respect to the  Distribution  Period  immediately  preceding  such  current
     Distribution   Period.  If  the  rate  for  Eurodollar  deposits  having  a
     three-month  maturity  that  initially  appears  on  telerate  Page 3750 or
     Reuters Page LIBO,  as the case may be, as of 11:00 a.m.  (London  time) on
     the related  Determination  Date is superseded on the Telerate page 3750 or
     Reuters  Page LIBO,  as the case may be, by a corrected  rate by 12:00 noon
     (London time) on such  Determination  Date,  then the corrected  rate as so
     substituted on the applicable page will be the applicable 3-Month LIBOR for
     such Determination Date.

          (6) The Coupon  Rate for any  Distribution  Period  will at no time be
     higher than the maximum rate then permitted by New York law as the same may
     be modified by United States law.

          (7)  "Determination  Date"  means the date that is two London  Banking
     Days  (i.e.,  a day in which  dealings  in  deposits  in U.S.  dollars  are
     transacted  in  the  London  interbank  market)  preceding  the  particular
     Distribution Period for which a Coupon Rate is being determined.

     (b) The Trustee shall notify the Company, the Institutional Trustee and any
securities  exchange  or  interdealer  quotation  system  on which  the  Capital
Securities are listed,  of the Coupon Rate and the  Determination  Date for each
Distribution Period, in each case as soon as practicable after the determination
thereof  but in no  event  later  than the  seventh  (7th)  Business  Day of the
relevant  Distribution Period.  Failure to notify the Company, the Institutional
Trustee or any  securities  exchange or  interdealer  quotation  system,  or any
defect in said notice,  shall not affect the  obligation  of the Company to make
payment  on the  Debentures  at the  applicable  Coupon  Rate.  Any error in the
calculation of the Coupon Rate by the Institutional  Trustee may be corrected at
any time by notice delivered as above provided.  Upon the request of a holder of
a Debenture,  the Trustee  shall  provide the Coupon Rate then in effect and, if
determined, the Coupon Rate for the next Distribution Period.

<PAGE>

     (c) Subject to the  corrective  rights set forth above,  all  certificates,
communications, opinions, determinations, calculations, quotations and decisions
given,  expressed,  made or obtained for the purposes of the provisions relating
to the payment and  calculation of interest on the Debentures and  distributions
on the Capital  Securities by the Trustee or the Institutional  Trustee will (in
the  absence  of  willful  default,  bad  faith  and  manifest  error) be final,
conclusive  and binding on the Trust,  the Company and all of the holders of the
Debentures and the Capital Securities, and no liability shall (in the absence of
willful  default,  bad faith or  manifest  error)  attach to the  Trustee or the
Institutional  Trustee in connection with the exercise or non-exercise by either
of them or their respective powers, duties and discretion.

     Section 2.11.  Extension of Interest Payment Period. So long as no Event of
Default has occurred and is continuing,  the Company shall have the right,  from
time to time,  and  without  causing an Event of Default,  to defer  payments of
interest on the  Debentures  by  extending  the interest  payment  period on the
Debentures at any time and from time to time during the term of the  Debentures,
for up to 20 consecutive  quarterly periods (each such extended interest payment
period, an "Extension Period"),  during which Extension Period no interest shall
be due and payable. No Extension Period may end on a date other than an Interest
Payment Date. At the end of any such Extension  Period the Company shall pay all
interest then accrued and unpaid on the  Debentures  (together  with  Additional
Interest thereon); provided, however, that no Extension Period may extend beyond
the Maturity Date;  provided  further,  however,  that during any such Extension
Period,  the Company shall not and shall not permit any Affiliate to (i) declare
or pay any dividends or distributions on, or redeem, purchase,  acquire, or make
a liquidation  payment with respect to, any of the Company's or such Affiliate's
capital stock (other than payments of dividends or distributions to the Company)
or make any  guarantee  payments  with respect to the foregoing or (ii) make any
payment of principal of or interest or premium, if any, on or repay,  repurchase
or redeem any debt  securities  of the Company or any  Affiliate  that rank pari
passu in all respects with or junior in interest to the Debentures  (other than,
with respect to clauses (i) or (ii) above, (a) repurchases, redemptions or other
acquisitions  of shares of capital stock of the Company in  connection  with any
employment  contract,  benefit plan or other similar arrangement with or for the
benefit  of one or  more  employees,  officers,  directors  or  consultants,  in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection  with the  issuance of capital  stock of the  Company (or  securities
convertible  into or exercisable for such capital stock) as  consideration in an
acquisition  transaction entered into prior to the applicable  Extension Period,
(b) as a result  of any  exchange  or  conversion  of any class or series of the
Company's  capital  stock (or any capital  stock of a subsidiary of the Company)
for any class or series of the Company's capital stock or of any class or series
of the Company's  indebtedness for any class or series of the Company's  capital
stock,  (c) the  purchase of  fractional  interests  in shares of the  Company's
capital stock pursuant to the conversion or exchange  provisions of such capital
stock or the security  being  converted or exchanged,  (d) any  declaration of a
dividend in connection  with any  stockholder's  rights plan, or the issuance of
rights,  stock or other  property  under any  stockholder's  rights plan, or the
redemption  or repurchase of rights  pursuant  thereto,  (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock  issuable upon exercise of such  warrants,  options or other rights is the
same stock as that on which the  dividend is being paid or ranks pari passu with
or  junior to such  stock and any cash  payments  in lieu of  fractional  shares
issued in connection  therewith,  or (f) payments  under the Capital  Securities
Guarantee).  Prior to the termination of any Extension  Period,  the Company may
further  extend such period,  provided  that such period  together with all such
previous  and  further  consecutive  extensions  thereof  shall  not  exceed  20
consecutive  quarterly  periods,  or extend beyond the Maturity  Date.  Upon the
termination  of any  Extension  Period and upon the  payment of all  accrued and
unpaid  interest  and  Additional  Interest,  the  Company  may  commence  a new
Extension  Period,  subject  to  the  foregoing  requirements.  No  interest  or
Additional Interest shall be due and payable during an Extension Period,  except
at the end thereof,  but each  installment of interest that would otherwise have
been due and payable during such Extension Period shall bear Additional Interest
to the extent  permitted  by  applicable  law. The Company must give the Trustee
notice of its election to begin such  Extension  Period at least 5 Business Days

<PAGE>

prior to the earlier of (i) the date interest on the Debentures  would have been
payable except for the election to begin such Extension  Period or (ii) the date
such  interest is payable,  but in any event not less than 5 Business Days prior
to such record date. The Trustee shall give notice of the Company's  election to
begin a new Extension Period to the Securityholders.

     Section 2.12. CUSIP Numbers.  The Company in issuing the Debentures may use
"CUSIP"  numbers (if then  generally in use),  and, if so, the Trustee shall use
CUSIP  numbers in notices of redemption  as a  convenience  to  Securityholders;
provided, however, that any such notice may state that no representation is made
as to the  correctness of such numbers either as printed on the Debentures or as
contained in any notice of a redemption  and that reliance may be placed only on
the  other  identification  numbers  printed  on the  Debentures,  and any  such
redemption  shall not be affected by any defect in or omission of such  numbers.
The  Company  will  promptly  notify the Trustee in writing of any change in the
CUSIP numbers.

                                  ARTICLE III
                       PARTICULAR COVENANTS OF THE COMPANY

     Section 3.1. Payment of Principal,  Premium and Interest;  Agreed Treatment
of the Debentures.


     (a) The Company  covenants and agrees that it will duly and  punctually pay
or cause to be paid the  principal of and premium,  if any, and interest and any
Additional  Interest on the Debentures at the place, at the respective times and
in the manner provided in this Indenture and the Debentures. Each installment of
interest on the  Debentures  may be paid (i) by mailing checks for such interest
payable to the order of the holder of Debentures entitled thereto as they appear
on the  registry  books of the Company if a request for a wire  transfer has not
been  received  by the Company or (ii) by wire  transfer  to any account  with a
banking  institution  located in the United States designated in writing by such
Person  to  the  paying   agent  no  later  than  the   related   record   date.
Notwithstanding  the  foregoing,  so long as the holder of this Debenture is the
Institutional  Trustee,  the payment of the  principal  of and  interest on this
Debenture will be made in immediately  available funds at such place and to such
account as may be designated by the Institutional Trustee.

     (b) The Company will treat the Debentures as indebtedness,  and the amounts
payable in respect of the principal  amount of such Debentures as interest,  for
all United States federal  income tax purposes.  All payments in respect of such
Debentures  will be made free and clear of United States  withholding tax to any
beneficial  owner thereof that has provided an Internal  Revenue Service Form W8
BEN (or any substitute or successor  form)  establishing  its non-United  States
status for United States federal income tax purposes.

     (c) The  Company  has no present  intention  to  exercise  its right  under
Section 2.11 to defer  payments of interest on the  Debentures  by commencing an
Extension Period.

     (d) The Company  believes that the  likelihood  that it would  exercise its
right under  Section  2.11 to defer  payments of interest on the  Debentures  by
commencing  an  Extension  Period at any time during  which the  Debentures  are
outstanding is remote because of the  restrictions  that would be imposed on the
Company's ability to declare or pay dividends or distributions on, or to redeem,
purchase or make a liquidation  payment with respect to, any of its  outstanding
equity and on the  Company's  ability to make any  payments of  principal  of or
interest on, or repurchase or redeem,  any of its debt securities that rank pari
passu in all respects with (or junior in interest to) the Debentures.

     Section 3.2.  Offices for Notices and Payments,  etc. So long as any of the
Debentures   remain   outstanding,   the  Company  will  maintain  in  Hartford,

<PAGE>

Connecticut,  an office or agency  where the  Debentures  may be  presented  for
payment,  an  office  or  agency  where  the  Debentures  may be  presented  for
registration  of transfer and for exchange as in this Indenture  provided and an
office or agency where  notices and demands to or upon the Company in respect of
the Debentures 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 2.5,
such  office or  agency  for all of the above  purposes  shall be the  office or
agency of the  Trustee.  In case the  Company  shall fail to  maintain  any such
office or agency in Hartford,  Connecticut, 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 corporate trust 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 Hartford,  Connecticut,  where
the Debentures 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
Hartford,  Connecticut,  for the purposes above mentioned. The Company will give
to the Trustee  prompt  written  notice of any such  designation  or  rescission
thereof.

     Section  3.3.  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 6.9, a Trustee,  so that there
shall at all times be a Trustee hereunder.

     Section 3.4. 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 3.4,

          (1)  that it will  hold  all  sums  held by it as such  agent  for the
     payment of the  principal of and premium,  if any, or interest,  if any, on
     the Debentures (whether such sums have been paid to it by the Company or by
     any  other  obligor  on the  Debentures)  in trust for the  benefit  of the
     holders of the Debentures;

          (2) that it will give the Trustee prompt written notice of any failure
     by the  Company  (or by any other  obligor on the  Debentures)  to make any
     payment of the  principal of and premium,  if any, or interest,  if any, on
     the Debentures when the same shall be due and payable; and

          (3) 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 principal of and premium,  if any, or interest,  if any, on
the  Debentures,  set aside,  segregate and hold in trust for the benefit of the
holders of the  Debentures a sum  sufficient to pay such  principal,  premium or
interest 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  Debentures)  to make any payment of the principal of and premium,  if
any, or interest,  if any, on the Debentures  when the same shall become due and
payable.

<PAGE>

     Whenever  the  Company  shall  have  one or  more  paying  agents  for  the
Debentures,  it will,  on or prior  to each  due  date of the  principal  of and
premium, if any, or interest,  if any, on the Debentures,  deposit with a paying
agent a sum  sufficient  to pay the  principal,  premium or interest 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  3.4 to the  contrary  notwithstanding,  the
Company  may, at any time,  for the  purpose of  obtaining  a  satisfaction  and
discharge  with  respect to the  Debentures,  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
trusts herein contained.

     (d)  Anything in this  Section  3.4 to the  contrary  notwithstanding,  the
agreement  to hold sums in trust as provided  in this  Section 3.4 is subject to
Sections 12.3 and 12.4.

     Section  3.5.  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
Debentures 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 during such fiscal year by the
Company in the performance of any covenants 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 and states thereof.

     Section 3.6. Additional Sums. If and for so long as the Trust is the holder
of all Debentures and the Trust is required to pay any additional taxes, duties,
assessments  or other  governmental  charges  as a result  of a Tax  Event,  the
Company will pay such additional amounts  ("Additional  Sums") on the Debentures
as shall be required so that the net amounts  received and retained by the Trust
after paying taxes,  duties,  assessments or other governmental  charges will be
equal to the  amounts the Trust  would have  received if no such taxes,  duties,
assessments  or other  governmental  charges had been imposed.  Whenever in this
Indenture or the  Debentures  there is a reference in any context to the payment
of principal of or interest on the  Debentures,  such mention shall be deemed to
include  mention  of  payments  of the  Additional  Sums  provided  for in  this
paragraph to the extent that,  in such  context,  Additional  Sums are,  were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express  mention of the payment of Additional  Sums (if  applicable)  in any
provisions  hereof shall not be construed as excluding  Additional Sums in those
provisions  hereof where such express  mention is not made;  provided,  however,
that the deferral of the payment of interest during an Extension Period pursuant
to Section 2.11 shall not defer the payment of any  Additional  Sums that may be
due and payable.

     Section 3.7.  Compliance with  Consolidation  Provisions.  The Company will
not, while any of the Debentures remain outstanding,  consolidate with, or merge
into, or merge into itself,  or sell or convey all or  substantially  all of its
property  to any other  Person  unless the  provisions  of Article XI hereof are
complied with.

     Section 3.8. Limitation on Dividends. If Debentures are initially issued to
the Trust or a trustee of such trust in  connection  with the  issuance of Trust
Securities by the Trust (regardless of whether Debentures continue to be held by
such Trust) and (i) there shall have occurred and be  continuing  any event that
would constitute an Event of Default,  (ii) the Company shall be in default with
respect  to  its  payment  of  any  obligations  under  the  Capital  Securities
Guarantee, or (iii) the Company shall have given notice of its election to defer
payments of interest on the Debentures by extending the interest  payment period
as  provided  herein  and  such  period,  or any  extension  thereof,  shall  be
continuing, then the Company shall not, and shall not allow any Affiliate of the
Company to, (x) declare or pay any  dividends  or  distributions  on, or redeem,
purchase,  acquire,  or make a  liquidation  payment with respect to, any of the
Company's capital stock or its Affiliates' capital stock (other than payments of

<PAGE>

dividends or distributions  to the Company) or make any guarantee  payments with
respect to the  foregoing or (y) make any payment of principal of or interest or
premium,  if any, on or repay,  repurchase or redeem any debt  securities of the
Company or any Affiliate  that rank pari passu in all respects with or junior in
interest to the  Debentures  (other  than,  with  respect to clauses (x) and (y)
above, (1) repurchases,  redemptions or other  acquisitions of shares of capital
stock of the Company in connection with any employment contract, benefit plan or
other  similar  arrangement  with or for the  benefit of one or more  employees,
officers,  directors or consultants,  in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities  convertible  into or  exercisable  for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable  Extension  Period, if any, (2) as a result of any exchange or
conversion of any class or series of the Company's capital stock (or any capital
stock of a subsidiary  of the Company) for any class or series of the  Company's
capital  stock or of any class or series of the Company's  indebtedness  for any
class or series of the Company's  capital stock,  (3) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange  provisions  of such capital stock or the security  being  converted or
exchanged,   (4)  any   declaration  of  a  dividend  in  connection   with  any
stockholder's  rights plan, or the issuance of rights,  stock or other  property
under any  stockholder's  rights plan, or the redemption or repurchase of rights
pursuant thereto,  (5) any dividend in the form of stock,  warrants,  options or
other rights where the dividend  stock or the stock  issuable  upon  exercise of
such  warrants,  options or other  rights is the same stock as that on which the
dividend  is being paid or ranks pari passu with or junior to such stock and any
cash payments in lieu of fractional  shares issued in connection  therewith,  or
(6) payments under the Capital Securities Guarantee).

     Section 3.9. Covenants as to the Trust. For so long as the Trust Securities
remain  outstanding,  the Company shall  maintain  100%  ownership of the Common
Securities; provided, however, that any permitted successor of the Company under
this Indenture may succeed to the Company's ownership of such Common Securities.
The  Company,  as owner of the Common  Securities,  shall cause the Trust (a) to
remain a statutory trust, except in connection with a distribution of Debentures
to the holders of Trust  Securities in liquidation of the Trust,  the redemption
of  all  of  the  Trust  Securities  or  certain  mergers,   consolidations   or
amalgamations,  each as permitted by the Declaration,  (b) to otherwise continue
to be  classified  as a grantor  trust for  United  States  federal  income  tax
purposes  and (c) to cause  each  holder of Trust  Securities  to be  treated as
owning an undivided beneficial interest in the Debentures.

     Section 3.10. Additional Junior Indebtedness. The Company shall not, and it
shall not cause or permit any  Affiliate  of the  Company to incur,  issue or be
obligated on any Additional Junior Indebtedness,  either directly or indirectly,
by way of guarantee,  suretyship or otherwise, other than: (i) Additional Junior
Indebtedness  that,  by its terms,  is expressly  stated to be either junior and
subordinate or pari passu in all respects to the Debentures, and (ii) Additional
Junior  Indebtedness  of which the Company has notified  (and,  if then required
under the applicable  guidelines of the regulating entity, has received approval
from) the Federal Reserve, if the Company is a bank holding company, or the OTS,
if the Company is a savings and loan holding company.

                                  ARTICLE IV.
                       SECURITYHOLDERS' LISTS AND REPORTS
                       ----------------------------------

                         BY THE COMPANY AND THE TRUSTEE
                         ------------------------------

     Section 4.1.  Securityholders' Lists. The Company covenants and agrees that
it will furnish or caused to be furnished to the Trustee:

     (a) on each regular record date for the Debentures, a list, in such form as
the  Trustee  may  reasonably  require,  of  the  names  and  addresses  of  the
Securityholders of the Debentures as of such record date; and

<PAGE>

     (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 4.1 so long as
the Trustee is in possession thereof by reason of its acting as Debenture
registrar.

     Section 4.2. 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
Debentures  (1) contained in the most recent list furnished to it as provided in
Section 4.1 or (2) received by it in the capacity of Debentures registrar (if so
acting) hereunder.  The Trustee may destroy any list furnished to it as provided
in Section 4.1 upon receipt of a new list so furnished.

     (b) In case three or more holders of Debentures (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 Debenture for a period of
at least 6 months preceding the date of such  application,  and such application
states  that  the  applicants  desire  to  communicate  with  other  holders  of
Debentures  with  respect to their  rights  under this  Indenture  or under such
Debentures  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 5 Business Days after the receipt of such  application,  at its election,
either:

          (1) 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 4.2, or

          (2) inform such applicants as to the approximate  number of holders of
     Debentures 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  4.2,  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  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  4.2 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 Debentures,  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,  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.

<PAGE>

     (c) Each and every holder of Debentures, by receiving and holding the same,
agrees with Company and the Trustee that neither the Company nor the Trustee nor
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 Debentures in
accordance with the provisions of subsection (b) of this Section 4.2, 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).

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

                            UPON AN EVENT OF DEFAULT
                            ------------------------

     Section 5.1. Events of Default.  "Event of Default,"  wherever used herein,
means any one of the  following  events  (whatever  the reason for such Event of
Default  and  whether it shall be  voluntary  or  involuntary  or be effected by
operation  of law or pursuant to any  judgment,  decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

     (a) the Company  defaults in the payment of any interest upon any Debenture
when it becomes due and payable,  and fails to cure such default for a period of
30 days; provided, however, that a valid extension of an interest payment period
by the  Company  in  accordance  with the  terms  of this  Indenture  shall  not
constitute a default in the payment of interest for this purpose; or

     (b) the Company defaults in the payment of all or any part of the principal
of (or premium, if any, on) any Debentures as and when the same shall become due
and payable either at maturity, upon redemption,  by declaration of acceleration
or otherwise; or

     (c) the Company  defaults in the  performance  of, or breaches,  any of its
covenants or  agreements  in this  Indenture  or in the terms of the  Debentures
established  as  contemplated  in  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 60 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 at least 25% in aggregate principal amount of the outstanding  Debentures,  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 of  competent  jurisdiction  shall  enter a decree or order for
relief in respect of the  Company in an  involuntary  case under any  applicable
bankruptcy, insolvency,  reorganization or other similar law now or hereafter in
effect,  or appointing a receiver,  liquidator,  assignee,  custodian,  trustee,
sequestrator (or similar official) of the Company or for any substantial part of
its property,  or ordering the winding-up or liquidation of its affairs and such
decree  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,  reorganization 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; or

     (f)  the  Trust  shall  have  voluntarily  or   involuntarily   liquidated,
dissolved, wound-up its business or otherwise terminated its existence except in
connection with (i) the  distribution of the Debentures to holders of such Trust
Securities in liquidation of their  interests in the Trust,  (ii) the redemption

<PAGE>

of  all  of  the  outstanding   Trust   Securities  or  (iii)  certain  mergers,
consolidations or amalgamations, each as permitted by the Declaration.

     If an Event  of  Default  occurs  and is  continuing  with  respect  to the
Debentures,  then, and in each and every such case,  unless the principal of the
Debentures shall have already become due and payable,  either the Trustee or the
holders of not less than 25% in  aggregate  principal  amount of the  Debentures
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
Debentures  and the  interest  accrued  thereon,  if any,  to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable.

     The foregoing provisions, however, are subject to the condition that if, at
any time after the principal of the  Debentures  shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter  provided,  the Company shall
pay or shall  deposit  with the  Trustee  a sum  sufficient  to pay all  matured
installments  of  interest  upon all the  Debentures  and the  principal  of and
premium, if any, on the Debentures which shall have become due otherwise than by
acceleration  (with  interest  upon such  principal  and  premium,  if any,  and
Additional  Interest) 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 6.6, and if any and all Events of Default under this Indenture, other
than the non-payment of the principal of or premium, if any, on Debentures which
shall  have  become  due by  acceleration,  shall  have  been  cured,  waived or
otherwise remedied as provided herein -- then and in every such case the holders
of a majority in aggregate  principal amount of the Debentures then outstanding,
by written notice to the Company and to the Trustee,  may waive all defaults and
rescind and annul such declaration 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 Debentures 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  Debentures  shall
continue as though no such proceeding had been taken.

     Section 5.2. Payment of Debentures on Default;  Suit Therefor.  The Company
covenants  that  (a) in  case  default  shall  be  made  in the  payment  of any
installment  of interest  upon any of the  Debentures as and when the same shall
become due and payable, and such default shall have continued for a period of 30
days, or (b) in case default shall be made in the payment of the principal of or
premium, if any, on any of the Debentures as and when the same shall have become
due and payable,  whether at maturity of the Debentures or upon redemption or by
declaration of  acceleration  or otherwise -- then,  upon demand of the Trustee,
the  Company  will pay to the  Trustee,  for the  benefit of the  holders of the
Debentures  the whole  amount that then shall have become due and payable on all
Debentures for principal and premium, if any, or interest,  or both, as the case
may be, with Additional  Interest  accrued on the Debentures (to the extent that
payment  of such  interest  is  enforceable  under  applicable  law and,  if the
Debentures are held by the Trust or a trustee of such Trust, without duplication
of any other amounts paid by the Trust or a trustee in respect thereof); 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 6.6. 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

<PAGE>

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  Debentures and collect in the manner provided by law out of the
property  of the  Company  or any  other  obligor  on such  Debentures  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  Debentures  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
Debentures,  or to the  creditors  or  property  of the  Company  or such  other
obligor,  the Trustee,  irrespective  of whether the principal of the Debentures
shall  then be due  and  payable  as  therein  expressed  or by  declaration  of
acceleration  or otherwise  and  irrespective  of whether the Trustee shall have
made any  demand  pursuant  to the  provisions  of this  Section  5.2,  shall be
entitled and empowered, by intervention in such proceedings or otherwise,

     (i)  to file and prove a claim or claims for the whole  amount of principal
          and  interest  owing and unpaid in respect of the  Debentures  and, in
          case of any judicial proceedings,

     (ii) 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  6.6),  and  of the  Securityholders  allowed  in  such
          judicial  proceedings  relative to the Company or any other obligor on
          the Debentures, 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  Debentures  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,

    (iii) to  collect  and  receive  any  moneys or other  property  payable  or
          deliverable on any such claims, and

     (iv) to  distribute  the  same  after  the  deduction  of its  charges  and
          expenses.

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 6.6.

     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
Debentures  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 Debentures,  may be enforced by the Trustee without the possession of
any  of the  Debentures,  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
Debentures.

<PAGE>

     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 Debentures,  and it shall not be necessary to make any holders of
the Debentures parties to any such proceedings.

     Section  5.3.  Application  of Moneys  Collected  by  Trustee.  Any  moneys
collected  by the  Trustee  pursuant  to this  Article V 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 Debentures 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 6.6;

     Second: To the payment of all Senior  Indebtedness of the Company if and to
the extent required by Article XV;

     Third:  To the payment of the amounts  then due and unpaid upon  Debentures
for principal (and premium, if any), and interest on the Debentures,  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 on such
Debentures for principal (and premium, if any) and interest, respectively; and

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

     Section 5.4.  Proceedings  by  Securityholders.  No holder of any Debenture
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  Debentures  and unless the
holders of not less than 25% in  aggregate  principal  amount of the  Debentures
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, however, that no holder
of  Debentures  shall have any right to prejudice the rights of any other holder
of  Debentures,  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 Debentures.

     Notwithstanding any other provisions in this Indenture,  however, the right
of any holder of any Debenture to receive  payment of the principal of, premium,
if any, and interest,  on such  Debenture 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 and by  accepting a Debenture  hereunder  it is expressly
understood,  intended and covenanted by the taker and holder of every  Debenture
with every  other such  taker and  holder and the  Trustee,  that no one or more
holders of Debentures shall have any right in any manner whatsoever by virtue or
by availing  itself of any  provision of this  Indenture  to affect,  disturb or
prejudice  the rights of the  holders of any other  Debentures,  or to obtain or
seek to obtain  priority  over or  preference  to any other such  holder,  or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all holders of Debentures.  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  5.5.  Proceedings  by  Trustee.  In case of an  Event  of  Default
hereunder the Trustee may in its  discretion  proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate  judicial  proceedings

<PAGE>

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.

     Section 5.6.  Remedies  Cumulative and Continuing;  Delay or Omission Not a
Waiver.  Except as  otherwise  provided in Section  2.6, 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  Debentures,
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  Debentures,  and no delay or  omission of the
Trustee or of any holder of any of the Debentures 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
5.4,  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.

     No delay or omission of the Trustee or any  Securityholder  to exercise any
right or remedy  accruing  upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein.  Every right and remedy  given by this Article or by law to the Trustee
or to any Securityholder may be exercised from time to time, and as often as may
be deemed expedient, by the Trustee (in accordance with its duties under Section
6.1 hereof) or by such holder, as the case may be.

     Section 5.7. Direction of Proceedings and Waiver of Defaults by Majority of
Securityholders.  The holders of a majority in aggregate principal amount of the
Debentures affected (voting as one class) 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 Debentures; provided, however, that (subject to
the  provisions  of Section 6.1) 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.

     The holders of a majority in aggregate  principal  amount of the Debentures
at the time  outstanding  may on behalf of the holders of all of the  Debentures
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,  premium,  if any, or interest on any of the  Debentures,  (b) in respect of
covenants or provisions  hereof which cannot be modified or amended  without the
consent  of the  holder of each  Debenture  affected,  or (c) in  respect of the
covenants  contained in Section 3.9; provided,  however,  that if the Debentures
are held by the Trust or a trustee of such trust, such waiver or modification to
such  waiver  shall  not  be  effective  until  the  holders  of a  majority  in
Liquidation Amount of Trust Securities of the Trust shall have consented to such
waiver or modification to such waiver, provided, further, that if the consent of
the holder of each outstanding  Debenture is required,  such waiver shall not be
effective  until each  holder of the Trust  Securities  of the Trust  shall have
consented to such  waiver.  Upon any such waiver,  the 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 Debentures  shall be restored to their former
positions and rights hereunder, respectively; but no 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

<PAGE>

have been waived as permitted by this Section,  said default or Event of Default
shall for all purposes of the  Debentures  and this  Indenture be deemed to have
been cured and to be not continuing.

     Section 5.8.  Notice of Defaults.  The Trustee shall,  within 90 days after
the actual  knowledge by a Responsible  Officer of the Trustee of the occurrence
of a default with respect to the Debentures, mail to all Securityholders, as the
names and addresses of such holders appear upon the Debenture  Register,  notice
of all defaults with respect to the Debentures known to the Trustee, unless such
defaults  shall have been  cured  before  the  giving of such  notice  (the term
"defaults"  for the purpose of this Section 5.8 being  hereby  defined to be the
events  specified in clauses (a), (b), (c), (d), (e) and (f) of Section 5.1, not
including  periods of grace, if any, provided for therein);  provided,  however,
that, except in the case of default in the payment of the principal of, premium,
if any, or interest on any of the Debentures,  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 5.9. Undertaking to Pay Costs. All parties to this Indenture agree,
and each holder of any  Debenture by his  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;  provided,  however,  that the  provisions of this
Section 5.9 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 Debentures 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 Debenture  against the
Company on or after the same shall have become due and payable.

                                  ARTICLE VI.
                             CONCERNING THE TRUSTEE
                             ----------------------

     Section 6.1. Duties and  Responsibilities  of Trustee.  With respect to the
holders of Debentures issued hereunder,  the Trustee, prior to the occurrence of
an Event of  Default  with  respect  to the  Debentures  and after the curing or
waiving of all Events of Default  which may have  occurred,  with respect to the
Debentures,  undertakes  to  perform  such  duties  and only such  duties as are
specifically set forth in this Indenture, and no implied covenants shall be read
into this  Indenture  against  the  Trustee.  In case an Event of  Default  with
respect to the Debentures 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 man would exercise or use under the  circumstances in the conduct of his
own affairs.

     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, except that:

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

          (1)  the  duties  and  obligations  of the  Trustee  with  respect  to
     Debentures  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  Debentures  as are

<PAGE>

     specifically  set forth in this  Indenture,  and no  implied  covenants  or
     obligations shall be read into this Indenture against the Trustee, and

          (2) 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 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; and

     (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 5.7, 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.

     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,  if there is ground for  believing  that the  repayment of
such funds or liability  is not assured to it under the terms of this  Indenture
or indemnity  satisfactory  to the Trustee  against such risk is not  reasonably
assured to it.

     Section 6.2.  Reliance on  Documents,  Opinions,  etc.  Except as otherwise
provided in Section 6.1:

     (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 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 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  with  respect to the  Debentures  (that has not been cured or

<PAGE>

waived) to exercise  with  respect to  Debentures  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 man would exercise or use under the  circumstances
in the conduct of his 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 not less  than a  majority  in  aggregate  principal  amount  of the
outstanding Debentures 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;

     (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; and

     (h) with the exceptions of defaults under  Sections  5.1(a) or 5.1(b),  the
Trustee  shall not be charged with  knowledge of any Default or Event of Default
with respect to the Debentures  unless a 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 Debentures or by any holder of the Debentures.

     Section 6.3. No Responsibility  for Recitals,  etc. The recitals  contained
herein and in the Debentures (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
Debentures.  The Trustee and the  Authenticating  Agent shall not be accountable
for the use or  application  by the Company of any Debentures or the proceeds of
any Debentures  authenticated and delivered by the Trustee or the Authenticating
Agent in conformity with the provisions of this Indenture.

     Section 6.4. Trustee,  Authenticating Agent, Paying Agents, Transfer Agents
or Registrar May Own Debentures.  The Trustee or any Authenticating Agent or any
paying agent or any transfer agent or any Debenture registrar, in its individual
or any other  capacity,  may become the owner or pledgee of Debentures  with the
same rights it would have if it were not Trustee,  Authenticating  Agent, paying
agent, transfer agent or Debenture registrar.

     Section  6.5.  Moneys to be Held in Trust.  Subject  to the  provisions  of
Section  12.4,  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 shall be
paid from  time to time upon the  written  order of the  Company,  signed by the
Chairman of the Board of Directors,  the President,  a Managing Director, a Vice
President the Treasurer or an Assistant Treasurer of the Company.

     Section 6.6.  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

<PAGE>

regard to the  compensation of a trustee of an express  trust),  and the Company
will pay or reimburse the Trustee upon its request for all 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  expenses  and  disbursements  of its  counsel  and of all  Persons  not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or willful  misconduct.  The Company also covenants to
indemnify  each of the Trustee or 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)  incurred  without  negligence  or willful
misconduct on the part of the Trustee and 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 of  liability.  The  obligations  of the
Company  under this Section 6.6 to  compensate  and indemnify the Trustee and to
pay or reimburse  the Trustee for  expenses,  disbursements  and advances  shall
constitute additional indebtedness hereunder. Such additional indebtedness shall
be secured by a lien prior to that of the Debentures 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 Debentures.

     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 Section 5.1(d),  Section 5.1(e)
or Section 5.1(f),  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.

     Notwithstanding  anything  in  this  Indenture  or  any  Debenture  to  the
contrary,  the Trustee shall have no  obligation  whatsoever to advance funds to
pay any  principal  of or  interest  on or other  amounts  with  respect  to the
Debentures or otherwise advance funds to or on behalf of the Company.

     Section  6.7.  Officers'  Certificate  as  Evidence.  Except  as  otherwise
provided  in  Sections  6.1  and  6.2,  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 or willful misconduct
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  or willful  misconduct  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 6.8.  Eligibility of Trustee.  The Trustee  hereunder  shall at all
times be a corporation organized and doing business under the laws of the United
States of  America  or any state or  territory  thereof  or of the  District  of
Columbia or a corporation or other Person authorized under such laws to exercise
corporate trust powers,  having (or whose  obligations  under this Indenture are
guaranteed by an affiliate having) a combined capital and surplus of at least 50
million U.S. dollars  ($50,000,000.00) and subject to supervision or examination
by federal,  state,  territorial,  or District  of Columbia  authority.  If such
corporation 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 6.8 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 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.

<PAGE>

     In case at any time the Trustee  shall  cease to be eligible in  accordance
with the provisions of this Section 6.8, the Trustee shall resign immediately in
the manner and with the effect specified in Section 6.9.

     Section 6.9. 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
Debentures at their  addresses as they shall appear on the  Debenture  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 Debenture  or  Debentures  for at least six
months may,  subject to the  provisions of Section 5.9, on behalf of himself 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 --

          (1) the Trustee  shall fail to comply with the  provisions  of Section
     6.8 after written request therefor by the Company or by any  Securityholder
     who has been a bona fide holder of a Debenture or Debentures for at least 6
     months, or

          (2) the Trustee  shall cease to be  eligible  in  accordance  with the
     provisions  of Section 6.8 and shall fail to resign after  written  request
     therefor by the Company or by any such Securityholder, or

          (3) the Trustee shall become incapable of acting, or shall be adjudged
     a 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  5.9,  any
          Securityholder  who has been a bona  fide  holder  of a  Debenture  or
          Debentures  for at least 6 months  may,  on behalf of himself  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 successor Trustee.

     (c) Upon prior written  notice to the Company and the Trustee,  the holders
of a  majority  in  aggregate  principal  amount of the  Debentures  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 10 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 6.9  provided,  may  petition  any court of
competent jurisdiction for an appointment of a successor.

<PAGE>

     (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 6.9 shall execute,  acknowledge  and deliver to
the  Company  and  to its  predecessor  Trustee  an  instrument  accepting  such
appointment hereunder,  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 Debentures 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 any amounts  then due it pursuant to the
provisions  of Section 6.6,  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 thereunder. 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
6.6.

     If a successor Trustee is appointed,  the Company, the retiring Trustee and
the successor Trustee shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights,  powers,  trusts and duties of the retiring Trustee
with  respect  to the  Debentures  as to which the  predecessor  Trustee  is not
retiring shall continue to be vested in the predecessor  Trustee,  and shall add
to or change any of the  provisions  of this  Indenture as shall be necessary to
provide for or facilitate the administration of the Trust hereunder by more than
one Trustee,  it being  understood  that nothing herein or in such  supplemental
indenture shall constitute such Trustees  co-trustees of the same trust and that
each such Trustee shall be Trustee of a trust or trusts  hereunder  separate and
apart from any trust or trusts hereunder administered by any other such Trustee.

     No successor  Trustee shall accept  appointment as provided in this Section
unless at the time of such acceptance  such successor  Trustee shall be eligible
under the provisions of Section 6.8.

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

     Upon  acceptance of appointment by a successor  Trustee as provided in this
Section 6.10,  the Company  shall mail notice of the  succession of such Trustee
hereunder to the holders of Debentures  at their  addresses as they shall appear
on the  Debenture  Register.  If the Company fails to mail such notice within 10
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 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  Debentures  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

<PAGE>

Debentures  so  authenticated;  and in case at that  time any of the  Debentures
shall not have been authenticated, any successor to the Trustee may authenticate
such Debentures  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 Debentures 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  Debentures 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 Debentures  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
Debentures;  provided,  however, that the Trustee shall have no liability to the
Company for any acts or  omissions of the  Authenticating  Agent with respect to
the authentication  and delivery of Debentures.  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 or territory  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  $50,000,000.00  and being  subject to
supervision  or  examination  by  federal,  state,  territorial  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  6.12  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 6.12 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 Debentures
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 6.12,  the Trustee may, and upon the request of the Company  shall,
promptly  appoint a successor  Authenticating  Agent eligible under this Section
6.12,  shall give written  notice of such  appointment  to the Company and shall
mail notice of such  appointment  to all holders of  Debentures as the names and
addresses  of such  holders  appear on the  Debenture  Register.  Any  successor
Authenticating  Agent upon acceptance of its appointment  hereunder shall become
vested with all rights,  powers, duties and responsibilities with respect to the
Debentures 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.

<PAGE>

                                  ARTICLE VII.
                         CONCERNING THE SECURITYHOLDERS
                         ------------------------------

     Section 7.1.  Action by  Securityholders.  Whenever in this Indenture it is
provided  that the  holders of a specified  percentage  in  aggregate  principal
amount of the Debentures 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 Debentures  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  Debentures  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
Debentures  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  Debentures  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 6 months after the record date.

     Section  7.2.  Proof  of  Execution  by  Securityholders.  Subject  to  the
provisions of Section 6.1, 6.2 and 8.5, proof of the execution of any instrument
by a  Securityholder  or his  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  Debentures  shall be proved  by the  Debenture  Register  or by a
certificate of the Debenture registrar.  The Trustee may require such additional
proof of any matter referred to in this Section as it shall deem necessary.

     The record of any  Securityholders'  meeting  shall be proved in the manner
provided in Section 8.6.

     Section 7.3. Who Are Deemed Absolute  Owners.  Prior to due presentment for
registration  of  transfer of any  Debenture,  the  Company,  the  Trustee,  any
Authenticating  Agent,  any paying agent,  any transfer  agent and any Debenture
registrar may deem the Person in whose name such  Debenture  shall be registered
upon the Debenture  Register to be, and may treat him as, the absolute  owner of
such Debenture  (whether or not such Debenture shall be overdue) for the purpose
of receiving payment of or on account of the principal of, premium,  if any, and
interest on such Debenture and for all other  purposes;  and neither the Company
nor the  Trustee  nor any  Authenticating  Agent  nor any  paying  agent nor any
transfer  agent nor any Debenture  registrar  shall be affected by any notice to
the contrary. All such payments so made to any holder for the time being or upon
his  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 Debenture.

<PAGE>

     Section  7.4.  Debentures  Owned by  Company  Deemed  Not  Outstanding.  In
determining  whether the holders of the requisite  aggregate principal amount of
Debentures  have  concurred  in any  direction,  consent  or waiver  under  this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures 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 Debentures  shall be disregarded and deemed not to be outstanding for the
purpose of any such determination;  provided,  however, that for the purposes of
determining  whether  the  Trustee  shall be  protected  in  relying on any such
direction, consent or waiver, only Debentures which a Responsible Officer of the
Trustee actually knows are so owned shall be so disregarded. Debentures so owned
which have been  pledged in good faith may be  regarded as  outstanding  for the
purposes of this Section 7.4 if the pledgee shall establish to the  satisfaction
of the Trustee the pledgee's  right to vote such Debentures 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.

     Section 7.5.  Revocation of Consents;  Future  Holders  Bound.  At any time
prior to (but not after) the  evidencing to the Trustee,  as provided in Section
7.1, of the taking of any action by the holders of the  percentage  in aggregate
principal  amount of the  Debentures  specified in this  Indenture in connection
with  such  action,  any  holder  (in cases  where no  record  date has been set
pursuant to Section 7.1) or any holder as of an applicable record date (in cases
where a record date has been set pursuant to Section 7.1) of a Debenture (or any
Debenture  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 Debentures
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 7.2,  revoke such action so far as concerns  such
Debenture  (or  so far as  concerns  the  principal  amount  represented  by any
exchanged or substituted  Debenture).  Except as aforesaid any such action taken
by the holder of any Debenture  shall be conclusive and binding upon such holder
and upon all future holders and owners of such  Debenture,  and of any Debenture
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  Debenture  or any  Debenture  issued  in  exchange  or  substitution
therefor.

                                 ARTICLE VIII.
                            SECURITYHOLDERS' MEETINGS
                            -------------------------

     Section 8.1.  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 9.2; 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 Debentures under any
other provision of this Indenture or under applicable law.

<PAGE>

     Section 8.2. Call of Meetings by Trustee.  The Trustee may at any time call
a meeting of  Securityholders to take any action specified in Section 8.1, to be
held at such time and at such place 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 Debentures affected at their addresses as
they shall appear on the Debentures Register and, if the Company is not a holder
of Debentures,  to the Company. Such notice shall be mailed not less than 20 nor
more than 180 days prior to the date fixed for the meeting.

     Section 8.3. 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  Debentures,  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
for such  meeting  and may call such  meeting to take any action  authorized  in
Section 8.1, by mailing notice thereof as provided in Section 8.2.

     Section  8.4.  Qualifications  for  Voting.  To be  entitled to vote at any
meeting  of  Securityholders  a  Person  shall  (a) be a  holder  of one or more
Debentures  with  respect  to which the  meeting  is being  held or (b) a Person
appointed by an  instrument  in writing as proxy by a holder of one or more such
Debentures.  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 8.5.  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  Debentures  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 think fit.

     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  8.3, 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 of the meeting.

     Subject to the  provisions  of Section  7.4, at any meeting  each holder of
Debentures  with respect to which such  meeting is being held or proxy  therefor
shall be entitled to one vote for each $1,000.00  principal amount of Debentures
held or represented  by him;  provided,  however,  that no vote shall be cast or
counted at any meeting in respect of any Debenture 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 Debentures  held
by him or instruments in writing as aforesaid duly designating him as the Person
to vote on behalf of other Securityholders.  Any meeting of Securityholders duly
called  pursuant to the  provisions of Section 8.2 or 8.3 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 8.6. Voting. The vote upon any resolution  submitted to any meeting
of holders of Debentures  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  Debentures  held or  represented  by them.  The  permanent  chairman of the

<PAGE>

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  8.2. The record
shall show the serial  numbers of the  Debentures  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.

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

     Section 8.7.  Quorum;  Actions.  The Persons entitled to vote a majority in
principal  amount of the Debentures  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 principal amount of the Debentures,  the
Persons holding or representing such specified percentage in principal amount of
the Debentures  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  8.2,  except  that such notice need be given only once not
less  than 5 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 principal  amount of the
Debentures which shall constitute a quorum.

     Except as limited by the proviso in the first paragraph of Section 9.2, 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 principal amount of the Debentures;  provided, however,
that,  except as limited by the proviso in the first  paragraph  of Section 9.2,
any resolution with respect to any consent,  waiver,  request,  demand,  notice,
authorization, direction or other action which this Indenture expressly provides
may be given by the holders of not less than a specified percentage in principal
amount of the  Debentures  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 a not less than such specified  percentage in
principal amount of the Debentures.

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

                                  ARTICLE IX.
                             SUPPLEMENTAL INDENTURES
                             -----------------------

     Section 9.1.  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:

<PAGE>

     (a) to  evidence  the  succession  of  another  Person to the  Company,  or
successive  successions,  and the  assumption  by the  successor  Person  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 Debentures as
the Board of Directors shall consider to be for the protection of the holders of
such Debentures,  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 materially
adversely affect the interests of the holders of the Debentures;

     (d) to add to, delete from, or revise the terms of  Debentures,  including,
without limitation, any terms relating to the issuance,  exchange,  registration
or transfer of  Debentures,  including  to provide for transfer  procedures  and
restrictions substantially similar to those applicable to the Capital Securities
as required by Section 2.5 (for  purposes of assuring  that no  registration  of
Debentures is required under the Securities Act of 1933, as amended);  provided,
however,  that any such action shall not  adversely  affect the interests of the
holders of the Debentures then outstanding (it being understood, for purposes of
this proviso, that transfer restrictions on Debentures  substantially similar to
those  that  were  applicable  to  Capital  Securities  shall  not be  deemed to
materially adversely affect the holders of the Debentures);

     (e) to evidence and provide for the acceptance of appointment  hereunder by
a successor  Trustee with respect to the  Debentures 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 6.11;

     (f) to make any change (other than as elsewhere provided in this paragraph)
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  Debentures,  to  establish  the  form of any  certifications
required  to be  furnished  pursuant  to the  terms  of  this  Indenture  or the
Debentures, or to add to the rights of the holders of Debentures.

     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 9.1
may be  executed  by the  Company  and the  Trustee  without  the consent of the
holders of any of the Debentures at the time outstanding, notwithstanding any of
the provisions of Section 9.2.

<PAGE>

     Section 9.2. Supplemental Indentures with Consent of Securityholders.  With
the consent  (evidenced  as provided in Section  7.1) of the holders of not less
than a majority in  aggregate  principal  amount of the  Debentures  at the time
outstanding  affected by such supplemental  indenture  (voting as a class),  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
Debentures; provided, however, that no such supplemental indenture shall without
the consent of the  holders of each  Debenture  then  outstanding  and  affected
thereby (i) change the fixed maturity of any Debenture,  or reduce the principal
amount thereof or any premium thereon,  or reduce the rate or extend the time of
payment of interest thereon,  or reduce any amount payable on redemption thereof
or make the principal  thereof or any interest or premium thereon payable in any
coin or currency other than that provided in the Debentures, or impair or affect
the right of any  Securityholder to institute suit for payment thereof or impair
the right of repayment,  if any, at the option of the holder, or (ii) reduce the
aforesaid  percentage of Debentures the holders of which are required to consent
to any such  supplemental  indenture;  provided  further,  however,  that if the
Debentures  are held by a trust or a trustee of such  trust,  such  supplemental
indenture  shall not be effective until the holders of a majority in Liquidation
Amount of Trust Securities shall have consented to such supplemental  indenture;
provided  further,  however,  that if the consent of the  Securityholder of each
outstanding  Debenture is required,  such  supplemental  indenture  shall not be
effective until each holder of the Trust Securities shall have consented to such
supplemental indenture.

     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
Debenture  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  9.2  to  approve  the  particular  form  of any  proposed  supplemental
indenture,  but it  shall  be  sufficient  if such  consent  shall  approve  the
substance thereof.

     Section 9.3. Effect of Supplemental  Indentures.  Upon the execution of any
supplemental  indenture  pursuant  to the  provisions  of this  Article IX, this
Indenture  shall be and 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 Debentures 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 9.4. Notation on Debentures. Debentures 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
Debentures  so modified as to conform,  in the opinion of the Board of Directors

<PAGE>

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 Debentures then outstanding.

     Section  9.5.  Evidence  of  Compliance  of  Supplemental  Indenture  to be
Furnished to Trustee. The Trustee, subject to the provisions of Sections 6.1 and
6.2,  shall, in addition to the documents  required by Section 14.6,  receive an
Officers'  Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental  indenture  executed pursuant hereto complies with the requirements
of this  Article  IX.  The  Trustee  shall  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  10.1.  Optional  Redemption.  The  Company  shall  have the  right
(subject to the receipt by the Company of prior approval (i) if the Company is a
bank  holding  company,  from  the  Federal  Reserve,  if  then  required  under
applicable  capital  guidelines  or policies or (ii) if the Company is a savings
and loan holding company, from the OTS if then required under applicable capital
guidelines  or policies of the OTS),  to redeem the  Debentures,  in whole or in
part,  but in all  cases  in a  principal  amount  with  integral  multiples  of
$1,000.00,  on any July 31, October 31, January 31, or April 30 on or after July
31, 2006 (the "Redemption Date"), at the Redemption Price.

     Section 10.2. Special Event Redemption.  If a Special Event shall occur and
be  continuing,  the Company shall have the right (subject to the receipt by the
Company of prior approval (i) if the Company is a bank holding company, from the
Federal Reserve if then required under applicable capital guidelines or policies
of the  Federal  Reserve or (ii) if the  Company is a savings  and loan  holding
company,  from the OTS if then required under applicable  capital  guidelines or
policies of the OTS) to redeem the Debentures in whole,  but not in part, at any
Interest Payment Date,  within 120 days following the occurrence of such Special
Event (the "Special Redemption Date") at the Special Redemption Price.

     Section 10.3.  Notice of Redemption;  Selection of Debentures.  In case the
Company  shall  desire to exercise  the right to redeem all, or, as the case may
be,  any part of the  Debentures,  it shall  cause to be mailed a notice of such
redemption at least 30 and not more than 60 days prior to the Redemption Date or
the Special  Redemption Date to the holders of Debentures so to be redeemed as a
whole or in part at their last  addresses  as the same  appear on the  Debenture
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  Debenture
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Debenture.

     Each such notice of redemption  shall specify the CUSIP number,  if any, of
the  Debentures to be redeemed,  the Redemption  Date or the Special  Redemption
Date, as applicable,  the Redemption Price or the Special  Redemption  Price, as
applicable,  at which  Debentures  are to be  redeemed,  the  place or places of
payment,  that  payment  will be made upon  presentation  and  surrender of such
Debentures,  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  Debentures  are to be redeemed the notice of  redemption  shall specify the
numbers of the  Debentures  to be  redeemed.  In case the  Debentures  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

<PAGE>

date fixed for redemption,  upon surrender of such Debenture, a new Debenture or
Debentures in principal  amount equal to the unredeemed  portion thereof will be
issued.

     Prior to 10:00 a.m.  New York City time on the  Redemption  Date or Special
Redemption  Date,  as  applicable,  the Company will deposit with the Trustee or
with one or more paying  agents an amount of money  sufficient  to redeem on the
Redemption  Date  or  the  Special  Redemption  Date,  as  applicable,  all  the
Debentures  so called for  redemption  at the  appropriate  Redemption  Price or
Special Redemption Price,  together with accrued interest to the Redemption Date
or Special Redemption Date, as applicable.

     If all, or less than all, the  Debentures  are to be redeemed,  the Company
will  give  the  Trustee  notice  not  less  than  45 nor  more  than  60  days,
respectively,  prior to the  Redemption  Date or  Special  Redemption  Date,  as
applicable,  as to the aggregate  principal  amount of Debentures to be redeemed
and the Trustee shall select,  in such manner as in its sole discretion it shall
deem  appropriate  and fair,  the  Debentures  or portions  thereof (in integral
multiples of $1,000.00) to be redeemed.

     Section 10.4.  Payment of Debentures  Called for  Redemption.  If notice of
redemption  has been  given as  provided  in Section  10.3,  the  Debentures  or
portions of  Debentures  with  respect to which such notice has been given shall
become due and payable on the  Redemption  Date or Special  Redemption  Date, as
applicable,  and at the place or places stated in such notice at the  applicable
Redemption Price or Special Redemption Price,  together with interest accrued to
the Redemption Date or Special Redemption Date, as applicable,  and on and after
said date (unless the Company shall default in the payment of such Debentures at
the Redemption Price or Special  Redemption Price, as applicable,  together with
interest  accrued  to said date)  interest  on the  Debentures  or  portions  of
Debentures so called for redemption  shall cease to accrue.  On presentation and
surrender  of such  Debentures  at a place of payment  specified in said notice,
such Debentures or the specified  portions thereof shall be paid and redeemed by
the Company at the  applicable  Redemption  Price or Special  Redemption  Price,
together  with  interest  accrued  thereon  to the  Redemption  Date or  Special
Redemption Date, as applicable.

     Upon presentation of any Debenture 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 Debenture or Debentures
of authorized denominations, in principal amount equal to the unredeemed portion
of the Debenture so presented.

<PAGE>

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

     Section 11.1.  Company May  Consolidate,  etc., on Certain  Terms.  Nothing
contained in this Indenture or in the Debentures shall prevent any consolidation
or  merger  of the  Company  with or  into  any  other  Person  (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 the property of
the Company or its successor or successors as an entirety,  or  substantially as
an entirety, to any other Person (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, upon any
such consolidation, merger (where the Company is not the surviving corporation),
sale, conveyance, transfer or other disposition, the due and punctual payment of
the principal of (and premium,  if any) and interest on all of the Debentures in
accordance with their terms,  according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this Indenture
to be  kept  or  performed  by  the  Company,  shall  be  expressly  assumed  by
supplemental  indenture  satisfactory  in  form  to  the  Trustee  executed  and
delivered  to the Trustee by the entity  formed by such  consolidation,  or into
which the  Company  shall have been  merged,  or by the entity  which shall have
acquired such property.

     Section  11.2.  Successor  Entity  to be  Substituted.  In case of any such
consolidation,  merger, sale, conveyance, transfer or other disposition and upon
the assumption by the successor entity, by supplemental indenture,  executed and
delivered to the Trustee and 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 Debentures 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  entity 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 Debentures. Such successor entity thereupon may
cause to be signed,  and may issue in its own name, any or all of the Debentures
issuable  hereunder which  theretofore shall not have been signed by the Company
and delivered to the Trustee or the Authenticating Agent; and, upon the order of
such  successor  entity  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  Debentures  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
Debentures which such successor  entity  thereafter shall cause to be signed and
delivered to the Trustee or the Authenticating  Agent for that purpose.  All the
Debentures  so issued shall in all respects have the same legal rank and benefit
under this  Indenture as the  Debentures  theretofore  or  thereafter  issued in
accordance with the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof.

     Section  11.3.  Opinion  of Counsel to be Given to  Trustee.  The  Trustee,
subject to the provisions of Sections 6.1 and 6.2, shall receive, in addition to
the  Opinion  of  Counsel  required  by  Section  9.5,  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 12.1. Discharge of Indenture. When

     (a)  the  Company  shall  deliver  to  the  Trustee  for  cancellation  all
          Debentures theretofore  authenticated (other than any Debentures which

<PAGE>

          shall have been  destroyed,  lost or stolen and which  shall have been
          replaced  or paid as  provided  in  Section  2.6) and not  theretofore
          canceled, or

     (b)  all the  Debentures  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 1 year or are to be
          called for redemption within 1 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  all of the  Debentures  (other than any  Debentures  which
          shall have been  destroyed,  lost or stolen and which  shall have been
          replaced or paid as provided in Section 2.6) not theretofore  canceled
          or delivered to the Trustee for cancellation,  including principal and
          premium,  if any,  and  interest  due or to become due to such date of
          maturity  or  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 Debentures (1) theretofore repaid
          to the Company in accordance  with the  provisions of Section 12.4, 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 clause (b) 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  2.5,  2.6,  2.8,  3.1,  3.2,  3.4, 6.6, 6.8, 6.9 and 12.4 hereof shall
survive until such Debentures shall mature and be paid. Thereafter, Sections 6.6
and 12.4 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.  The Company 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 Debentures.

     Section 12.2.  Deposited Moneys to be Held in Trust by Trustee.  Subject to
the provisions of Section 12.4, all moneys  deposited with the Trustee  pursuant
to Section  12.1 shall be held in trust in a  non-interest  bearing  account 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  Debentures  for the payment of which such moneys have been deposited
with the Trustee,  of all sums due and to become due thereon for principal,  and
premium, if any, and interest.

     Section 12.3.  Paying Agent to Repay Moneys Held. Upon the satisfaction and
discharge  of this  Indenture  all moneys  then held by any paying  agent of the
Debentures (other than the Trustee) shall, upon demand of the Company, be repaid
to it or paid to the Trustee,  and thereupon such paying agent shall be released
from all further liability with respect to such moneys.

     Section 12.4. 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 Debentures and not applied but remaining unclaimed by the
holders of  Debentures  for 2 years after the date upon which the  principal of,
and premium,  if any, or interest on such Debentures,  as the case may be, shall
have become due and payable,  shall, subject to applicable  escheatment laws, be
repaid to the Company by the Trustee or such paying agent on written demand; and
the holder of any of the Debentures  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.

<PAGE>

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

     Section 13.1.  Indenture and Debentures  Solely Corporate  Obligations.  No
recourse for the payment of the principal of or premium,  if any, or interest on
any Debenture,  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
Debenture,  or because of the creation of any indebtedness  represented thereby,
shall  be had  against  any  incorporator,  stockholder,  employee,  officer  or
director,  as such, past,  present or future, of the Company or of any successor
Person of the Company,  either  directly or through the Company or any successor
Person 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 issue of the Debentures.

                                  ARTICLE XIV.
                            MISCELLANEOUS PROVISIONS
                            ------------------------

     Section 14.1.  Successors.  All the covenants,  stipulations,  promises and
agreements in this Indenture  contained by the Company shall bind its successors
and assigns whether so expressed or not.

     Section 14.2.  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  14.3.  Surrender of Company  Powers.  The Company by instrument in
writing  executed  by  authority  of at least 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.

     Section 14.4. Addresses for Notices, etc. Any notice,  consent,  direction,
request,  authorization,  waiver  or  demand  which  by any  provision  of  this
Indenture is required or permitted to be given, made, furnished or served by the
Trustee or by the Securityholders on or to 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 the purpose) to the Company, 322 East Main, Bismarck, North
Dakota 58501  Attention:  Gregory  Cleveland.  Any notice,  consent,  direction,
request, authorization, waiver 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 the  Trustee,
addressed  to  the  Trustee,  225  Asylum  Street,  Goodwin  Square,   Hartford,
Connecticut, 06103 Attention: Vice President, Corporate Trust Department, with a
copy to State Street Bank and Trust Company, P.O. Box 778, Boston, Massachusetts
02102-0778,  Attention:  Paul D. Allen, Corporate Trust Department.  Any notice,
consent,  direction,  request,  authorization,  waiver  or  demand  on or to any
Securityholder  shall be deemed to have been sufficiently given or made, for all
purposes,  if given or made in writing at the address set forth in the Debenture
Register.

     Section 14.5.  Governing Law. This  Indenture and each  Debenture  shall be
deemed to be a contract made under the law of the State of New York, and for all
purposes  shall be governed by and construed in accordance  with the law of said
State, without regard to conflict of laws principles thereof.

<PAGE>

     Section 14.6.  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.

     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  shall  include (1) a statement  that the person  making such
certificate  or  opinion  has  read  such  covenant  or  condition;  (2) a brief
statement as to the nature and scope of the  examination or  investigation  upon
which the  statements or opinions  contained in such  certificate or opinion are
based;  (3) a statement  that,  in the opinion of such person,  he has made such
examination  or  investigation  as is  necessary  to enable  him to  express  an
informed  opinion as to  whether  or not such  covenant  or  condition  has been
complied  with;  and (4) a statement as to whether or not in the opinion of such
person, such condition or covenant has been complied with.

     Section 14.7.  Non-Business  Days. In any case where the date of payment of
interest on or principal of the Debentures  will be a day that is not a Business
Day, the payment of such interest on or principal of the Debentures  need not be
made on such date but may be made on the next  succeeding  Business Day,  except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately  preceding  Business Day, in each case with the
same  force  and  effect  as if made on the  original  date of  payment,  and no
interest shall accrue for the period from and after such date.

     Section 14.8. 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 14.9. 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 Debentures 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 Debentures, but this Indenture and such Debentures shall be construed as
if such invalid or illegal or  unenforceable  provision had never been contained
herein or therein.

     Section 14.11. Assignment.  The Company will have the right at all times to
assign any of its rights or  obligations  under  this  Indenture  to a direct or
indirect wholly owned Subsidiary of the Company,  provided that, in the event of
any such  assignment,  the Company will 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 hereto.

     Section 14.12.  Acknowledgment  of Rights.  The Company  agrees that,  with
respect to any Debentures held by the Trust or the Institutional  Trustee of the
Trust,  if the  Institutional  Trustee of the Trust  fails to enforce its rights
under  this  Indenture  as the holder of  Debentures  held as the assets of such
Trust  after the  holders of a majority  in  Liquidation  Amount of the  Capital

<PAGE>

Securities of such Trust have so directed such  Institutional  Trustee, a holder
of record of such Capital  Securities  may, to the fullest  extent  permitted by
law,  institute legal  proceedings  directly against the Company to enforce such
Institutional  Trustee's rights under this Indenture  without first  instituting
any legal proceedings against such trustee or any other Person.  Notwithstanding
the  foregoing,  if an Event of Default has occurred and is continuing  and such
event is attributable to the failure of the Company to pay interest (or premium,
if any) or principal on the Debentures on the date such interest (or premium, if
any) or  principal is otherwise  payable (or in the case of  redemption,  on the
redemption  date),  the  Company  agrees  that a holder  of  record  of  Capital
Securities of the Trust may directly  institute a proceeding against the Company
for  enforcement  of payment to such  holder  directly of the  principal  of (or
premium,  if any) or interest on the  Debentures  having an aggregate  principal
amount equal to the aggregate  Liquidation  Amount of the Capital  Securities of
such holder on or after the respective due date specified in the Debentures.

                                  ARTICLE XV.
                           SUBORDINATION OF DEBENTURES
                           ---------------------------

     Section 15.1.  Agreement to Subordinate.  The Company covenants and agrees,
and each  holder  of  Debentures  by such  Securityholder's  acceptance  thereof
likewise  covenants and agrees,  that all Debentures  shall be issued subject to
the provisions of this Article XV; and each holder of a Debenture,  whether upon
original issue or upon transfer or assignment thereof,  accepts and agrees to be
bound by such provisions.

     The payment by the Company of the  principal  of, and premium,  if any, and
interest on all Debentures  shall,  to the extent and in the manner  hereinafter
set forth, be  subordinated  and junior in right of payment to the prior payment
in full of all Senior  Indebtedness of the Company,  whether  outstanding at the
date of this Indenture or thereafter incurred;  provided, however, that the Debt
Securities shall rank pari passu in right of payment with the Company's  12.045%
debentures  due July 19, 2030 issued  pursuant to an Indenture  dated as of July
19, 2000 by and between the Company and First Union National Bank.

     No provision of this Article XV shall prevent the occurrence of any default
or Event of Default hereunder.

     Section 15.2. Default on Senior  Indebtedness.  In the event and during the
continuation of any default by the Company in the payment of principal, premium,
interest  or any other  payment  due on any Senior  Indebtedness  of the Company
following  any grace  period,  or in the event that the  maturity  of any Senior
Indebtedness of the Company has been accelerated because of a default,  then, in
either  case,  no  payment  shall be made by the  Company  with  respect  to the
principal  (including  redemption)  of, or  premium,  if any, or interest on the
Debentures.

     In the event that,  notwithstanding  the  foregoing,  any payment  shall be
received  by the  Trustee  when such  payment  is  prohibited  by the  preceding
paragraph of this Section 15.2, such payment shall,  subject to Section 15.7, be
held in trust for the  benefit of, and shall be paid over or  delivered  to, the
holders of Senior  Indebtedness or their respective  representatives,  or to the
trustee or  trustees  under any  indenture  pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the  extent  that the  holders  of the  Senior  Indebtedness  (or  their
representative  or  representatives  or a trustee) notify the Trustee in writing
within 90 days of such  payment of the amounts  then due and owing on the Senior
Indebtedness and only the amounts  specified in such notice to the Trustee shall
be paid to the holders of Senior Indebtedness.

     Section 15.3. Liquidation, Dissolution, Bankruptcy. Upon any payment by the
Company  or  distribution  of assets of the  Company  of any kind or  character,
whether in cash,  property or securities,  to creditors upon any  dissolution or
winding-up or liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all

<PAGE>

amounts due upon all Senior  Indebtedness  of the Company shall first be paid in
full, or payment  thereof  provided for in money in  accordance  with its terms,
before any  payment is made by the  Company,  on account of the  principal  (and
premium,  if any) or interest on the  Debentures.  Upon any such  dissolution or
winding-up or  liquidation  or  reorganization,  any payment by the Company,  or
distribution of assets of the Company of any kind or character, whether in cash,
property  or  securities,  which the  Securityholders  or the  Trustee  would be
entitled to receive from the Company,  except for the provisions of this Article
XV, shall be paid by the Company,  or by any  receiver,  trustee in  bankruptcy,
liquidating trustee,  agent or other Person making such payment or distribution,
or by the  Securityholders or by the Trustee under this Indenture if received by
them or it,  directly  to the holders of Senior  Indebtedness  (pro rata to such
holders on the basis of the respective  amounts of Senior  Indebtedness  held by
such  holders,  as  calculated  by  the  Company)  or  their  representative  or
representatives,  or to the trustee or trustees under any indenture  pursuant to
which any instruments  evidencing such Senior Indebtedness may have been issued,
as their  respective  interests may appear,  to the extent necessary to pay such
Senior  Indebtedness in full, in money or money's worth,  after giving effect to
any  concurrent  payment or  distribution  to or for the  holders of such Senior
Indebtedness,  before any payment or distribution is made to the Securityholders
or to the Trustee.

     In  the  event  that,   notwithstanding  the  foregoing,   any  payment  or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities,  prohibited by the  foregoing,  shall be received by the
Trustee before all Senior Indebtedness is paid in full, or provision is made for
such payment in money in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered to
the   holders  of  such  Senior   Indebtedness   or  their   representative   or
representatives,  or to the trustee or trustees under any indenture  pursuant to
which any instruments  evidencing such Senior Indebtedness may have been issued,
as their  respective  interests may appear,  as  calculated by the Company,  for
application to the payment of all Senior  Indebtedness,  remaining unpaid to the
extent necessary to pay such Senior  Indebtedness in full in money in accordance
with its terms, after giving effect to any concurrent payment or distribution to
or for the benefit of the holders of such Senior Indebtedness.

     For purposes of this Article XV, the words "cash,  property or  securities"
shall not be deemed to include  shares of stock of the Company as reorganized or
readjusted,  or securities of the Company or any other corporation  provided for
by  a  plan  of  reorganization  or  readjustment,   the  payment  of  which  is
subordinated  at least to the extent provided in this Article XV with respect to
the Debentures to the payment of all Senior  Indebtedness,  that may at the time
be outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior  Indebtedness are not, without the
consent of such holders,  altered by such  reorganization  or readjustment.  The
consolidation  of the Company with,  or the merger of the Company into,  another
corporation  or the  liquidation  or  dissolution  of the Company  following the
conveyance or transfer of its property as an entirety,  or  substantially  as an
entirety,  to another  corporation upon the terms and conditions provided for in
Article  XI of this  Indenture  shall not be deemed a  dissolution,  winding-up,
liquidation  or  reorganization  for the  purposes of this Section if such other
corporation  shall,  as a part  of such  consolidation,  merger,  conveyance  or
transfer,  comply with the  conditions  stated in Article XI of this  Indenture.
Nothing in Section 15.2 or in this Section shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 6.6 of this Indenture.

     Section  15.4.  Subrogation.  Subject to the  payment in full of all Senior
Indebtedness,  the  Securityholders  shall be  subrogated  to the  rights of the
holders of such Senior  Indebtedness  to receive  payments or  distributions  of
cash,  property  or  securities  of  the  Company,  applicable  to  such  Senior
Indebtedness  until the principal of (and  premium,  if any) and interest on the
Debentures  shall be paid in full.  For the  purposes  of such  subrogation,  no
payments or  distributions  to the holders of such  Senior  Indebtedness  of any
cash,  property or securities to which the  Securityholders or the Trustee would

<PAGE>

be  entitled  except  for the  provisions  of this  Article  XV,  and no payment
pursuant  to the  provisions  of this  Article  XV to or for the  benefit of the
holders of such Senior Indebtedness by Securityholders or the Trustee, shall, as
between the Company,  its creditors other than holders of Senior Indebtedness of
the  Company,  and the  holders of the  Debentures  be deemed to be a payment or
distribution by the Company to or on account of such Senior Indebtedness.  It is
understood  that the  provisions of this Article XV are and are intended  solely
for  the  purposes  of  defining  the  relative  rights  of the  holders  of the
Securities, on the one hand, and the holders of such Senior Indebtedness, on the
other hand.

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

     Upon any payment or  distribution  of assets of the Company  referred to in
this Article XV, the Trustee,  subject to the  provisions  of Article VI of this
Indenture,  and the Securityholders  shall be entitled to conclusively rely upon
any order or decree made by any court of  competent  jurisdiction  in which such
dissolution,  winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver,  trustee in bankruptcy,  liquidation  trustee,
agent or other  Person  making such  payment or  distribution,  delivered to the
Trustee or to the Securityholders,  for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and other  indebtedness of the Company,  the amount thereof or payable  thereon,
the amount or amounts paid or distributed  thereon and all other facts pertinent
thereto or to this Article XV.

     Section 15.5. Trustee to Effectuate  Subordination.  Each Securityholder by
such  Securityholder's  acceptance thereof authorizes and directs the Trustee on
such  Securityholder's  behalf  to  take  such  action  as may be  necessary  or
appropriate  to  effectuate  the  subordination  provided in this Article XV and
appoints the Trustee such Securityholder's attorney-in-fact for any and all such
purposes.

     Section 15.6. Notice by the Company.  The Company shall give prompt written
notice to a Responsible  Officer of the Trustee at the  Principal  Office of the
Trustee of any fact known to the Company  that would  prohibit the making of any
payment of monies to or by the Trustee in respect of the Debentures  pursuant to
the  provisions  of this  Article XV.  Notwithstanding  the  provisions  of this
Article XV or any other  provision of this  Indenture,  the Trustee shall not be
charged  with  knowledge of the  existence of any facts that would  prohibit the
making  of  any  payment  of  monies  to or by the  Trustee  in  respect  of the
Debentures  pursuant to the  provisions  of this Article XV,  unless and until a
Responsible  Officer of the Trustee at the Principal Office of the Trustee shall
have received  written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor;  and before the receipt of any
such written  notice,  the Trustee,  subject to the  provisions of Article VI of
this  Indenture,  shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided  for in this  Section at least 2  Business  Days prior to the date upon
which  by the  terms  hereof  any  money  may  become  payable  for any  purpose
(including,  without limitation, the payment of the principal of (or premium, if
any) or interest on any  Debenture),  then,  anything  herein  contained  to the
contrary  notwithstanding,  the Trustee  shall have full power and  authority to
receive  such  money and to apply the same to the  purposes  for which they were

<PAGE>

received,  and shall not be affected by any notice to the  contrary  that may be
received by it within 2 Business Days prior to such date.

     The Trustee,  subject to the  provisions  of Article VI of this  Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person  representing  himself to be a holder of Senior  Indebtedness  (or a
trustee or  representative  on behalf of such  holder),  to establish  that such
notice has been given by a holder of such  Senior  Indebtedness  or a trustee or
representative  on behalf of any such holder or  holders.  In the event that the
Trustee  determines in good faith that further evidence is required with respect
to  the  right  of any  Person  as a  holder  of  such  Senior  Indebtedness  to
participate  in any payment or  distribution  pursuant  to this  Article XV, the
Trustee  may  request  such  Person  to  furnish   evidence  to  the  reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person,  the extent to which such Person is entitled to participate in such
payment or  distribution  and any other  facts  pertinent  to the rights of such
Person  under this  Article  XV, and, if such  evidence  is not  furnished,  the
Trustee may defer any payment to such Person pending  judicial  determination as
to the right of such Person to receive such payment.

     Section 15.7. Rights of the Trustee;  Holders of Senior  Indebtedness.  The
Trustee in its individual capacity shall be entitled to all the rights set forth
in this Article XV in respect of any Senior Indebtedness at any time held by it,
to the same extent as any other  holder of Senior  Indebtedness,  and nothing in
this Indenture shall deprive the Trustee of any of its rights as such holder.

     With respect to the holders of Senior Indebtedness,  the Trustee undertakes
to perform or to  observe  only such of its  covenants  and  obligations  as are
specifically  set  forth  in  this  Article  XV,  and no  implied  covenants  or
obligations  with  respect to the holders of such Senior  Indebtedness  shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of such Senior  Indebtedness  and, subject
to the  provisions  of Article VI of this  Indenture,  the Trustee  shall not be
liable to any holder of such Senior Indebtedness if it shall pay over or deliver
to Securityholders, the Company or any other Person money or assets to which any
holder of such Senior  Indebtedness  shall be entitled by virtue of this Article
XV or otherwise.

     Nothing in this  Article XV shall apply to claims of, or  payments  to, the
Trustee under or pursuant to Section 6.6.

     Section 15.8. Subordination May Not Be Impaired. No right of any present or
future  holder of any Senior  Indebtedness  to enforce  subordination  as herein
provided  shall at any time in any way be  prejudiced  or impaired by any act or
failure to act on the part of the  Company,  or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company, with the
terms,  provisions and covenants of this Indenture,  regardless of any knowledge
thereof that any such holder may have or otherwise be charged with.

     Without in any way limiting the generality of the foregoing paragraph,  the
holders of Senior  Indebtedness may, at any time and from time to time,  without
the  consent  of or  notice  to  the  Trustee  or the  Securityholders,  without
incurring  responsibility  to  the  Securityholders  and  without  impairing  or
releasing  the  subordination  provided  in this  Article XV or the  obligations
hereunder  of the  holders  of the  Debentures  to the  holders  of such  Senior
Indebtedness,  do any one or more of the following: (i) change the manner, place
or terms of payment or extend  the time of payment  of, or renew or alter,  such
Senior Indebtedness,  or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument  evidencing the same or any agreement under which
such  Senior  Indebtedness  is  outstanding;  (ii)  sell,  exchange,  release or
otherwise deal with any property pledged,  mortgaged or otherwise  securing such
Senior  Indebtedness;  (iii)  release  any  Person  liable in any manner for the
collection  of such  Senior  Indebtedness;  and (iv)  exercise  or refrain  from
exercising any rights against the Company, and any other Person.

                   signatures appear on the following page



<PAGE>


     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.

                                    BNCCORP, INC.


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


                                    STATE  STREET  BANK AND TRUST  COMPANY  OF
                                    CONNECTICUT,   NATIONAL  ASSOCIATION,   as
                                    Trustee


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


<PAGE>

                      FORM OF JUNIOR SUBORDINATED DEBENTURE

                           [FORM OF FACE OF SECURITY]

     THIS SECURITY HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT"),  ANY  STATE  SECURITIES  LAWS  OR  ANY  OTHER
APPLICABLE   SECURITIES   LAW.   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 AND ANY APPLICABLE STATE SECURITIES LAWS. THE
HOLDER OF THIS  SECURITY  BY ITS  ACCEPTANCE  HEREOF  AGREES  TO OFFER,  SELL OR
OTHERWISE  TRANSFER  THIS  SECURITY  ONLY (A) TO THE COMPANY,  (B) PURSUANT TO A
REGISTRATION  STATEMENT  THAT HAS BEEN DECLARED  EFFECTIVE  UNDER THE SECURITIES
ACT,  (C) TO A  PERSON  WHOM  THE  SELLER  REASONABLY  BELIEVES  IS A  QUALIFIED
INSTITUTIONAL  BUYER IN A TRANSACTION  MEETING THE  REQUIREMENTS OF RULE 144A SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE
WITH  RULE  144A,  (D)  TO A  NON-U.S.  PERSON  IN AN  OFFSHORE  TRANSACTION  IN
ACCORDANCE  WITH RULE 903 OR RULE 904 (AS  APPLICABLE) OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPH  (A) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SECURITY  FOR  ITS OWN  ACCOUNT,  OR FOR THE  ACCOUNT  OF SUCH AN  INSTITUTIONAL
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,  OR (F)  PURSUANT  TO ANY OTHER  AVAILABLE  EXEMPTION  FROM THE
REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT
PRIOR TO ANY SUCH OFFER,  SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL,  CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM
IN  ACCORDANCE  WITH THE  INDENTURE,  A COPY OF WHICH MAY BE  OBTAINED  FROM THE
COMPANY.

     THE  HOLDER  OF  THIS  SECURITY  BY  ITS  ACCEPTANCE  HEREOF  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
EMPLOYMENT  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 THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH
PURCHASER  OR HOLDER IS  ELIGIBLE  FOR  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 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 THE
SECURITIES  OR ANY INTEREST  THEREIN WILL BE DEEMED TO HAVE  REPRESENTED  BY ITS
PURCHASE AND HOLDING THEREOF 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

<PAGE>

ANY  EMPLOYEE  BENEFIT  PLAN OR PLAN TO  FINANCE  SUCH  PURCHASE,  OR (ii)  SUCH
PURCHASE WILL NOT RESULT IN A PROHIBITED  TRANSACTION UNDER SECTION 406 OR ERISA
OR  SECTION  4975 OF THE CODE FOR  WHICH  THERE IS NO  APPLICABLE  STATUTORY  OR
ADMINISTRATIVE EXEMPTION.

     THIS SECURITY WILL BE ISSUED AND MAY BE  TRANSFERRED  ONLY IN BLOCKS HAVING
AN AGGREGATE  PRINCIPAL  AMOUNT OF NOT LESS THAN  $500,000.00  AND  MULTIPLES OF
$1,000.00 IN EXCESS THEREOF.  ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK
HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $500,000.00 SHALL BE DEEMED TO
BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.

     THE HOLDER OF THIS  SECURITY  AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

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

         Floating Rate Junior Subordinated Deferrable Interest Debenture

                                       of

                                  BNCCORP, INC.

                                  July 31, 2001

     BNCCORP,  Inc., a Delaware  corporation  (the "Company" which term includes
any  successor  Person under the Indenture  hereinafter  referred to), for value
received  promises to pay to State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity but solely as Institutional
Trustee for BNC Statutory  Trust II (the  "Holder") or registered  assigns,  the
principal sum of Fifteen Million Four Hundred Sixty Four Thousand  ($15,464,000)
on July 31, 2031,  and to pay interest on said principal sum from July 31, 2001,
or from the most recent  interest  payment  date (each such date,  an  "Interest
Payment Date") to which  interest has been paid or duly provided for,  quarterly
(subject to deferral as set forth herein) in arrears on October 31,  January 31,
April 30 and July 31 of each year commencing October 31, 2001, at an annual rate
equal to 7.29%  beginning on (and  including) the date of original  issuance and
ending  on (but  excluding)  October  31,  2001 and at an  annual  rate for each
successive  period  beginning  on (and  including)  October 31,  2001,  and each
succeeding  Interest  Payment  Date,  and  ending  on (but  excluding)  the next
succeeding  Interest  Payment  Date  (each a  "Distribution  Period"),  equal to
3-Month LIBOR,  determined as described below,  plus 3.58%;  provided,  however,
that prior to July 31,  2011,  such  annual  rate shall not exceed  12.50%  (the
"Coupon  Rate")  applied to the  principal  amount  hereof,  until the principal
hereof is paid or duly provided for or made  available  for payment,  and on any
overdue  principal  and  (without  duplication)  on any overdue  installment  of
interest at the same rate per annum,  compounded quarterly,  from the dates such
amounts  are due until  they are paid or made  available  for  payment.  As used
herein,  "Determination  Date"  means the date that is two London  Banking  Days
(i.e., a day in which dealings in deposits in U.S. dollars are transacted in the
London interbank market) preceding the commencement of the relevant Distribution
Period.  The amount of  interest  payable for any period will be computed on the
basis of the actual number of days in the Distribution  Period concerned divided
by 360.  In the  event  that any  date on  which  interest  is  payable  on this
Debenture is not a Business Day, then a payment of the interest  payable on such
date  will be made on the  next  succeeding  day  which is a  Business  Day (and
without any  interest  or other  payment in respect of any such  delay),  except
that, if such Business Day is in the next succeeding calendar year, such payment

<PAGE>
shall be made on the immediately  preceding  Business Day, in each case with the
same force and effect as if made on the date the payment was originally payable.
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 Debenture (or one or more  Predecessor  Securities) is
registered at the close of business on the regular record date for such interest
installment,  which shall be fifteen days prior to the day on which the relevant
Interest  Payment Date occurs.  Any such interest  installment not so punctually
paid or duly provided for shall  forthwith  cease to be payable to the Holder on
such  regular  record  date and may be paid to the  Person  in whose  name  this
Debenture (or one or more Predecessor  Securities) is registered at the close of
business on a special record date.

     "3-Month LIBOR" as used herein, means the London interbank offered rate for
three-month Eurodollar deposits determined by the Trustee in the following order
of priority:  (i) the rate  (expressed as a percentage per annum) for Eurodollar
deposits having a three-month  maturity that appears on Telerate Page 3750 as of
11:00 a.m.  (London time) on the particular  Determination  Date ("Telerate Page
3750" means the  display  designated  as "Page  3750" on the Dow Jones  Telerate
Service  or such  other page as may  replace  Page 3750 on that  service or such
other  service  or  services  as  may  be  nominated  by  the  British  Bankers'
Association  as the  information  vendor for the  purpose of  displaying  London
interbank offered rates for U.S. dollars  deposits);  (ii) if such rate does not
appear on Telerate Page 3750 as of 11:00 a.m. (London time) on the Determination
Date,  3-Month  LIBOR will be the  arithmetic  mean of the rates  (expressed  as
percentages  per annum) for Eurodollar  deposits  having a three-month  maturity
that appear on Reuters Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of
11:00 a.m. (London time) on such Determination Date; (iii) if such rate does not
appear  on  Reuters  Page LIBO as of 11:00  a.m.  (London  time) on the  related
Determination  Date,  the Trustee will request the principal  London  offices of
four leading banks in the London interbank market to provide such banks' offered
quotations  (expressed  as  percentages  per annum) to prime banks in the London
interbank  market for Eurodollar  deposits  having a three-month  maturity as of
11:00 a.m. (London time) on such Determination  Date. If at least two quotations
are provided, 3-Month LIBOR will be the arithmetic mean of such quotations; (iv)
if fewer than two such  quotations  are  provided as  requested  in clause (iii)
above,  the Trustee  will request four major New York City banks to provide such
banks'  offered  quotations  (expressed  as  percentages  per  annum) to leading
European banks for loans in  Eurodollars as of 11:00 a.m.  (London time) on such
Determination Date. If at least two such quotations are provided,  3-Month LIBOR
will be the arithmetic mean of such  quotations;  and (v) if fewer than two such
quotations are provided as requested in clause (iv) above, 3-Month LIBOR will be
a 3-Month LIBOR determined with respect to the Distribution  Period  immediately
preceding such current  Distribution Period. If the rate for Eurodollar deposits
having a three-month  maturity that  initially  appears on Telerate Page 3750 or
Reuters  Page LIBO,  as the case may be, as of 11:00 a.m.  (London  time) on the
related  Determination  Date is  superseded on the Telerate Page 3750 or Reuters
Page LIBO,  as the case may be, by a corrected  rate by 12:00 noon (London time)
on such  Determination  Date,  then the corrected  rate as so substituted on the
applicable  page will be the  applicable  3-Month  LIBOR for such  Determination
Date.

     The Coupon Rate for any Distribution  Period will at no time be higher than
the maximum  rate then  permitted by New York law as the same may be modified by
United States law.

     All percentages  resulting from any  calculations on the Debentures 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).

     The  principal  of and interest on this  Debenture  shall be payable at the
office or agency of the Trustee (or other paying agent appointed by the Company)

<PAGE>

maintained  for that  purpose 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; provided,  however, that payment of interest may be made by check
mailed to the registered holder at such address as shall appear in the Debenture
Register if a request for a wire  transfer by such holder has not been  received
by the Company or by wire transfer to an account appropriately designated by the
holder  hereof.  Notwithstanding  the  foregoing,  so long as the holder of this
Debenture  is the  Institutional  Trustee,  the payment of the  principal of and
interest on this Debenture will be made in immediately  available  funds at such
place and to such account as may be designated by the Trustee.

     So long as no Event of Default has occurred and is continuing,  the Company
shall  have the  right,  from  time to time,  and  without  causing  an Event of
Default,  to defer  payments of  interest on the  Debentures  by  extending  the
interest  payment  period  on the  Debentures  at any time and from time to time
during the term of the Debentures,  for up to 20 consecutive  quarterly  periods
(each such extended  interest  payment period,  an "Extension  Period"),  during
which Extension Period no interest shall be due and payable. No Extension Period
may end on a date other than an Interest  Payment  Date.  At the end of any such
Extension  Period the Company  shall pay all interest then accrued and unpaid on
the Debentures (together with Additional Interest thereon);  provided,  however,
that no Extension Period may extend beyond the Maturity Date;  provided further,
however,  that during any such Extension Period, the Company shall not and shall
not permit any  Affiliate to (i) declare or pay any  dividends or  distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's or such  Affiliate's  capital stock (other than payments of
dividends or distributions  to the Company) or make any guarantee  payments with
respect to the foregoing or (ii) make any payment of principal of or interest or
premium,  if any, on or repay,  repurchase or redeem any debt  securities of the
Company or any Affiliate  that rank pari passu in all respects with or junior in
interest to the  Debentures  (other  than,  with respect to clauses (i) and (ii)
above, (a) repurchases,  redemptions or other  acquisitions of shares of capital
stock of the Company in connection with any employment contract, benefit plan or
other  similar  arrangement  with or for the  benefit of one or more  employees,
officers,  directors or consultants,  in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities  convertible  into or  exercisable  for such
capital stock) as consideration in an acquisition transaction entered into prior
to  the  applicable  Extension  Period,  (b) as a  result  of  any  exchange  or
conversion of any class or series of the Company's capital stock (or any capital
stock of a subsidiary  of the Company) for any class or series of the  Company's
capital  stock or of any class or series of the Company's  indebtedness  for any
class or series of the Company's  capital stock,  (c) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange  provisions  of such capital stock or the security  being  converted or
exchanged,   (d)  any   declaration  of  a  dividend  in  connection   with  any
stockholder's  rights plan, or the issuance of rights,  stock or other  property
under any  stockholder's  rights plan, or the redemption or repurchase of rights
pursuant thereto,  (e) any dividend in the form of stock,  warrants,  options or
other rights where the dividend  stock or the stock  issuable  upon  exercise of
such  warrants,  options or other  rights is the same stock as that on which the
dividend  is being paid or ranks pari passu with or junior to such stock and any
cash payments in lieu of fractional  shares issued in connection  therewith,  or
(f) payments under the Capital Securities  Guarantee).  Prior to the termination
of any Extension  Period,  the Company may further extend such period,  provided
that  such  period  together  with all such  previous  and  further  consecutive
extensions thereof shall not exceed 20 consecutive  quarterly periods, or extend
beyond the Maturity Date. Upon the termination of any Extension  Period and upon
the payment of all accrued and unpaid  interest  and  Additional  Interest,  the
Company  may  commence  a  new  Extension  Period,   subject  to  the  foregoing
requirements. No interest or Additional Interest shall be due and payable during
an Extension Period, except at the end thereof, but each installment of interest
that would  otherwise  have been due and payable  during such  Extension  Period
shall bear Additional Interest.  The Company must give the Trustee notice of its
election to begin such  Extension  Period at least 5 Business  Days prior to the
earlier of (i) the date  interest  on the  Debentures  would  have been  payable

<PAGE>

except for the  election  to begin such  Extension  Period or (ii) the date such
interest  is  payable,  but in any event not less than 5 Business  Days prior to
such record date.

     The indebtedness  evidenced by this Debenture is, to the extent provided in
the Indenture,  subordinate  and junior in right of payment to the prior payment
in full of all Senior Indebtedness,  and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions,  (b)
authorizes  and  directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate  to acknowledge or effectuate the  subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes.  Each holder hereof, by his or her acceptance hereof,  hereby
waives all notice of the acceptance of the  subordination  provisions  contained
herein and in the Indenture by each holder of Senior  Indebtedness,  whether now
outstanding or hereafter incurred,  and waives reliance by each such holder upon
said provisions.

     This  Debenture  shall not be entitled to any benefit  under the  Indenture
hereinafter referred to, 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.

     Capitalized  terms used and not  defined in this  Debenture  shall have the
meanings  assigned  in the  Indenture  dated  as of the  date of this  Debenture
between the Trustee and the Company.

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

                                    BNCCORP, INC.


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


                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

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

                                    State  Street  Bank and Trust  Company  of
                                    Connecticut,   National  Association,   as
                                    Trustee


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



</TEXT>
</DOCUMENT>
