Marketing

           We are one of the largest operators of company-controlled convenience stores in the United States. For the twelve months ended December 31, 1999, our network of approximately 4,700 retail outlets, approximately 2,000 of which are company-controlled and operated under the "Circle K" brand, sold approximately 4.5 billion gallons of gasoline and diesel fuel, and over $2.0 billion in convenience store merchandise.

           Our retail outlets, including the Exxon Mobil assets recently acquired, are located in 32 states, sell transportation fuels under such well-known brands as "76", "BP", "Exxon" and "Mobil", and convenience store merchandise under the recognized "Circle K" brand. We own the "76" trademark for retail fuel marketing worldwide and have rights to the "Exxon" brand in Arizona through 2001. We also have the exclusive right for ten years to use the "Exxon" brand from New York through Maine and the "Mobil" brand from New Jersey through Virginia. In addition, our "76" brand is the Official Fuel of NASCAR(R)and in 1998, "Circle K" was named the Official Convenience Store of NASCAR(R). We are currently in the process of rebranding many of our gasoline stations to capitalize on the strength of our "76" and "Circle K" brand names.

           The major assets in our marketing operations at June 30, 2000 include:

          2,150 company-operated retail outlets;
          2,140 company-controlled, dealer-operated retail outlets;
          1,760 independently owned retail outlets;
              70 fee operated retail outlets; and
            290 franchise locations.

Recent Events

Exxon Mobil Acquisition

           On February 28, 2000, we acquired from Exxon Corporation and Mobil Oil Corporation retail systems consisting of approximately 1,740 retail gasoline and convenience outlets for $860 million. We also acquired undeveloped sites and distribution terminals, all of which Exxon Mobil divested under a Federal Trade Commission consent decree. The acquired stations comprised the Exxon system from New York through Maine (the "Northeast Territory") and the Mobil system from New Jersey through Virginia (the "Middle Atlantic Territory"). The outlets include approximately 685 owned or leased sites and approximately 1,055 additional open dealers and branded distributor sites. The new sites complement our existing East Coast retail network, which is comprised of over 700 stations located in the Southeast and a smaller "BP" jobber network in the Northeast. We have the exclusive right to use the "Exxon" brand in the Northeast Territory and the "Mobil" brand in the Middle Atlantic Territory for ten years and the products and services associated with each brand. Our two East Coast refineries, which produce approximately 19 million gallons of petroleum products each day, supplies this retail outlet system.

           The purchase price for the acquisition, including working capital, was derived from a combination of the proceeds of the February 2000 offering of $400 million of 8 1/8% notes due February 15, 2030, $600 million of off-balance sheet lease financing, our available cash, and borrowings under our revolving credit agreement.

Acquisition of Wood River Refinery

           On June 1, 2000, we acquired from Equilon Enterprises LLC (a joint venture of Texaco Inc. and Shell Oil Co.) the Wood River Refinery and Chemical Complex, both located in Madison County, Illinois. The purchase price, including inventories, of $807.0 million consisted of cash and liabilities assumed. The Wood River Refinery has a refining capacity of 295,000 barrels per day. As part of the acquisition, we entered into a product offtake agreement with Equilon Trading Company for a substantial portion of Wood River's gasoline and diesel production. The initial term of this agreement is 15 years, with mutual options to extend thereafter.

           The purchase price for the acquisition, including working capital, was derived from a combination of the proceeds of the April 2000 public offering of $200 million of 8 1/8% notes due February 15, 2030, the private placement of $300 million principal amount of floating rate notes in two equal series due May 16, 2001 and November 16, 2001, our available cash, and borrowings under our revolving credit agreement.

Sale of Avon Refinery

           On August 31, 2000, we sold our Avon Refinery, located on San Francisco Bay, to Ultramar Diamond Shamrock Corporation of San Antonio, Texas for $650 million cash at closing, together with approximately $149 million of related crude oil and other hydrocarbon inventories. In addition, we will be entitled to contingent payments totaling up to $150 million during the next eight years in the event that refining margins exceed certain defined levels.

Acquisition of Alliance Refinery

           On September 8, 2000, we acquired the Alliance Refinery in Louisiana from BP Amoco. The purchase price was $658 million, plus approximately $281 million of related crude oil and other hydrocarbon inventories. The refinery is a modern 250,000 barrels per day clean fuels and petrochemical complex. The purchase price for the acquisition, including working capital, was derived from a combination of the proceeds from the sale of the Avon Refinery, our available cash and borrowings under our revolving credit agreement.

Revolving Credit Facility

           In September 2000, we increased the amount available to be borrowed under our revolving credit facility from $750 million to $1 billion.

Irish National Petroleum Corporation Acquisition

           On July 31, 2000, we announced that we had entered into an agreement to purchase substantially all of the assets of the Irish National Petroleum Corporation Limited. The principal assets to be acquired are a 75,000 per day refinery located in Cork, Ireland and a 8.5 million barrel deep water crude oil and oil products storage complex in Bantry Bay, Ireland. The purchase price is $100 million plus the value of crude oil and products inventory at closing. The purchase has been approved by our Board of Directors. Completion of the purchase is subject to the satisfaction of certain conditions, including regulatory approvals.

USE OF PROCEEDS

           Unless otherwise set forth in the applicable prospectus supplement, we intend to use the net proceeds from the sale of the securities to repay indebtedness outstanding under our revolving credit agreement and for working capital and general corporate purposes. One-half of our new revolving credit agreement matures in February 2005, and the other half matures in February 2001. Our revolving credit agreement bears interest at a margin over one of several fluctuating rates. The interest rate on loans under our prior revolving credit agreement averaged 5.65% for the year ended December 31, 1999. In 1999, borrowings under our prior revolving credit agreement were used for working capital and general corporate purposes.

RATIOS OF EARNINGS TO FIXED
CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS

           The following table sets forth our ratio of earnings to fixed charges for the periods indicated:

     Six Months Ended
         June 30,                    Year Ended December 31,
     -----------------       ------------------------------------------
     2000         1999       1999(a)  1998(a)   1997    1996     1995
     -----------------       -------  -------   -----   -----    -----
     4.31x       3.08x        5.17x    1.91x    2.76x   2.99x    2.49x

           For purposes of computing the above ratio, earnings consist of consolidated income from operations before income taxes and fixed charges. Fixed charges consist of interest on outstanding debt, distributions on Trust Preferred Securities, one third (the proportion deemed representative of the interest factor) of net rentals, and amortization of debt discount and expense. We did not have any preferred stock outstanding during the periods indicated.

DESCRIPTION OF DEBT SECURITIES

           The following description of the terms of the debt securities sets forth certain general terms and provisions of the debt securities to which any prospectus supplement may relate. Any particular terms of the debt securities offered by any prospectus supplement will be described in such prospectus supplement.

           Senior debt securities will be issued in one or more series under an indenture dated as of May 1, 1996, to be supplemented by one or more supplemental indentures between us and State Street Bank and Trust Company, as trustee. The indenture relating to senior debt securities is an exhibit to the Registration Statement. Subordinated debt securities will be issued in one or more series under a separate indenture between us and the trustee. An indenture relating to subordinated debt securities will be filed in connection with any offering of subordinated debt. You can inspect the indentures at the corporate trust office of the trustee at 2 Avenue de Lafayette, Boston, Massachusetts or as described above under "Where You Can Find More Information."

           This section, along with the description in the applicable prospectus supplement, is a summary of the material provisions of the applicable indenture and is not complete. It does not restate the indentures in their entirety. This section, and the description in the applicable prospectus supplement, is qualified in its entirety by the provisions of the indentures. We urge you to read the indentures because they, and not these descriptions, define your rights as a holder of the debt securities. Whenever defined terms are used, but not defined in this prospectus, the terms have the meanings given them in the applicable indenture.

General

           The indenture relating to senior debt securities provides that:

           The indenture relating to subordinated debt provides that:

           Each prospectus supplement and any applicable pricing supplement will describe the terms of any debt securities we issue. The terms may include:

           Unless otherwise provided in the prospectus supplement relating to the offering of any debt securities, principal and interest, if any, will be payable, and the debt securities will be transferable and exchangeable, at the office or offices or agency maintained by us for such purposes, provided that payment of interest on the debt securities will be paid at such place of payment by check mailed to the persons entitled thereto at the addresses of such persons appearing on the Security Register.

           Debt securities may be exchanged for an equal aggregate principal amount of debt securities of the same series and date of maturity, upon surrender of the debt securities at an agency we maintain for such purpose and upon fulfillment of all other requirements of such agent. No service charge will be made for any transfer or exchange of the debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

           Debt securities may bear interest at a fixed or a floating rate. We may issue debt securities bearing no interest or interest at a rate which, at the time of issuance, is below the prevailing market rate. If so, these will be sold at a discount below their stated principal amount. If material or applicable, the applicable prospectus supplement will describe any special United States federal income tax considerations applicable to these debt securities or to certain debt securities.

           Pursuant to the indentures, we must file annually with the trustee a certificate as to compliance with all conditions and covenants contained in the indentures.

           The indentures do not contain any provisions that would afford holders protection in the event of a highly leveraged or similar transaction involving us.

           We refer you to the description of any additional covenants listed in the applicable prospectus supplement. Except as otherwise described in the applicable prospectus supplement, our Board of Directors or the trustee can waive, with respect to a series of debt securities, compliance with such covenants, only if the holders of a majority in principal amount of all outstanding debt securities of such series consent to the waiver. These covenants may also be modified to the extent that the defeasance and covenant defeasance provisions of the indentures apply to such series of debt securities. See "Modification of the Indentures."

Subordination of Subordinated Debt Securities

           Unless otherwise indicated in the prospectus supplement, the following provisions will apply to the subordinated debt securities:

          For purposes of the subordination provisions, the payment, issuance and delivery of cash, property or securities (other than our stock and certain of our subordinated securities) upon conversion of a subordinated debt security will be deemed to constitute payment on account of the principal of such subordinated debt security.

          Senior debt means the principal of (and premium, if any) and interest, if any (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to us to the extent that such claim for post-petition interest is allowed in such proceeding), on indebtedness for borrowed money, whether incurred on or before the date of the subordinated indenture or thereafter incurred, unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligations are not superior in right of payment to the subordinated debt securities or to other indebtedness for borrowed money which is pari passu with, or subordinated to, the subordinated debt securities; provided, however, that senior debt shall not be deemed to include the subordinated debt securities.

          The subordinated indenture permits the incurrence of additional senior debt, including indebtedness senior to the subordinated debt securities, which is subordinate to our other obligations. Senior debt securities, when issued, will constitute senior debt.

          The prospectus supplement may describe additional provisions, if any, applicable to the subordination of the subordinated debt securities of a particular series.

Global Securities

          We may issue the debt securities of a series in the form of a global security (the "Global Security"). The Global Security will be deposited with, or on behalf of, Depository Trust Company, as depository.

          Upon the issuance of the Global Security, the depositary or its nominee will credit on its book-entry registration and transfer system the respective principal amounts of the individual debt securities represented by the Global Security to the accounts of persons that have accounts with such Depositary, the participants. Such accounts shall be designated by the underwriters, if any. Ownership of beneficial interests in the Global Security will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests in the Global Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the depositary or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons who hold through participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interests in the Global Security.

          So long as the depositary, or its nominee, is the registered owner of the Global Security, the depositary or the nominee, as the case may be, will be considered the sole owner or holder of the debt securities represented by the Global Security for all purposes under the indentures. Except as provided below, only the depository or its nominee may:

          Payments of principal of (and premium, if any) and interest, if any on individual debt securities represented by the Global Security registered in the name of the depositary or its nominee will be made to the depositary or its nominee as the registered owner of the Global Security. We, the trustee, any paying agent, or the securities registrar for the debt securities will have no responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interest of the Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

          We have been advised by the depositary that, upon receipt of any payment of principal, premium or interest in respect of the Global Security, the depositary immediately will credit participants' accounts with payments in amounts proportionate to their respective beneficial interest in the principal amount of the Global Security, as shown on the depository's records. Payments by participants to owners of beneficial interests in the Global Security held through such participants will be governed by standing instructions and customary practices. Such payments will be the responsibility of the participants.

          If the depositary is at any time unwilling, unable or ineligible to continue as depositary and a successor depositary is not appointed by us within 90 days, we will issue debt securities in definitive registered form in exchange for the Global Security. In addition, we may at any time and in our sole discretion determine to have no debt securities of a series represented by one or more Global Securities. If that is the case, we will issue debt securities in definitive registered form in exchange for the Global Security for such series. If we so specify, an owner of a beneficial interest in the Global Security may, on terms acceptable to us, the trustee and the depositary, receive debt securities in definitive registered form in exchange for such beneficial interests. In any such instance, an owner of a beneficial interest in the Global Security will be entitled to physical delivery of debt securities in definitive registered form equal in principal amount to such beneficial interest which will be issued in denominations of $1,000 and integral multiples thereof, unless we specify otherwise.

          Each person owning a beneficial interest in a Global Security for a series of debt securities must rely on the depository's procedures and, if such person is not a participant, on the participant's procedures, to exercise any rights of a holder of securities under the indentures. The depositary may grant proxies and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to give or take under the indentures. Under existing industry practices, if we request any action of holders or that an owner of a beneficial interest in the Global Security desires to give or take any action to which a holder is entitled to give or take under the indentures, the depositary would authorize the participants holding the relevant beneficial interests to give or take such action, and the participants would then authorize beneficial owners owning through such participants to give or take such action or otherwise act upon the instructions of such beneficial owners.

          The depositary has advised us that it is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered under the Exchange Act. The depositary was created to hold the securities of its participants and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. The depositary's participants include securities brokers and dealers (including the underwriters, if any), banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or the representatives) own the depositary. Access to the depositary's book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant either directly or indirectly.

Merger, Consolidation, Sale or Conveyance

          We may consolidate with, or sell, lease or convey all or substantially all of our assets to, or merge with or into, any other entity, provided that:

Covenants

          Any applicable covenant concerning the debt securities will be described in the applicable prospectus supplement.

Events of Default, Notice and Waiver

          The following events are "Events of Default" with respect to any series of debt securities issued under the indentures:

          Events of Default may be added or changed for the benefit of holders of certain series of debt securities. Any additions or changes will be described in the applicable prospectus supplement. The indentures provide that unless the default has been cured or waived, the trustee will notify the holders of debt securities within 90 days of such continuing default under the indentures; provided, however, that the trustee may withhold notice to the holders of any series of debt securities of any default with respect to such series if the trustee determines that such withholding is in the best interest of such holders.

          If an Event of Default (other than as described in clause (d) above) with respect to any series of debt securities has occurred and is continuing, either the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding debt securities of that series may declare the principal amount of (and accrued and unpaid interest on) all debt securities of that series immediately due and payable. This acceleration may be annulled under certain circumstances. If an Event of Default described in clause (d) above has occurred and is continuing, the principal amount of (and accrued and unpaid interest on) all debt securities of all series will be immediately due and payable, without any declaration or other act by the trustee or any holder.

          Holders of a majority in principal amount of the outstanding debt securities of any series of debt securities then outstanding under the indentures may waive:

          If an Event of Default has occurred and is continuing, the trustee must exercise any of its rights or powers under the indentures at the request or direction of the holders of any series of debt securities only if holders of such series of debt securities then outstanding have offered to the trustee reasonable security or indemnity. The holders of a majority in principal amount of the outstanding debt securities of each outstanding series which is affected shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or of exercising any trust or power conferred upon the trustee with respect to the debt securities of that series. Subject to certain limitations, the trustee may refuse to follow any direction which is in conflict with any law or the indentures.

          If the trustee fails to act for 60 days after it has received (1) a written request to institute proceedings in respect of an Event of Default from the holders of 25% in principal amount of the outstanding debt securities of the affected series, (2) an offer of reasonable indemnity and (3) no inconsistent direction from the holders of a majority in aggregate principal amount of the outstanding debt securities of such series, the holders of debt securities of any series can institute any proceedings at law or in equity or in bankruptcy or otherwise with respect to the indentures or for any remedy under the indentures. The right of a holder of any debt security to receive payment of the principal of and any interest on such debt security on or after the due dates expressed in such debt security, or to institute suit for the enforcement of any such payment on or after such dates, shall not be impaired or affected without the consent of such holder.

Satisfaction and Discharge of Indentures

           The indentures with respect to any series (except for certain specified surviving obligations including, among other things, our obligation to pay the principal of and interest on the debt securities of such series) will be discharged and canceled upon the satisfaction of certain conditions, including: (1) the payment of all principal of and interest on all the debt securities of such series or the deposit with the trustee of cash or appropriate government obligations or (2) a combination thereof sufficient for such payment or redemption in accordance with the indentures and the terms of the debt securities of such series.

Modification of the Indentures

          The indentures may be supplemented, modified and amended with the consent of the holders of a majority in principal amount of all outstanding debt securities or series of outstanding debt securities which are affected by such modification or amendment. Only with the consent of each holder of any debt security affected, may an amendment or modification to the indentures:

          Holders of a majority in principal amount of a series of outstanding debt securities may waive our compliance with certain covenants relating to any series of debt securities in the indentures.

          In certain prescribed instances, we and the trustee may execute supplemental indentures without the consent of any holder of debt securities, including establishing the form or terms of debt securities of any series.

Discharge, Defeasance and Covenant Defeasance

          We may discharge certain obligations to holders of any series of debt securities that have not already been delivered to the trustee for cancellation and that either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by irrevocably depositing with the trustee, in trust, funds in such currency or currencies, currency unit or units or composite currency or currencies in which such debt securities are payable in an amount sufficient to pay the entire indebtedness on such debt securities in respect of principal (and premium, if any) and interest to the date of such deposit (if such debt securities have become due and payable) or to the maturity or redemption date, as the case may be.

          If the indentures' defeasance provisions are made applicable to the debt securities of or within any series, we may elect either (a) to terminate all of our obligations with respect to such debt securities ("defeasance") or (b) to release ourself from obligations with respect to such debt securities under the indentures upon the irrevocable deposit by us with the trustee, in trust for such purposes, of funds (which may include obligations to the government), which through the scheduled payment of principal and interest, will provide money in an amount sufficient to pay the principal of (and premium, if any) and interest on such debt securities, and any mandatory sinking fund or analogous payments, when due. We will be required to pay additional amounts, if any, upon the occurrence of certain events of tax, assessment or governmental charge with respect to payments on the debt securities. We will retain the obligations to register the transfer or exchange of such debt securities, to replace temporary or mutilated, destroyed, lost or stolen debt securities, to maintain an office or agency in respect of such debt securities and to hold moneys for payment in trust.

          We can establish such a trust if, among other things, we have delivered to the trustee an opinion of counsel stating that:

          The applicable prospectus supplement may further describe the provisions, if any, permitting such defeasance or covenant defeasance, including any modifications to the provisions described above, with respect to the debt securities of or within a particular series.

Applicable Law

          The debt securities and the indentures will be governed by, and construed in accordance with, the laws of the State of New York.

Concerning the trustee

          The trustee may provide various commercial banking services to us from time to time. Upon the occurrence of an event of default or an event which, after notice of lapse of time or both, would become an event of default, or upon the occurrence of a default under any other indenture, the trustee may be deemed to have a conflicting interest with respect to the debt securities for purposes of the Trust Indenture Act of 1939 and, unless the trustee is able to eliminate any such conflicting interest, the trustee may be required to resign as trustee under either the subordinated or senior indenture. In that event, we would be required to appoint a successor trustee for such indentures.

General

          We are authorized to issue 12,000,000 shares of preferred stock, $1.00 par value per share. No shares of preferred stock are issued or outstanding.

          The statements below describing the preferred stock are in all respects subject to and qualified by reference to the applicable provisions of our Articles of Incorporation and Bylaws and any applicable certificate of designations designating terms of a series of preferred stock.

          The issuance of preferred stock could adversely affect the voting power, dividend rights and other rights of holders of common stock. Issuance of preferred stock could impede, delay, prevent or facilitate a merger, tender offer or change in our control. Although our Board of Directors is required to make a determination as to the best interests of our stockholders when issuing preferred stock, the Board of Directors could act in a manner that would discourage an acquisition attempt or other transaction that some, or a majority, of the stockholders might believe to be in our best interests or in which stockholders might receive a premium for their shares over the then prevailing market price. Our management believes that the availability of preferred stock will provide us with increased flexibility in structuring possible future financing and acquisitions and in meeting other needs that might arise.

Terms

          Subject to the limitations prescribed by the Articles of Incorporation, the Board of Directors can fix the number of shares constituting each series of preferred stock and the designations and powers, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof, including such provisions as may be desired concerning voting, redemption, dividends, dissolution or the distribution of assets, conversion or exchange, and such other subjects or matters as may be fixed by resolution of the Board of Directors. When issued, the preferred stock will be fully paid and nonassessable by us. The preferred stock will have no preemptive rights.

          Reference is made to the prospectus supplement relating to the preferred stock offered thereby for specific terms, including:

Rank

          Unless otherwise specified in the prospectus supplement, the preferred stock will, with respect to dividend rights and rights upon liquidation, dissolution or our winding up, rank:

          The term "equity securities" excludes convertible debt securities.

Dividends

          Holders of the preferred stock of each series will be entitled to receive, when and if declared by our Board of Directors, out of funds legally available for payment, cash dividends at rates and on dates set forth in the applicable prospectus supplement. Dividends may be based on different rates, which may be fixed or variable. Each such dividend will be payable to holders of record as they appear on our share transfer books on the applicable record dates. Our Board of Directors will fix the record dates for dividend payments.

          As provided in the applicable prospectus supplement, dividends on any series of the preferred stock may be cumulative or non-cumulative. Cumulative dividends will be cumulative from and after the date set forth in the applicable prospectus supplement. If our Board of Directors fails to declare a dividend payable on a dividend payment date on any series of the preferred stock for which dividends are non-cumulative, then the holders of such series of the preferred stock will have no right to receive a dividend for the dividend period ending on such dividend payment date. We will have no obligation to pay the dividend accrued for such dividend period, whether or not dividends on such series are declared payable on any future dividend payment date.

          If preferred stock of any series is outstanding, our Board of Directors will not declare, pay or set apart for payment dividends on any of our capital stock of any other series ranking, as to dividends, equally with or junior to the preferred stock outstanding for any period unless:

          When dividends are not paid in full (or a sum sufficient for such full payment is not set apart) upon preferred stock of any series and the shares of any other series of preferred stock ranking equally as to dividends with the preferred stock of such series, all dividends declared upon preferred stock of such series and any other series of preferred stock ranking equally as to dividends with such preferred stock shall be declared pro rata so that the amount of dividends declared per share of preferred stock of such series and such other series of preferred stock shall in all cases bear to each other the same ratio that accrued dividends per share on the preferred stock of such series (which shall not include any accumulation of unpaid dividends for prior dividend periods if such preferred stock lacks a cumulative dividend) and such other series of preferred stock bear to each other. Interest, or sums of money instead of interest, shall not be payable for any dividend payment or payments on preferred stock of such series which may be in arrears.

          Except as provided in the immediately preceding paragraph, unless we have paid dividends through the then current dividend period (including dividend payments in arrears if dividends are cumulative) for such series of preferred stock or unless our Board of Directors has declared such dividends and has set aside a sum sufficient for such payment, our Board of Directors shall not declare dividends (other than in shares of common stock or other capital shares ranking junior to the preferred stock of such series as to dividends and upon liquidation) or pay or set aside for payment or declare or make any other distribution upon the common stock, or any other of our capital shares ranking junior to or equally with the preferred stock of such series as to dividends or upon liquidation. Additionally, we shall not redeem, purchase or otherwise acquire for any consideration (or any moneys to be paid or made available for a sinking fund for the redemption of any such shares) any shares of common stock, or any other of our capital shares ranking junior to or equally with the preferred stock of such series as to dividends or upon liquidation. Notwithstanding the foregoing, we may convert such shares into or exchange such shares for other of our capital shares ranking junior to the preferred stock of such series as to dividends and upon liquidation.

Redemption

          If the applicable prospectus supplement so provides, the preferred stock will be subject to mandatory redemption or redemption at our option, as a whole or in part, in each case upon the terms, at the times and at the redemption prices set forth in such prospectus supplement.

Liquidation Preference

          Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, then the holders of each series of preferred stock shall be entitled to receive out of our assets legally available for distribution to shareholders liquidating distributions in the amount of the liquidation preference per share, plus an amount equal to all dividends accrued and unpaid on such series of preferred stock. Such preferred shareholders will receive these distributions before any distribution or payment shall be made to the holders of any common stock or any other class or series of our capital shares ranking junior to the preferred stock in the distribution of assets upon our liquidation, dissolution or winding up.

          If liquidating distributions have been made in full to all holders of preferred stock, our remaining assets will be distributed among the holders of any other classes or series of capital shares ranking junior to the preferred stock upon liquidation, dissolution or winding up, according to their rights and preferences and in each case according to their number of shares. For such purposes, our consolidation or merger with or into any other corporation, trust or entity, or the sale, lease or conveyance of all or substantially all of our property or business, shall not be deemed to constitute our liquidation, dissolution or winding up.

Voting Rights

          Holders of the preferred stock will not have any voting rights, except as otherwise from time to time required by law or as indicated in the applicable prospectus supplement.

Conversion Rights

          The applicable prospectus supplement will set forth the terms and conditions, if any, upon which any series of preferred stock is convertible into shares of common stock. Such terms will include: (a) the number of shares of common stock into which the shares of preferred stock are convertible; (b) the conversion price (or manner of calculation thereof); (c) the conversion period; (d) provisions as to whether conversion will be at the option of the holders of the preferred stock or us; (e) the events requiring an adjustment of the conversion price; and (f) provisions affecting conversion in the event of the redemption of such series of preferred stock.

Shareholder Liability

          Applicable Nevada law provides that no shareholder, including holders of preferred stock, shall be personally liable for our acts and obligations and that our funds and property shall be the only recourse for such acts or obligations.

Registrar and Transfer Agent

          The applicable prospectus supplement will set forth the Registrar and Transfer Agent for the preferred stock.

      Securities and Exchange Commission registration fee...........  $744,744
      Printing and engraving expenses...............................    75,000
      Legal fees and expenses.......................................    75,000
      Accounting fees and expenses..................................    50,000
      Blue Sky fees and expenses....................................    10,000
      Trustee's fees................................................    10,000
      Miscellaneous expenses........................................    10,216
                                                                        ------

               Total................................................  $975,000

          Signature                  Title                         Date
          ---------                  -----                         ----


/s/ Thomas D. O'Malley        Chairman of the Board and         September 25, 2000
--------------------------    Chief Executive Officer
Thomas D. O'Malley


/s/ Jefferson F. Allen        President, Principal Financial    September 25, 2000
--------------------------    Officer  and Director
Jefferson F. Allen


/s/ Robert I. Santo           Vice President and Principal      September 25, 2000
-------------------------     Accounting Officer
Robert I. Santo


                              Director                          ______, 2000
-------------------------
Patrick M. de Barros


/s/ Wayne A. Budd             Director                          September 25, 2000
-------------------------
Wayne A. Budd


/s/ Houston I. Flournoy       Director                          September 25, 2000
-------------------------
Houston I. Flournoy


/s/ Edmund A. Hajim           Director                          September 25, 2000
-------------------------
Edmund A. Hajim


/s/ Charles J. Luellen        Director                          September 25, 2000
-------------------------
Charles J. Luellen


/s/ Eija Malmivirta           Director                          September 25, 2000
--------------------------
Eija Malmivirta


/s/ Mark R. Mulvoy            Director                          September 25, 2000
--------------------------
Mark R. Mulvoy


/s/ Kathryn L. Munro          Director                          September 25, 2000
--------------------------
Kathryn L. Munro