MFN FINANCIAL CORP
8-K, 1999-03-25
PERSONAL CREDIT INSTITUTIONS
Previous: FEDERAL AGRICULTURAL MORTGAGE CORP, 10-K, 1999-03-25
Next: LAKELAND BANCORP INC, 8-K/A, 1999-03-25



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


Date of Report (Date of earliest event reported) March 10, 1999

                            MFN Financial Corporation
               (Exact name of registrant as specified in charter)


Delaware                                1-10176               36-3627010

(State of other jurisdiction          (Commission           (IRS Employer
   of incorporation)                  File Number)        Identification No.)



                  100 Field Drive, Lake Forest, Illinois 60045
               (Address of principal executive offices) (Zip Code)



Registrant's telephone number, including area code (847) 295-8600




                         Mercury Finance Company
         (Former name or former address, if changed since last report)


<PAGE>


Item 3.  Bankruptcy or Receivership.

         On July 15, 1998, MFN Financial Corporation f/k/a Mercury Finance
Company, a Delaware corporation ("Mercury" or the "Company"), filed a voluntary
petition for relief in connection with its plan of reorganization under Chapter
11 of Title 11 of the United States Code in the United States Bankruptcy Court
(the "Court") for the Northern District of Illinois, which was assigned to the
Honorable Erwin I. Katz, U.S. Bankruptcy Judge, Case Number 21816 (the
"Voluntary Case"). The previously announced involuntary case, Case No. 98-20763,
which was filed on July 6, 1998 by several litigants in Mercury's pending
securities lawsuits and for which no order for relief was granted, was
consolidated with the Voluntary Case. The Voluntary Case has proceeded under
Case No.
98-20763.

         On March 10, 1999, the Court entered an order confirming the Company's
Second Amended Plan of Reorganization (the "Plan"). The effective date of the
Plan was March 23, 1999 (the "Effective Date"). The Plan is filed hereto as
Exhibit 2(a) to this Form 8-K and is incorporated herein by reference.

         Under the Plan, the Company's senior lenders will receive new senior
secured notes equal to 75 percent of the face value of their then current
outstanding balance after the receipt of Excess Cash (as defined in the Plan)
and their pro rata share of 9,500,000 shares of the initial equity of the
reorganized company. The holders of subordinated notes will receive $22.5
million in new junior unsecured subordinated notes.

         The shareholders of the Company will receive their pro rata share of
(i) 500,000 shares of the initial equity of the reorganized company and (ii)
three series of warrants, each exercisable for 580,000 shares of the common
stock of the reorganized company, with expiration dates of three, four and five
years, respectively, from the effective date of the Plan. The exercise price of
the Series A Warrants will be $15.34, the exercise price of the Series B
Warrants will be $21.81 and the exercise price of the Series C Warrants will be
$28.27.

         Pursuant to the Plan, the Company will transfer to a certain trust
established under the Plan (the "Liquidating Trust"), on the Effective Date, (i)
$5 million in cash, (ii) the Company's claims against KPMG Peat Marwick and
(iii) $250,000 in cash for fees and costs to be incurred in connection with the
Liquidating Trust. Holders of Securities Fraud Claims (as defined in the Plan)
will receive a share of the beneficial interests in the Liquidating Trust in
complete settlement, satisfaction and discharge of their claims. In accordance
with the Plan, the Company will also pay (i) $13.35 million into funds
established for the benefit of holders of certain indemnification claims against
the Company on the Effective Date and (ii) upon verification, costs and expenses
of officers, agents and employees who are no longer employed by the Company as
of the first day immediately following the Effective Date (other than the claims
of the estate of James A. Doyle and John N. Brincat in respect of which no
obligations shall be assumed), to the extent such costs and expenses are
incurred after the Effective Date in connection with their participation in an
agency or government investigation, which costs and expenses are limited to
$250,000 in the aggregate. The Company has also agreed to (i) pay John N.
Brincat $100,000 and (ii) release Mr. Brincat from all claims the Company may
have against him, in complete settlement, satisfaction and discharge of any
claims Mr. Brincat may have against the Company, subject to the approval of the
United States District Court for the Northern District of Illinois by a final
non-appealable order.

         Under the Plan, the reorganized company will have 50,000,000 shares of
Common Stock, par value $.01 per share, authorized, 10,000,000 shares of which
are to be issued and outstanding. No shares are reserved for future issuances in
respect of claims and interests filed and allowed under the Plan. Information
regarding the assets and liabilities of the Company as of the most recent
practicable date is incorporated herein by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1998.

         On March 10, 1999, Mercury issued a press release with respect to the
confirmation of the Plan. A copy of the press release is attached hereto as
Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

Item 7.           Financial Statements and Exhibits.

         (c)      Exhibits.

                  Exhibit No.       Description of Document

                  2(a)              Mercury Finance Company's Second Amended
                                    Plan of Reorganization, incorporated herein
                                    by reference to Exhibit 2 to the Company's
                                    Annual Report on Form 10-K for the year
                                    ended December 31, 1998.

                  3(i)              Amended and Restated Certificate of
                                    Incorporation of Mercury Finance Company,
                                    incorporated herein by reference to Exhibit
                                    1.1 to the Company's Form 8(a) filed on
                                    March 22, 1999.

                  3(ii)             By-laws of the Company, incorporated herein
                                    by reference to Exhibit 1.2 to the Company's
                                    Form 8(a) filed on March 22, 1999.

                  4(A)              Indenture dated as of March 23, 1999,
                                    between the Company and Norwest Bank
                                    Minnesota, National Association with respect
                                    to Senior Secured Notes.

                  4(B)              First Supplemental Trust Indenture dated as
                                    of March 23, 1999, between the Company and
                                    Norwest Bank Minnesota, National Association
                                    with respect to 10% Senior Secured Notes Due
                                    2001, Series A.

                  4(C)              Second Supplemental Trust Indenture dated as
                                    of March 23, 1999, between the Company and
                                    Norwest Bank Minnesota, National Association
                                    with respect to Senior Secured Notes Due
                                    2001, Series B.

                  4(D)              Company Security Agreement dated as of March
                                    23, 1999, between the Company and Norwest
                                    Bank Minnesota, National Association.

                  4(E)              Company Pledge Agreement dated as of March
                                    23, 1999, between the Company and Norwest
                                    Bank Minnesota, National Association.

                  4(F)              Subsidiaries Guaranty Agreement dated as of
                                    March 23, 1999, between each of the
                                    corporations listed on Annex I thereto and
                                    Norwest Bank Minnesota, National
                                    Association.

                  4(G)              Subsidiaries Security Agreement dated as of
                                    March 23, 1999, between each of the
                                    corporations listed on Annex I thereto and
                                    Norwest Bank Minnesota, National
                                    Association.

                  4(H)              Indenture dated as of March 23, 1999,
                                    between the Company and Norwest Bank
                                    Minnesota, National Association with respect
                                    to Senior Subordinated Notes.

                  4(I)              First Supplemental Indenture dated as of
                                    March 23, 1999, between the Company and
                                    Norwest Bank Minnesota, National Association
                                    with respect to 100% Senior Subordinated
                                    Notes due 2002.

                  4(J)              Warrant Agreement dated as of March 23,
                                    1999, between the Company and Harris Trust
                                    and Savings Bank, as warrant agent.

                  10                Registration Rights Agreement dated as of
                                    March 23, 1999, between the Company and the
                                    persons identified on Schedule 1 thereto.

                  99.1              Press release dated March 10, 1999 issued by
                                    Mercury.



<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                 MFN Financial Corporation

Date:  March 25, 1999            By:  /s/ Mark E. Dapier
                                    --------------------
                                 Its: Executive Vice President, General Counsel
                                 and Secretary


                                                                    Exhibit 4(A)





                            MFN Financial Corporation

                                       and


                  Norwest Bank Minnesota, National Association,


                                     Trustee


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


                                    INDENTURE


                           Dated as of March 23, 1999


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


                              SENIOR SECURED NOTES





<PAGE>


                              SENIOR SECURED NOTES
                             CROSS REFERENCE SHEET*

                This Cross Reference Sheet shows the location in
              the Indenture of the provisions inserted pursuant to
                             Sections 310 - 318(a),
           inclusive, of the Trust Indenture Act of 1939, as amended.

Trust Indenture Act                                      Sections of Indenture

Section 310(a)(1)  .........................................     11.08
      (a)(2)       .........................................     11.08
      (a)(3)       .........................................     Inapplicable
      (a)(4)       .........................................     Inapplicable
      (a)(5)       .........................................     11.08
        (b)        .........................................     11.07
        (c)        .........................................     Inapplicable
Section 311(a)     .........................................     11.12
        (b)        .........................................     11.12
        (c)        .........................................     Inapplicable
Section 312(a)     .........................................     8.01, 8.02
        (b)        .........................................     8.02
        (c)        .........................................     8.02
Section 313(a)     .........................................     8.03
        (b)        .........................................     8.03
        (c)        .........................................     8.03
        (d)        .........................................     8.03
Section 314(a)     .........................................     8.04
      (a)(4)       .........................................     7.07
        (b)        .........................................     5.02
      (c)(1)       .........................................     15.05
      (c)(2)       .........................................     15.05
      (c)(3)       .........................................     Inapplicable
        (d)        .........................................     5.03
        (e)        .........................................     15.05
        (f)        .........................................     Inapplicable
Section 315(a)     .........................................     11.01
        (b)        .........................................     9.08
        (c)        .........................................     11.01
        (d)        .........................................     11.01, 11.02
        (e)        .........................................     9.07
Section 316(a)(1)(A)........................................     9.01, 9.06
      (a)(1)(B)    .........................................     9.01
      (a)(2)       .........................................     Inapplicable
        (b)        .........................................     9.04, 9.09
        (c)        .........................................     15.11
Section 317(a)(1)  .........................................     9.02
      (a)(2)       .........................................     9.11
        (b)        .........................................     7.03
Section 318(a)     .........................................     15.08

- ----------
* The Cross Reference Sheet is not part of the Indenture.


<PAGE>


                               Table of Contents*

                                                                            Page
Recitals 1
ARTICLE I.  Definitions........................................................1
 Section 1.01. Certain Terms Defined...........................................1
  Act      1
  Affiliate....................................................................2
  Authenticating Agent.........................................................2
  Board of Directors...........................................................2
  Board Resolution.............................................................2
  Business Day.................................................................2
  Capital Lease................................................................2
  Capital Lease Obligations....................................................3
  Collateral Security Documents................................................3
  Commission...................................................................3
  Common Stock.................................................................3
  Company  3
  Company Request or Company Order.............................................3
  Corporate Trust Office.......................................................4
  Covenant Defeasance..........................................................4
  Default  4
  Defaulted Interest...........................................................4
  Defeasance...................................................................4
  Defeasible Series............................................................4
  Depositary...................................................................4
  Event of Default.............................................................5
  Exchange Act.................................................................5
  GAAP     5
  Global Security..............................................................5
  Holder   5
  Indebtedness.................................................................5
  Indenture....................................................................6
  Interest 6
  Interest Payment Date........................................................6
  Material Adverse Effect......................................................7
  Maturity 7
  Notice of Default............................................................7
  Officer's Certificate........................................................7
  Opinion of Counsel...........................................................7
  Original Issue Discount Security.............................................7
  Outstanding..................................................................7
  Paying Agent.................................................................8
  Person   8
  Place of Payment.............................................................8
  Predecessor Security.........................................................9
  Redemption Date..............................................................9
  Redemption Price.............................................................9
  Regular Record Date..........................................................9
  Responsible Officer..........................................................9
  Securities..................................................................10
  Security Register and Security Registrar....................................10
  Special Record Date.........................................................10
  Stated Maturity.............................................................10
  Subsidiaries Collateral.....................................................10
  Subsidiaries Guaranty Agreement.............................................10
  Subsidiaries Security Agreement.............................................11
  Subsidiary..................................................................11
  Trust Indenture Act.........................................................11
  Trustee.....................................................................11
  U.S. Government Obligation..................................................11
  Vice President..............................................................12
  Working Capital Facility....................................................12
ARTICLE II.  THE SECURITIES...................................................12
 Section 2.01. Designation and Amount of Securities...........................12
 Section 2.02. Form of Securities and Trustee's Certificate of Authentication.14
 Section 2.03. Date and Denominations.........................................15
 Section 2.04. Execution, Authentication, and Delivery of Securities..........16
 Section 2.05. Registration of Transfer and Exchange..........................17
 Section 2.06. Temporary Securities...........................................18
 Section 2.07. Mutilated, Destroyed, Lost, and Stolen Securities..............19
 Section 2.08. Cancellation of Surrendered Securities.........................20
 Section 2.09. Payment of Interest; Interest Rights Preserved.................20
 Section 2.10. Persons Deemed Owners..........................................22
 Section 2.11. Computation of Interest........................................22
 Section 2.12. CUSIP Numbers..................................................22
ARTICLE III.  REDEMPTION OF SECURITIES........................................22
 Section 3.01. Applicability of Article.......................................22
 Section 3.02. Election to Redeem; Notice to Trustee..........................22
 Section 3.03. Deposit of Redemption Price....................................23
 Section 3.04. Securities Payable on Redemption Date..........................24
 Section 3.05. Securities Redeemed in Part....................................24
ARTICLE IV.  SINKING FUNDS....................................................24
 Section 4.01. Applicability of Article.......................................24
 Section 4.02. Satisfaction of Sinking Fund Payments With Securities..........25
 Section 4.03. Redemption of Securities for Sinking Fund......................25
ARTICLE V.  SECURITY..........................................................25
 Section 5.01. Security Interest..............................................25
 Section 5.02. Recording of Security Interests; Opinions of Counsel...........26
 Section 5.03. Release of Collateral..........................................27
 Section 5.04. Release upon Defeasance or Release of Company's Obligations....28
 Section 5.05. Reliance on Opinion of Counsel.................................28
 Section 5.06. Payment of Expenses............................................28
 Section 5.07. Trustee's Duties...............................................28
ARTICLE VI.  DEFEASANCE AND COVENANT DEFEASANCE...............................29
 Section 6.01. Company's Option to Effect Defeasance or Covenant Defeasance...29
 Section 6.02. Defeasance and Discharge.......................................29
 Section 6.03. Covenant Defeasance............................................30
 Section 6.04. Conditions to Defeasance or Covenant Defeasance................30
 Section 6.05. Deposited Money and U.S. Government Obligations to be Held in
          Trust; Other Miscellaneous Provisions...............................32
 Section 6.06. Reinstatement..................................................33
ARTICLE VII.  PARTICULAR COVENANTS OF THE COMPANY.............................33
 Section 7.01. Payment of Principal, Premium, and Interest on Securities......33
 Section 7.02. Maintenance of Office or Agency................................34
 Section 7.03. Money for Securities Payments to be Held in Trust..............34
 Section 7.04. Payment of Taxes and Other Claims..............................35
 Section 7.05. Existence......................................................35
 Section 7.06. Compliance with Laws...........................................36
 Section 7.07. Statement by Officers as to Default............................36
 Section 7.08. Waiver of Certain Covenants....................................36
 Section 7.09. Calculation of Original Issue Discount.........................36
ARTICLE VIII.  SECURITIES HOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE
  TRUSTEE.....................................................................37
 Section 8.01. Company to Furnish Trustee Names and Addresses of Holders......37
 Section 8.02. Preservation of Information; Communication to Holders..........37
 Section 8.03. Reports by Trustee.............................................37
 Section 8.04. Reports by Company.............................................38
ARTICLE IX.  DEFAULT..........................................................38
 Section 9.01. Event of Default...............................................38
 Section 9.02. Covenant of Company to Pay to Trustee Whole Amount Due on
          Securities on Default in Payment of Interest or Principal; Suits for 
          Enforcement by Trustee..............................................41
 Section 9.03. Application of Money Collected by Trustee......................43
 Section 9.04. Limitation on Suits by Holders of Securities...................43
 Section 9.05. Rights and Remedies Cumulative; Delay or Omission in Exercise
          of Rights not a Waiver of Event of Default..........................44
 Section 9.06. Rights of Holders of Majority in Principal Amount of
          Outstanding Securities to Direct Trustee............................44
 Section 9.07. Requirement of an Undertaking to Pay Costs in Certain Suits
          Under the Indenture or Against the Trustee..........................44
 Section 9.08. Notice of Defaults.............................................45
 Section 9.09. Unconditional Right of Holders to Receive Principal, Premium,
          and Interest........................................................45
 Section 9.10. Restoration of Rights and Remedies.............................45
 Section 9.11. Trustee May File Proofs of Claims..............................45
ARTICLE X  SUBORDINATION OF SECURITIES........................................47
 Section 10.01 Securities Subordinate to Working Capital Facility
          Indebtedness........................................................47
 Section 10.02 Payment Over of Proceeds Upon Dissolution, etc.................47
 Section 10.03 Payment Permitted..............................................47
 Section 10.03 Payment Permitted..............................................48
 Section 10.05 Provisions Solely to Define Relative Rights....................48
 Section 10.05 Provisions Solely to Define Relative Rights....................49
ARTICLE XI.  CONCERNING THE TRUSTEE...........................................49
 Section 11.01. Certain Duties and Responsibilities...........................49
 Section 11.02. Certain Rights of Trustee.....................................49
 Section 11.03. Not Responsible for Recitals or Issuance of Securities........50
 Section 11.04. May Hold Securities...........................................51
 Section 11.05. Money Held in Trust...........................................51
 Section 11.06. Compensation and Reimbursement................................51
 Section 11.07. Disqualification; Conflicting Interests.......................52
 Section 11.08. Corporate Trustee Required Eligibility........................52
 Section 11.09. Resignation and Removal; Appointment of Successor.............52
 Section 11.10. Acceptance of Appointment by Successor........................54
 Section 11.11. Merger, Conversion, Consolidation, or Succession to Business..55
 Section 11.12. Preferential Collection of Claims Against Company.............55
 Section 11.13. Appointment of Authenticating Agent...........................55
ARTICLE XII.  SUPPLEMENTAL INDENTURES AND CERTAIN ACTIONS.....................57
 Section 12.01. Purposes for Which Supplemental Indentures May Be Entered
           Into Without Consent of Holders....................................57
 Section 12.02. Modification of Indenture With Consent of Holders of at
           Least a Majority in Principal Amount of Outstanding Securities.....58
 Section 12.03. Execution of Supplemental Indentures..........................59
 Section 12.04. Effect of Supplemental Indentures.............................59
 Section 12.05. Conformity with Trust Indenture Act...........................60
 Section 12.06. Reference in Securities to Supplemental Indentures............60
ARTICLE XIII.  CONSOLIDATION, MERGER, SALE, OR TRANSFER.......................60
 Section 13.01. Consolidations and Mergers of Company and Sales Permitted
           Only on Certain Terms..............................................60
ARTICLE XIV.  SATISFACTION AND DISCHARGE OF INDENTURE.........................60
 Section 14.01. Satisfaction and Discharge of Indenture.......................61
 Section 14.02. Application of Trust Money....................................61
ARTICLE XV.  MISCELLANEOUS PROVISIONS.........................................61
 Section 15.01. Successors and Assigns of Company Bound by Indenture..........61
 Section 15.02. Service of Required Notice to Trustee and Company.............62
 Section 15.03. Service of Required Notice to Holders; Waiver.................62
 Section 15.04. Indenture and Securities to be Construed in Accordance with
           the Laws of the State of New York..................................62
 Section 15.05. Compliance Certificates and Opinions..........................63
 Section 15.06. Form of Documents Delivered to Trustee........................63
 Section 15.07. Payments Due on Non-Business Days.............................63
 Section 15.08. Provisions Required by Trust Indenture Act to Control.........63
 Section 15.09. Invalidity of Particular Provisions...........................64
 Section 15.10. Indenture May be Executed In Counterparts.....................64
 Section 15.11. Acts of Holders; Record Dates.................................64
 Section 15.12. Effect of Headings and Table of Contents......................66
 Section 15.13. Benefits of Indenture.........................................66



<PAGE>

                  This INDENTURE, dated as of March 23, 1999, between MFN
Financial Corporation, a corporation duly organized and existing under the laws
of the State of Delaware (the "Company"), and Norwest Bank Minnesota, National
Association, a U.S. national banking association, as Trustee (the "Trustee").

                                    RECITALS

                  A. The Company has duly authorized the execution and delivery
of this Indenture to provide for the issuance from time to time of its senior
secured notes (the "Securities"), to be issued in one or more series as in this
Indenture provided.

                  B. All acts and things necessary to make the Securities, when
the Securities have been executed by the Company and authenticated by the
Trustee and delivered as provided in this Indenture, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
indenture and agreement according to its terms, have been done and performed,
and the execution and delivery by the Company of this Indenture and the issue
hereunder of the Securities have in all respects been duly authorized; and the
Company, in the exercise of legal right and power in it vested, is executing and
delivering this Indenture and proposes to make, execute, issue and deliver the
Securities.

                  NOW, THEREFORE, THIS INDENTURE WITNESSETH:

                  In order to declare the terms and conditions upon which the
Securities are authenticated, issued and delivered, and in consideration of the
premises and of the purchase and acceptance of the Securities by the Holders
thereof, it is mutually agreed, for the equal and proportionate benefit of the
respective Holders from time to time of the Securities or of a series thereof,
as follows:

                             ARTICLE I. DEFINITIONS

SECTION 1.01.       CERTAIN TERMS DEFINED

                  (a) The terms defined in this Section 1.01 for all purposes of
this Indenture and of any indenture supplemental hereto (except as herein or
therein otherwise expressly provided or unless the context of this Indenture or
any indenture supplemental hereto otherwise requires) have the respective
meanings specified in this Section 1.01. All other terms used in this Indenture
that are defined in the Trust Indenture Act, either directly or by reference
therein (except as herein otherwise expressly provided or unless the context of
this Indenture otherwise requires), have the respective meanings assigned to
such terms in the Trust Indenture Act as in force at the date of original
execution of this Indenture.

Act:

                  The term "Act," when used with respect to any Holder, has the
meaning set forth in Section 15.11.

Affiliate:

                  The term "Affiliate" means, with respect to a particular
Person, any Person that, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, control of a Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative of the foregoing.

Authenticating Agent:

                  The term "Authenticating Agent" means any Person authorized by
the Trustee pursuant to Section 11.13 to act on behalf of the Trustee to
authenticate Securities of one or more series.

Board of Directors:

                  The term "Board of Directors" means the Board of Directors of
the Company or any duly authorized committee of such Board.

Board Resolution:

                  The term "Board Resolution" means a copy of a resolution
delivered to the Trustee and 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.

Business Day:

                  The term "Business Day," when used with respect to any Place
of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are authorized
or required by law or executive order to close.

Capital Lease:

                  The term "Capital Lease" means, with respect to any Person,
any lease of property (whether real, personal, or mixed) by such Person or any
of its Subsidiaries as lessee that would be capitalized on a balance sheet of
such Person or any of its Subsidiaries prepared in conformity with GAAP, other
than, in the case of such Person or any of its Subsidiaries, any such lease
under which such Person or any of its Subsidiaries is the lessor.

Capital Lease Obligations:

                  The term "Capital Lease Obligations" means, with respect to
any Person, the capitalized amount of all obligations of such Person and its
Subsidiaries under Capital Leases, as determined on a consolidated basis in
conformity with GAAP.

Collateral Security Documents:

          The term "Collateral Security Documents" has the meaning set forth in
Section 5.01(a).

Commission:

                  The term "Commission" means the Securities and Exchange
Commission, as from time to time constituted, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

Common Stock:

                  The term "Common Stock" means the common stock of the Company.

Company:

                  The term "Company" means MFN Financial Corporation, a Delaware
corporation, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" will mean such
successor Person.

Company Collateral:

         The term "Company Collateral" means, collectively, (i) "Collateral" as
such term is defined in the Company Pledge Agreement and (ii) "Collateral" as
such term is defined in the Company Security Agreement.

Company Pledge Agreement:

                  The term "Company Pledge Agreement" means the Company Pledge
Agreement dated as of March 23, 1999 between the Company and the Trustee, as
supplemented and amended from time to time in accordance with the terms thereof.

Company Request or Company Order:

                  The term "Company Request" or "Company Order" means a written
request or order signed in the name of the Company by one of its Responsible
Officers and delivered to the Trustee.

Company Security Agreement:

                  The term "Company Security Agreement" means the Company
Security Agreement dated as of March 23, 1999 between the Company and the
Trustee, as supplemented and amended from time to time in accordance with the
terms thereof.

Company Security Documents:

                  The term "Company Security Documents" means the Company Pledge
Agreement and the Company Security Agreement.

Corporate Trust Office:

                  The term "Corporate Trust Office" means the office of the
Trustee at which at any particular time its corporate trust business is
principally administered, which on the date hereof is Sixth Street and Marquette
Avenue, Minneapolis, Minnesota 55479.

Covenant Defeasance:

                  The term "Covenant Defeasance" has the meaning set forth in
Section 6.03.

Default:

                  The term "Default" means any event which, with notice or
passage of time or both, would constitute an Event of Default.

Defaulted Interest:

                  The term "Defaulted Interest" has the meaning set forth in
Section 2.09.

Defeasance:

                  The term "Defeasance" has the meaning set forth in Section
6.02.

Defeasible Series:

                  The term "Defeasible Series" has the meaning set forth in
Section 6.01.

Depositary:

                  The term "Depositary" means, with respect to Securities of any
series issuable in whole or in part in the form of one or more Global
Securities, a clearing agency registered under the Exchange Act that is
designated to act as Depositary for such Securities in accordance with Section
2.01.

Event of Default:

                  The term "Event of Default" has the meaning set forth in
Section 9.01(a).

Exchange Act:

                  The term "Exchange Act" means the Securities Exchange Act of
1934, as amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, as the same may be in effect from time to time.

Finance Business

                  The term "Finance Business" means the business of acquiring
and/or making loans (a majority of which shall be secured) and/or servicing
Receivables and the transaction of such other business as may be reasonably
incidental thereto including, without limitation, the leasing business and the
direct lending business including the sale of insurance as agent or broker.

GAAP:

                  The term "GAAP" means generally accepted accounting principles
in the United States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and The American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, or in such other statements by any
successor entity as may be in general use by significant segments of the
accounting profession, which are applicable to the circumstances as of the date
of determination.

Global Security:

                  The term "Global Security" means a Security that evidences all
or part of the Securities of any series and is authenticated and delivered to,
and registered in the name of, the Depositary for such Securities or a nominee
thereof.

Holder:

                  The term "Holder" means a person in whose name a particular
Security is registered in the Security Register.

Indebtedness:

                  The term "Indebtedness" means, as applied to any Person,
without duplication, (a) indebtedness for borrowed money, all indebtedness
evidenced by notes, bonds, debentures or other evidences of indebtedness, and
all indebtedness under purchase money mortgages or other purchase money liens or
conditional sales or similar title retention agreements, in each case where such
indebtedness has been created, incurred, assumed or guaranteed by such Person or
where such Person is otherwise liable therefor, and (b) indebtedness for
borrowed money secured by any mortgage, pledge or other lien or encumbrance upon
property owned by such Person even though such Person has not assumed or become
liable for the payment of such indebtedness; provided, however, that
indebtedness of the type referred to in clause (b) above shall be included
within the definition of "Indebtedness" only to the extent of the lesser of: (i)
the amount of the underlying indebtedness referred to in the clause (b) above
and (ii) the aggregate value of the security for such indebtedness.

Indenture:

                  The term "Indenture" means this Indenture, as this Indenture
may be amended, supplemented or otherwise modified from time to time, including,
for all purposes of this Indenture and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" will also include the terms of particular series of Securities
established in accordance with Section 2.01.

Indenture Obligations:

                  The term "Indenture Obligations" means the obligations of the
Company to pay principal of, premium, if any, and interest on, and other amounts
payable in respect of, the Securities at the Stated Maturity of each such
payment, and (to the extent permitted by applicable law) as provided in the
Securities, interest on overdue principal, if any, of, overdue interest, if any,
on, and other overdue amounts, if any, payable with respect to, the Securities
and the performance of all other obligations of the Company and its Subsidiaries
(except MFN Insurance Company) to the Trustee and the Holders (with respect to
the Securities) under this Indenture, the Securities and the Company Security
Documents, according to the terms thereunder, and all other amounts due or to
become due under this Indenture, the Company Security Documents and the
Subsidiaries Security Agreement.

Interest:

                  The term "interest," (i) when used with respect to an Original
Issue Discount Security, which by its terms bears interest only after Maturity,
means interest which accrues from and after and is payable after Maturity and
(ii) when used with respect to any Security, means the amount of all interest
accruing on such Security, including any default interest and any interest that
would have accrued after any Event of Default but for the occurrence of such
Event of Default, whether or not a claim for such interest would be otherwise
allowable under applicable law.

Interest Payment Date:

                  The term "Interest Payment Date," when used with respect to
any Security, means the Stated Maturity of an installment of interest on such
Security.

Material Adverse Effect:

                  The term "Material Adverse Effect" means a material adverse
effect on the business, assets, financial condition or results of operations of
the Company (taken together with its Subsidiaries as a whole).

Maturity:

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

Notice of Default:

                  The term "Notice of Default" means a written notice of the
kind set forth in Section 9.01(a)(iv).

Officer's Certificate:

                  The term "Officer's Certificate" means a certificate executed
on behalf of the Company by a Responsible Officer and delivered to the Trustee.

Opinion of Counsel:

                  The term "Opinion of Counsel" means an opinion in writing
signed by legal counsel, who, subject to any express provisions hereof, may be
an employee of or counsel to the Company or any Subsidiary, reasonably
acceptable to the Trustee.

Original Issue Discount Security:

                  The term "Original Issue Discount Security" means any Security
which provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 9.01(b).

Outstanding:

                  The term "Outstanding" means, when used with reference to
Securities as of a particular time, all Securities theretofore issued by the
Company and authenticated and delivered by the Trustee under this Indenture,
except (a) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation, (b) Securities in respect of which (i) notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made, and (ii) money in the amount required
for the redemption thereof has been deposited with the Trustee or any Paying
Agent (other than the Company) in trust for the Holders of such Securities, (c)
Securities paid pursuant to Section 2.07(c), and (d) Securities in exchange for
or in lieu of which other Securities have been authenticated and delivered
pursuant to this Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof satisfactory to it that
such Securities are held by a bona fide purchaser in whose hands such Securities
are valid obligations of the Company; provided, however, that in determining
whether the Holders of the requisite principal amount of the Outstanding
Securities have given any request, demand, authorization, direction, notice,
consent, or waiver hereunder, (x) the principal amount of an Original Issue
Discount Security that will be deemed to be Outstanding will be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon acceleration of the Maturity thereof to such date pursuant to
Section 9.01(b), (y) the principal amount of a Security denominated in one or
more foreign currencies or currency units will be the U.S. dollar equivalent,
determined in the manner contemplated by Section 2.01 on the date of original
issuance of such Security, of the principal amount (or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent on the date of
original issuance of such Security of the amount determined as provided in
clause (i) above) of such Security, and (z) Securities owned by the Company or
any other obligor upon the Securities or any Affiliate of the Company or of such
other obligor will be disregarded and deemed not to be Outstanding, except that,
in determining whether the Trustee will be protected in relying upon any such
request, demand, authorization, direction, notice, consent, or waiver, only
Securities which a Responsible Officer of the Trustee actually knows to be so
owned will be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.

Paying Agent:

                  The term "Paying Agent" means any Person authorized by the
Company to pay the principal of or any premium or interest on any Securities on
behalf of the Company.

Person:
                  The term "Person" means any individual, partnership,
corporation, limited liability company, limited liability partnership, joint
stock company, business trust, trust, unincorporated association, joint venture,
or other entity, or a governmental or political subdivision or agency thereof.

Place of Payment:

                  The term "Place of Payment," when used with respect to the
Securities of any series, means the place or places for the payment of the
principal of and any premium and interest on the Securities of that series
established in accordance with Section 2.01.

Predecessor Security:

                  The term "Predecessor Security," when used with respect to any
particular Security, means every previous Security evidencing all or a portion
of the same debt as that evidenced by such Security; and, for the purposes of
this definition, any Security authenticated and delivered under Section 2.07 in
exchange for or in lieu of a mutilated, destroyed, lost, or stolen Security will
be deemed to evidence the same debt as the mutilated, destroyed, lost, or stolen
Security.

Receivables:

                  The term "Receivables" means (i) consumer installment sale
contracts and loans evidenced by promissory notes secured by new and used
automobiles and light trucks, (ii) other consumer installment sale contracts or
lease contracts and (iii) loans secured by residential mortgages, in the case of
each of the clauses (i), (ii) and (iii), that are purchased or originated in the
ordinary course of business by the Company or any Subsidiary of the Company.

Redemption Date:

                  The term "Redemption Date," when used with respect to any
Security to be redeemed, means the date fixed for such redemption by or pursuant
to this Indenture.

Redemption Price:

                  The term "Redemption Price," when used with respect to any
Security to be redeemed, means the price (including premium, if any) at which it
is to be redeemed pursuant to this Indenture.

Regular Record Date:

                  The term "Regular Record Date" for the interest payable on any
Interest Payment Date on the Securities of any series means the date established
for that purpose in accordance with Section 2.01.

Responsible Officer:

                  The term "Responsible Officer," when used (a) with respect to
the Company, means the Chief Executive Officer, the President, the Chief
Financial Officer, the Treasurer or the Secretary of the Company and (b) with
respect to the Trustee, means any Vice President, any Assistant Vice President,
any Assistant Secretary, any Assistant Treasurer, any trust officer or assistant
trust officer, or any other officer or assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time are such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with the
particular subject.

Securities:

                  The term "Securities" has the meaning set forth in the first
recital of this Indenture and more particularly means any Securities
authenticated and delivered under this Indenture.

Security Interest:

                  The term "Security Interest" means the security interest in
the Company Collateral and the Subsidiaries Collateral, including the priority
thereof, created by the Collateral Security Documents in favor of the Trustee
for the benefit of the Holders of the Securities issued hereunder.

Security Register and Security Registrar:

                  The terms "Security Register" and "Security Registrar" have
the respective meanings set forth in Section 2.05.

Special Record Date:

                  The term "Special Record Date" for the payment of any
Defaulted Interest means a date fixed by the Trustee pursuant to Section 2.09.

Stated Maturity:

                  The term "Stated Maturity," when used with respect to any
Security, any installment of interest thereon, or any other amount payable under
this Indenture or the Securities, means the date specified in this Indenture or
such Security as the regularly scheduled date on which the principal of such
Security, such installment of interest, or such other amount, is due and
payable.

Subsidiaries Collateral:

                  The term "Subsidiaries Collateral" has the meaning assigned to
the term "Collateral" in the Subsidiaries Security Agreement.

Subsidiaries Guaranty Agreement:

                  The term "Subsidiaries Guaranty Agreement" means the
Subsidiaries Guaranty Agreement dated as of March 23, 1999 made by each
Subsidiary (except MFN Insurance Company) of the Company in favor of the Trustee
for the benefit of the Holders as it may be supplemented and amended from time
to time in accordance with the terms thereof.

Subsidiaries Security Agreement:

                  The term "Subsidiaries Security Agreement" means the
Subsidiaries Security Agreement dated as of March 23, 1999 between each
Subsidiary (except MFN Insurance Company) and the Trustee.

Subsidiary:

                  The term "Subsidiary" means, as applied with respect to any
Person, any corporation, partnership, or other business entity of which, in the
case of a corporation, more than 50% of the issued and outstanding capital stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation has or might have voting power upon the
occurrence of any contingency), or, in the case of any partnership or other
legal entity, more than 50% of the ordinary equity capital interests, is at the
time directly or indirectly owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries, or by one or more of such Person's
other Subsidiaries. Unless the context of this Indenture or any indenture
supplemental hereto otherwise expressly requires, the term "Subsidiary" shall
refer to a Subsidiary of the Company.

Trust Indenture Act:

                  The term "Trust Indenture Act" means the Trust Indenture Act
of 1939, as amended, as in force at the date as of which this instrument was
executed, together with all the rules and regulations of the Commission
promulgated pursuant thereto; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means,
to the extent required by any such amendment, the Trust Indenture Act of 1939,
as so amended.

Trustee:

                  The term "Trustee" means the Person named as the "Trustee" in
the first paragraph of this Indenture until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture and,
thereafter, "Trustee" will mean or include each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, "Trustee" as
used with respect to the Securities of any series will mean each Trustee with
respect to Securities of that series.

U.S. Government Obligation:

                  The term "U.S. Government Obligation" means (a) any security
that is (i) a direct obligation of the United States of America for the payment
of which the full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of which
is unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof and (b) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933,
as amended) as custodian with respect to any U.S. Government Obligation
specified in clause (a), which U.S. Government Obligation is held by such
custodian for the account of the holder of such depositary receipt, or with
respect to any specific payment of principal of or interest on any such U.S.
Government Obligation, provided that (except as required by law) such custodian
is not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of principal or interest
evidenced by such depositary receipt.

Vice President:

                  The term "Vice President," when used with respect to the
Company or the Trustee, means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president."

Working Capital Facility:

                  The term "Working Capital Facility" means one or more funding
arrangements in an aggregate principal amount not to exceed at any one time $40
million with a financial institution or other lender or purchaser to finance or
refinance the purchase or origination of Receivables by the Company or any
Subsidiary or to otherwise provide funding for the general working capital needs
of the Company and its Subsidiaries in each case in the ordinary course of the
Finance Business.

                  (b) The words "Article" and "Section" refer to an Article and
Section, respectively, of this Indenture. 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. Certain terms
used principally in Articles VI, VII, and X are defined in those Articles. Terms
in the singular include the plural and terms in the plural include the singular.

                           ARTICLE II. THE SECURITIES

SECTION 2.01.       DESIGNATION AND AMOUNT OF SECURITIES

                  (a) The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited.

                  (b) The Securities may be issued in one or more series. There
will be established in or pursuant to a Board Resolution and, subject to Section
2.04, set forth or determined in the manner provided in an Officer's
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series: (i) the title of the Securities of
the series (which will distinguish the Securities of the series from Securities
of any other series); (ii) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in the exchange for, or in lieu of, other Securities of the
series pursuant to Section 2.05, 2.06, 2.07, 3.05, or 12.06 and except for any
Securities which, pursuant to Section 2.04, are deemed never to have been
authenticated and delivered hereunder); (iii) the Person to whom any interest on
a Security of the series will be payable, if other than the Person in whose name
that Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest; (iv) the date or dates
on which the principal of the Securities of the series is payable; (v) the rate
or rates at which the Securities of the series will bear interest, if any, the
date or dates from which such interest will accrue, the Interest Payment Dates
on which any such interest will be payable, and the Regular Record Date for any
interest payable on any Interest Payment Date; (vi) the place or places where
the principal of and any premium and interest on Securities of the series will
be payable; (vii) the period or periods within which, the price or prices at
which, and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company; (viii) the
obligation, if any, of the Company to redeem or purchase Securities of the
series pursuant to any sinking fund or analogous provisions or at the option of
a Holder thereof and the period or periods within which, the price or prices at
which, and the terms and conditions upon which Securities of the series will be
redeemed or purchased, in whole or in part, pursuant to such obligation; (ix) if
other than denominations of $1,000 and integral multiples thereof, the
denominations in which Securities of the series will be issuable; (x) the
currency, currencies, or currency units in which payment of the principal of and
any premium and interest on any Securities of the series will be payable if
other than the currency of the United States of America and the manner of
determining the equivalent thereof in the currency of the United States of
America for purposes of the definition of "Outstanding" in Section 1.01; (xi) if
the amount of payments of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index, based
upon a formula, or in some other manner, the manner in which such amounts will
be determined; (xii) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the Company or a
Holder thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency,
currencies, or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which such election is
made will be payable, and the periods within which and the terms and conditions
upon which such election is to be made; (xiii) if other than the principal
amount thereof, the portion of the principal amount of Securities of the series
which will be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 9.01(b); (xiv) if applicable, that the Securities of the
series will be subject to either or both of Defeasance or Covenant Defeasance as
provided in Article VI, provided that no series of Securities that is
convertible into Common Stock pursuant to Section 2.01(b)(xvi) or convertible
into or exchangeable for any other securities pursuant to Section 2.01(b)(xvii)
will be subject to Defeasance pursuant to Section 6.02; (xv) if and as
applicable, that the Securities of the series will be issuable in whole or in
part in the form of one or more Global Securities and, in such case, the
Depositary or Depositaries for such Global Security or Global Securities and any
circumstances other than those set forth in Section 2.05 in which any such
Global Security may be transferred to, and registered and exchanged for
Securities registered in the name of, a Person other than the Depositary for
such Global Security or a nominee thereof and in which any such transfer may be
registered; (xvi) the terms and conditions, if any, pursuant to which the
Securities are convertible into Common Stock; (xvii) the terms and conditions,
if any, pursuant to which the Securities are convertible into or exchangeable
for any other securities, including (without limitation) securities of Persons
other than the Company; (xviii) if and as applicable, that the Securities of the
series will be subordinate and subject in right of payment to the prior payment
of other Indebtedness; and (xix) any other terms of, or provisions, covenants,
rights or other matters applicable to, the series (which terms, provisions,
covenants, rights or other matters will not be inconsistent with the provisions
of this Indenture, except as permitted by Section 12.01(d)).

                  (c) All Securities of any one series will be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to below and (subject to Section
2.04) set forth or determined in the manner provided in the Officer's
Certificate referred to above or in any such indenture supplemental hereto.

                  (d) If any of the terms of the series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action will be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee concurrently with or prior to the delivery
of the Officer's Certificate setting forth the terms of the series.

SECTION 2.02.     FORM OF SECURITIES AND TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  (a) The Securities of each series will be in such form as may
be established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, and may have such letters, numbers, or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If the form of Securities of
any series is established by action taken pursuant to a Board Resolution, a copy
of an appropriate record of such action will be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee concurrently
with or prior to the delivery of the Company Order contemplated by Section 2.04
for the authentication and delivery of such Securities.

                  (b) The definitive Securities will be printed, lithographed,
or engraved on steel engraved borders or may be produced in any other manner
permitted by the rules of any securities exchange on which the Securities may be
listed, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.

                  (c) The Trustee's certificate of authentication will be in
substantially the following form:

        [Form of Trustee's Certificate of Authentication for Securities]

                     Trustee's Certificate of Authentication

                  This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

             ---------------------------------,
                                    as Trustee

                                       By:
                                              Authorized Signatory

                  (d) Every Global Security authenticated and delivered
hereunder will bear a legend in substantially the following form:

                     [Form of Legend for Global Securities]

                  This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than the
Depositary or a nominee thereof, and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, this Security will be a Global Security subject to the
foregoing, except in such limited circumstances.

SECTION 2.03.       DATE AND DENOMINATIONS

                  Each Security will be dated the date of its authentication.
The Securities of each series will be issuable only in registered form without
coupons in such denominations as may be specified in accordance with Section
2.01. In the absence of any such specified denomination with respect to the
Securities of any series, the Securities of such series will be issuable in
denominations of $1,000 and integral multiples thereof.

SECTION 2.04.       EXECUTION, AUTHENTICATION, AND DELIVERY OF SECURITIES

                  (a) The Securities will be executed on behalf of the Company
by the Chief Executive Officer or the President of the Company and attested by
the Treasurer or the Secretary of the Company under its corporate seal. The
signature of any of these officers on the Securities may be manual or facsimile.
The seal of the Company may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted, or otherwise reproduced on the Securities.

                  (b) Only such Securities bearing the Trustee's certificate of
authentication, signed manually by the Trustee, will be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. Such execution of
the certificate of authentication by the Trustee upon any Securities executed by
the Company will be conclusive evidence that the Securities so authenticated
have been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 2.08, for all
purposes of this Indenture such Security will be deemed never to have been
authenticated and delivered hereunder and will never be entitled to the benefits
of this Indenture.

                  (c) Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company will bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.

                  (d) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order will authenticate and make such
Securities available for delivery. If the form or terms of the Securities of the
series have been established in or pursuant to one or more Board Resolutions as
permitted by Sections 2.01 and 2.02, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee will be entitled to receive, and (subject to
Section 11.01) will be fully protected in relying upon, an Opinion of Counsel
stating (i) if the form of such Securities has been established by or pursuant
to a Board Resolution as permitted by Section 2.02, that such form has been
established in conformity with the provisions of this Indenture, (ii) if the
terms of such Securities have been established by or pursuant to a Board
Resolution as permitted by Section 2.01, that such terms have been established
in conformity with the provisions of this Indenture, and (iii) that such
Securities, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and binding obligations of the Company
enforceable in accordance with their terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium, or other
laws of general applicability relating to or affecting creditors' rights and by
general principles of equity.

                  (e) Notwithstanding the provisions of Sections 2.01 and
2.04(d), if all Securities of a series are not to be originally issued at one
time, it will not be necessary to deliver the Officer's Certificate otherwise
required pursuant to Section 2.01 or the Company Order and Opinion of Counsel
otherwise required pursuant to Section 2.04(d) at or prior to the time of
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.

SECTION 2.05.       REGISTRATION OF TRANSFER AND EXCHANGE

                  (a) The Company will cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company will provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

                  (b) Upon surrender for registration of transfer of any
Security of any series at the office or agency in a Place of Payment for that
series, the Company will execute, and the Trustee will authenticate and make
available for delivery, in the name of the designated transferee or transferees,
one or more new Securities of the same series, of any authorized denominations
and of a like aggregate principal amount and tenor.

                  (c) At the option of the Holder, Securities of any series may
be exchanged for other Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company will execute, and the
Trustee will authenticate and make available for delivery, the Securities which
the Holder making the exchange is entitled to receive.

                  (d) Every Security presented or surrendered for registration
of transfer or exchange will (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument or instruments of
transfer, in form reasonably satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing. No service charge will be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 2.06, 3.05, or 12.06 not involving any transfer.
The Company will not be required (i) to issue, register the transfer of, or
exchange Securities of any series during a period beginning at the opening of
business 15 calendar days before the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 3.02(c) and
ending at the close of business on the day of such mailing or (ii) to register
the transfer of or exchange any Security so selected for redemption in whole or
in part, except, in the case of any Securities to be redeemed in part, the
portion thereof not being redeemed.

                  (e) All Securities issued upon any registration of transfer or
exchange of Securities will be valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.

                  (f) Notwithstanding any other provision in this Indenture, no
Global Security may be transferred to, or registered or exchanged for Securities
registered in the name of, any Person other than the Depositary for such Global
Security or any nominee thereof, and no such transfer may be registered, unless
(i) such Depositary (A) notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or (B) ceases to be a clearing
agency registered under the Exchange Act, (ii) the Company executes and delivers
to the Trustee a Company Order that such Global Security shall be so
transferable, registrable, and exchangeable, and such transfers shall be
registrable, (iii) there shall have occurred and be continuing an Event of
Default with respect to the Securities evidenced by such Global Security or (iv)
there shall exist such other circumstances, if any, as have been specified for
this purpose in accordance with Section 2.01. Notwithstanding any other
provision in this Indenture, a Global Security to which the restriction set
forth in the preceding sentence shall have ceased to apply may be transferred
only to, and may be registered and exchanged for Securities registered only in
the name or names of, such Person or Persons as the Depositary for such Global
Security shall have directed and no transfer thereof other than such a transfer
may be registered. Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security to which the
restriction set forth in the first sentence of this Section 2.05(f) shall apply,
whether pursuant to this Section 2.05, Section 2.06, 2.07, 3.05, or 12.06 or
otherwise, will be authenticated and delivered in the form of, and will be, a
Global Security.

SECTION 2.06.       TEMPORARY SECURITIES

                  Pending the preparation of definitive Securities of any
series, the Company may execute and register and upon Company Order the Trustee
will authenticate and make available for delivery temporary Securities (printed,
lithographed, or typewritten), of any authorized denomination, and substantially
in the form of the definitive Securities but with such omissions, insertions,
and variations as may be appropriate for temporary Securities, all as may be
determined by the officers executing such Securities as evidenced by their
execution of such Securities; provided, however, that the Company will use
reasonable efforts to have definitive Securities of that series available at the
times of any issuance of Securities under this Indenture. Every temporary
Security will be executed and registered by the Company and be authenticated by
the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Securities. The Company will execute and
register and furnish definitive Securities of such series as soon as practicable
and thereupon any or all temporary Securities of such series may be surrendered
in exchange therefor at the office or agency of the Company in the Place of
Payment for that series, and the Trustee will authenticate and make available
for delivery in exchange for such temporary Securities of such series one or
more definitive Securities of the same series, of any authorized denominations,
and of a like aggregate principal amount and tenor. Such exchange will be made
by the Company at its own expense and without any charge to the Holder therefor.
Until so exchanged, the temporary Securities of any series will be entitled to
the same benefits under this Indenture as definitive Securities of the same
series authenticated and delivered hereunder.

SECTION 2.07.       MUTILATED, DESTROYED, LOST, AND STOLEN SECURITIES

                  (a) If any mutilated Security is surrendered to the Trustee,
the Company will execute and the Trustee will authenticate and make available
for delivery in exchange therefor a new Security of the same series and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.

                  (b) If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss, or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company will execute and the Trustee will authenticate
and make available for delivery, in lieu of any such destroyed, lost, or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

                  (c) In case any such mutilated, destroyed, lost, or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security.

                  (d) Upon the issuance of any new Security under this Section
2.07, 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 (including the fees and expenses of the Trustee) connected
therewith.

                  (e) Every new Security of any series issued pursuant to this
Section 2.07 in exchange for any mutilated Security or in lieu of any destroyed,
lost, or stolen Security will constitute an original additional contractual
obligation of the Company, whether or not the mutilated, destroyed, lost, or
stolen Security shall be at any time enforceable by anyone, and will be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Securities of that series duly issued hereunder.

                  (f) The provisions of this Section 2.07 are exclusive and will
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost, or stolen Securities.

SECTION 2.08.       CANCELLATION OF SURRENDERED SECURITIES

                  All Securities surrendered for payment, redemption,
registration of transfer or exchange, or for credit against any sinking fund
payment will, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and will be promptly canceled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered will be promptly canceled by the Trustee. No Securities will be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section 2.08, except as expressly permitted by this Indenture. All
canceled Securities held by the Trustee will be disposed of as directed by a
Company Order, provided, however, that the Trustee will not be required to
destroy canceled Securities except in accordance with its established policies.

SECTION 2.09.       PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED

                  (a) Except as otherwise provided in accordance with Section
2.01 with respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date will be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest.

                  (b) Any interest on any Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") will forthwith cease to be
payable to the Holder on the relevant regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company
together with interest thereon (to the extent permitted by law) at the rate of
interest applicable to such Security, at its election in each case, as provided
in clause (i) or (ii) below:

                           (i) The Company may elect to make payment of any
         Defaulted Interest (and interest thereon, if any) to the Persons in
         whose names the Securities of such series (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
         will be fixed in the following manner. The Company will notify the
         Trustee in writing of the amount of Defaulted Interest (and interest
         thereon, if any) proposed to be paid on each Security of such series
         and the date of the proposed payment, and at the same time the Company
         will deposit with the Trustee an amount of money equal to the aggregate
         amount proposed to be paid in respect of such Defaulted Interest (and
         interest thereon, if any) or will 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 (and interest thereon, if
         any) as in this clause (i) provided. Thereupon the Trustee will fix a
         Special Record Date for the payment of such Defaulted Interest (and
         interest thereon, if any) which will be not more than 15 calendar days
         and not less than 10 calendar days prior to the date of the proposed
         payment and not less than 10 calendar days after the receipt by the
         Trustee of the notice of the proposed payment. The Trustee will
         promptly notify the Company of such Special Record Date and, in the
         name and at the expense of the Company, will 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 Holder of
         Securities of such series at such Holder's address as it appears in the
         Security Register, not less than 10 calendar days prior to such Special
         Record Date. Notice of the proposed payment of such Defaulted Interest
         (and interest thereon, if any) and the Special Record Date therefor
         having been so mailed, such Defaulted Interest will be paid to the
         Persons in whose names the Securities of such series (or their
         respective Predecessor Securities) are registered at the close of
         business on such Special Record Date and will no longer be payable
         pursuant to the following clause (ii).

                           (ii) The Company may make payment of any Defaulted
         Interest (and interest thereon, if any) on the Securities of any series
         in any other lawful manner not inconsistent with the requirements of
         any securities exchange on which such Securities may be listed, and
         upon such notice as may be required by such exchange, if, after notice
         given by the Company to the Trustee of the proposed payment pursuant to
         this clause (ii), such manner of payment shall be deemed practicable by
         the Trustee.

                  (c) Subject to the foregoing provisions of this Section 2.09,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security will carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.

SECTION 2.10.       PERSONS DEEMED OWNERS

                  Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee, and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 2.09) any interest on such Security and for all
other purposes whatsoever, whether or not such Security shall be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
will be affected by notice to the contrary.

SECTION 2.11.       COMPUTATION OF INTEREST

                  Except as otherwise specified in accordance with Section 2.01
for Securities of any series, interest on the Securities of each series will be
computed on the basis of a 360-day year consisting of 12 30-day months.

SECTION 2.12.       CUSIP NUMBERS

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


                      ARTICLE III. REDEMPTION OF SECURITIES

SECTION 3.01.       APPLICABILITY OF ARTICLE

                  Securities of any series which are redeemable before their
Stated Maturity will be redeemable in accordance with their terms and (except as
otherwise specified in accordance with Section 2.01 for Securities of any
series) in accordance with this Article III.

SECTION 3.02.       ELECTION TO REDEEM; NOTICE TO TRUSTEE

                  (a) The election of the Company to redeem any Securities will
be evidenced by a Board Resolution. In case of any redemption at the election of
the Company, the Company will, at least 60 calendar days prior to the Redemption
Date fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company will furnish the Trustee with an Officer's Certificate evidencing
compliance with such restriction.

                  (b) Notice of redemption of Securities to be redeemed at the
election of the Company will be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company and will
be irrevocable. Notice of redemption will be given by mail, first-class postage
prepaid, not less than 30 or more than 60 calendar days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register. All notices of redemption will identify the Securities to
be redeemed (including the CUSIP numbers thereof, if applicable) and will state
(i) the Redemption Date, (ii) the Redemption Price, (iii) if less than all the
Outstanding Securities of any series are to be redeemed, the identification
(and, in the case of partial redemption of any Securities, the principal
amounts) of the particular Securities to be redeemed, (iv) that on the
Redemption Date the Redemption Price will become due and payable upon each such
Security to be redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date, (v) the place or places where such Securities are
to be surrendered for payment of the Redemption Price, (vi) that the redemption
is for a sinking fund, if such is the case, and (vii) the specific provision of
this Indenture pursuant to which such Securities are to be redeemed.

                  (c) If less than all the Securities of any series are to be
redeemed, the particular Securities to be redeemed will be selected not more
than 60 calendar days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption, by
such method as the Trustee may deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. The Trustee
will promptly notify the Company in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.

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

SECTION 3.03.       DEPOSIT OF REDEMPTION PRICE

                  At or prior to 10:00 a.m., New York City time, on any
Redemption Date, the Company will deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 7.03) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) any accrued interest on, all of the Securities that are to be
redeemed on that date.

SECTION 3.04.       SECURITIES PAYABLE ON REDEMPTION DATE

                  (a) Notice of redemption having been given as aforesaid, the
Securities so to be redeemed will, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company defaults in the payment of the Redemption Price and accrued
interest) such Securities will cease to accrue interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security will
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified in
accordance with Section 2.01, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates in accordance with their terms
and the provisions of Section 2.09.

                  (b) If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium will, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.

SECTION 3.05.       SECURITIES REDEEMED IN PART

                  Any Security that is to be redeemed only in part will be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company will execute, and
the Trustee will authenticate and make available for delivery to the Holder of
such Security without service charge, a new Security or Securities of the same
series and of like tenor, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.

                            ARTICLE IV. SINKING FUNDS

SECTION 4.01.       APPLICABILITY OF ARTICLE

                  The provisions of this Article IV will be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified in accordance with Section 2.01 for Securities of such series. The
minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
amount of any sinking fund payment may be subject to reduction as provided in
Section 4.02. Each sinking fund payment with respect to Securities of a
particular series will be applied to the redemption of Securities of such series
as provided for by the terms of Securities of such series. SECTION 4.02.
SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES

                  The Company (a) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (b) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series, provided that such Securities have not been previously so credited. Such
Securities will be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment will be reduced
accordingly.

SECTION 4.03.       REDEMPTION OF SECURITIES FOR SINKING FUND

                  Not less than 60 calendar days prior to each sinking fund
payment date for any series of Securities, the Company will deliver to the
Trustee an Officer's Certificate specifying the amount of the next ensuing
sinking fund payment for that series pursuant to the terms of that series, the
portion thereof, if any, that is to be satisfied by payment of cash and the
portion thereof, if any, that is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 4.02 and will also deliver to the
Trustee any Securities to be so delivered. Not less than 30 calendar days before
each such sinking fund payment date, the Trustee will select the Securities to
be redeemed upon such sinking fund payment date in the manner specified in
Section 3.02(c) and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner provided in Section
3.02(b). Such notice having been duly given, the redemption of such Securities
will be made upon the terms and in the manner stated in Sections 3.04 and 3.05.

                               ARTICLE V. SECURITY

SECTION 5.01.       SECURITY INTEREST

                  (a) In order to secure the payment of the Indenture
Obligations, the Company and the Trustee have entered into the Company Security
Documents. In addition, the Subsidiaries (except MFN Insurance Company) of the
Company have guaranteed the payment of the Indenture Obligations pursuant to the
Subsidiaries Guaranty Agreement. Payment of amounts due by the Subsidiaries
under the Subsidiaries Guaranty Agreement is secured by the Subsidiaries
Security Agreement entered into by each Subsidiary (except MFN Insurance
Company) and the Trustee. The Company Security Documents, the Subsidiaries
Guaranty Agreement and the Subsidiaries Security Agreement are herein referred
to collectively as the "Collateral Security Documents." The Trustee and each
Holder, by accepting Securities issued under this Indenture, acknowledge the
binding effect of the Collateral Security Documents as in effect and in
existence on the date hereof; provided, that in the event of a conflict between
the provisions of any of the Collateral Security Documents and the provisions of
the Trust Indenture Act, the provisions of the Trust Indenture Act will control.

                  (b) The Trustee and each Holder, by accepting Securities
issued under this Indenture, acknowledge and agree that, as more fully set forth
in the Company Pledge Agreement, the Company Security Agreement, the
Subsidiaries Guaranty Agreement and the Subsidiaries Security Agreement, if the
Company or any Subsidiary enters into a Working Capital Facility, the rights of
any party lending money to the Company or a Subsidiary pursuant to such Working
Capital Facility, with respect to certain assets comprising a portion of the
Company Collateral or the Subsidiaries Collateral will be senior to those of the
Holders of Securities.

                  (c) The Company Collateral, and subject to subsection (b) of
this Section 5.01, the Subsidiaries Collateral, will be held for the equal and
ratable benefit and security of the Holders of Securities of each series issued
under this Indenture without preference, priority, or distinction of any thereof
over any other by reason of difference in time of issuance, sale, or otherwise,
and for the enforcement of the Indenture Obligations.

SECTION 5.02.       RECORDING OF SECURITY INTERESTS; OPINIONS OF COUNSEL

                  (a) The Company and each Subsidiary (except MFN Insurance
Company), as applicable, has executed, delivered, filed, and recorded or, as set
forth on Schedule 5.02, will execute, deliver, file, and record, all instruments
and documents, and has done or, as set forth on Schedule 5.02, will do all such
acts and other things, at the Company's or such Subsidiaries' expense, as
applicable, as are necessary to subject the Company Collateral and the
Subsidiaries Collateral to the Security Interest. The Company will, and will
cause each Subsidiary (except MFN Insurance Company), as applicable, to execute,
deliver, file and record all instruments and do all acts and other things as may
be reasonably necessary to perfect, maintain and protect the Security Interest.

                  (b) In addition to its obligations under the Collateral
Security Documents, the Company will, and will cause each Subsidiary (except MFN
Insurance Company) to, deliver promptly after the execution and delivery of this
Indenture, as contemplated in Schedule 5.02, any other instrument of further
assurance or amendment or waiver of any provision of this Indenture or the
Collateral Security Documents relating to the lien and security interest in the
Company Collateral and the Subsidiaries Collateral for the benefit of the
Holders of Securities, an Opinion of Counsel in a form acceptable to the Trustee
either (i) stating that, in the opinion of such Counsel, this Indenture, the
Collateral Security Documents, any financing statements, any continuation
statements, and any other instruments of further assurance or amendment have
been properly recorded, registered, and filed with respect to such types of
Company Collateral or Subsidiaries Collateral as to which a lien and security
interest may be perfected by such actions, and that all such other acts and
things have been done, to the extent necessary under applicable law to perfect
and make effective the Security Interest therein and reciting the elements of
such action in reasonable detail, and stating that, as to the Collateral
Security Documents, such recording, registrations and filing, and such other
acts and things are the only recordings, registrations and filings, or other
acts and things, necessary under applicable law to give notice thereof and that
no rerecordings, reregistrations, refilings, or other acts or things, are
necessary under applicable law to maintain such notice, further stating that all
financing statements and continuation statements have been executed and filed
that are necessary under applicable law fully to preserve and protect the rights
of the Holders of Securities and the Trustee hereunder and under the Collateral
Security Documents with respect to types of Company Collateral or Subsidiary
Collateral as to which a lien and security interest may be perfected by such
filing, or (ii) stating that, in the opinion of such counsel, no such action is
necessary under applicable law to perfect or make effective the Security
Interest. Any such opinion may be based upon reasonable assumptions not
inconsistent with the terms of this Indenture or the Collateral Security
Documents as to future matters and as to actions taken and to be taken by the
Company and any Subsidiary (except MFN Insurance Company) or any other Person
(other than the Trustee), and may set forth the reasons underlying such opinion.

                  (c) In addition to its obligations under the Collateral
Security Documents, the Company will furnish to the Trustee, within thirty
calendar days after March 23, in each year beginning with the year 2000, an
Opinion of Counsel (which may be an opinion of internal counsel), dated as of
such date, in a form acceptable to the Trustee, either (i) stating that, in the
opinion of such Counsel, such action has been taken with respect to the
recording, registering, filing, rerecording, reregistering, and refiling of the
Indenture, all supplemental indentures, the Collateral Security Documents,
financing statements, continuation statements, and all other instruments of
further assurance as is necessary under applicable law to maintain the Security
Interest and reciting the elements of such action in reasonable detail, and
stating that all financing statements and continuation statements have been
executed and filed and such other acts and things have been done that are
necessary under applicable law fully to preserve and protect the rights of the
Holders and the Trustee hereunder and under the Collateral Security Documents,
or (ii) stating that, in the opinion of such Counsel, no such action is
necessary under applicable law to maintain the Security Interest. Any such
opinion may be based upon reasonable assumptions not inconsistent with the terms
of this Indenture or the Collateral Security Documents as to future matters and
as to actions taken or to be taken by the Company, any Subsidiary or any other
Person (other than the Trustee), and may set forth the reasons underlying such
opinion.

SECTION 5.03.       RELEASE OF COLLATERAL

                  In addition to its relative obligations under the Collateral
Security Documents, as a condition to any release of Company Collateral or
Subsidiaries Collateral, the Company will, and will cause each Subsidiary
(except MFN Insurance Company) to, deliver to the Trustee the certificate or
opinion, if any, required by Section 314(d) of the Trust Indenture Act as to the
fair value of any Company Collateral or Subsidiaries Collateral to be released,
dated as of a date not more than 60 calendar days prior to the date of release.
Any release of Company Collateral or Subsidiaries Collateral made in compliance
with the provisions of a Company Security Document or the Subsidiaries Security
Agreement, as the case may be, will be deemed not to impair the Security
Interest in contravention of the provisions of this Indenture.

SECTION 5.04.       RELEASE UPON DEFEASANCE OR RELEASE OF COMPANY'S OBLIGATIONS

                  In the event that (a) the Company complies with Section 14.01
or (b) the Indenture Obligations have been terminated and there are no other
Indenture Obligations under the Collateral Security Documents that remain
Outstanding, the Trustee will, upon the request of the Company and on behalf of
the Holders of Securities issued hereunder, disclaim and give up any and all
rights it has in or to the Company Collateral and the Subsidiaries Collateral
and any rights it has under the Collateral Security Documents (excluding
unasserted indemnity claims thereunder), and the Trustee will not be deemed to
hold the Security Interest for the benefit of the Holders.

SECTION 5.05.       RELIANCE ON OPINION OF COUNSEL

                  The Trustee will, before taking any action under this Article
V, be entitled to receive an Opinion of Counsel, stating the legal effect of
such action, and that such action will not be in contravention of the provisions
hereof or of the Collateral Security Documents. Any such opinion will be full
protection to the Trustee for any action taken or omitted to be taken in
reliance thereon.

SECTION 5.06.       PAYMENT OF EXPENSES

                  On demand of the Trustee, the Company forthwith will pay or
satisfactorily provide for all reasonable expenditures incurred by the Trustee
under this Indenture and all such sums will be a Lien upon the Company
Collateral and will be secured thereby.

SECTION 5.07.       TRUSTEE'S DUTIES

                  (a) Subject to Section 5.01 and the provisions of the
Collateral Security Documents, the Trustee will have power to enter into any
agreement or take any action required by the Collateral Security Documents
pursuant to the terms thereof and to institute and to maintain such suits and
proceedings, to the extent permitted under the terms of the Collateral Security
Documents, as it may deem expedient to prevent any impairment of the Company
Collateral or the Subsidiaries Collateral by any acts which may be unlawful or
in violation of the Collateral Security Documents or this Indenture, including
the power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule, or order that may be unconstitutional or otherwise invalid or
if the enforcement of, or compliance with, such enactment, rule or order would
impair the Security Interest in contravention of this Indenture or be
prejudicial to the interests of the Holders of Securities issued hereunder or of
the Trustee.

                  (b) The powers conferred upon the Trustee by this Article V
are solely to protect the Security Interest and will not impose any duty upon
the Trustee to exercise any such powers except as expressly provided in this
Indenture. The Trustee will be under no duty to the Company or any Subsidiary
whatsoever to make or give any presentment, demand for performance, notice of
nonperformance, protest, notice of protest, notice of dishonor, or other notice
or demand in connection with any Company Collateral or Subsidiaries Collateral
or to take any steps necessary to preserve any rights against prior parties
except as expressly provided in this Indenture. The Trustee will not be liable
to the Company or any Subsidiary for failure to collect or realize upon any or
all of the Company Collateral or the Subsidiaries Collateral, or for any delay
in so doing, nor will the Trustee be under any duty to the Company or any
Subsidiary to take any action, whatsoever with regard thereto. The Trustee has
no duty to the Company or to the Holders to comply with any recording, filing,
or other legal requirements necessary to establish or maintain the validity,
priority, or enforceability of, or the Trustee's rights in or to, any of the
Company Collateral or Subsidiaries Collateral.

                 ARTICLE VI. DEFEASANCE AND COVENANT DEFEASANCE

SECTION 6.01.       COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE

                  The Company may elect, at its option by Board Resolution at
any time, to have either Section 6.02 or Section 6.03 applied to the Outstanding
Securities of any series designated pursuant to Section 2.01 as being defeasible
pursuant to this Article VI (hereinafter called "Defeasible Series"), upon
compliance with the conditions set forth below in this Article VI, provided that
Section 6.02 will not apply to any series of Securities that is convertible into
Common Stock pursuant to Section 2.01(b)(xvi) or convertible into or
exchangeable for any other securities pursuant to Section 2.01(b)(xvii).

SECTION 6.02.       DEFEASANCE AND DISCHARGE

                  Upon the Company's exercise of the option provided in Section
6.01 to have this Section 6.02 applied to the Outstanding Securities of any
Defeasible Series and subject to the proviso to Section 6.01, the Company will
be deemed to have been discharged from its obligations with respect to the
Outstanding Securities of such series as provided in this Section 6.02 on and
after the date the conditions set forth in Section 6.04 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means that
the Company will be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Securities of such series and to have satisfied
all its other obligations under the Securities of such series and this Indenture
insofar as the Securities of such series are concerned (and the Trustee, at the
expense of the Company, will execute proper instruments acknowledging the same),
subject to the following which will survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of Securities of such series to
receive, solely from the trust fund described in Section 6.04 and as more fully
set forth in Section 6.04, payments in respect of the principal of and any
premium and interest on such Securities of such series when payments are due,
(b) the Company's obligations with respect to the Securities of such series
under Sections 2.05, 2.06, 2.07, 7.02, 7.03, and 12.06, (c) the rights, powers,
trusts, duties, and immunities of the Trustee hereunder, and (d) this Article
VI. Subject to compliance with this Article VI, the Company may exercise its
option provided in Section 6.01 to have this Section 6.02 applied to the
Outstanding Securities of any Defeasible Series notwithstanding the prior
exercise of its option provided in Section 6.01 to have Section 6.03 applied to
the Outstanding Securities of such series.

SECTION 6.03.       COVENANT DEFEASANCE

                  Upon the Company's exercise of the option provided in Section
6.01 to have this Section 6.03 applied to the Outstanding Securities of any
Defeasible Series, (a) the Company will be released from its obligations under
Sections 7.04 through 7.06, inclusive, Section 13.01, and such provisions of any
indenture supplemental hereto as may be specified in such indenture supplemental
hereto, and (b) the occurrence of any event specified in Sections 9.01(a)(iii),
9.01(a)(iv) (with respect to any of Sections 7.04 through 7.06, inclusive,
Section 13.01, and such provisions of any Supplemental Indenture as may be
specified in such Supplemental Indenture), Sections 9.01(a)(v), 9.01(a)(vi), and
9.01(a)(ix) will be deemed not to be or result in an Event of Default, in each
case with respect to the Outstanding Securities of such series as provided in
this Section on and after the date the conditions set forth in Section 6.04 are
satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that the Company may omit to comply with and will have
no liability in respect of any term, condition, or limitation set forth in any
such specified Section or provision (to the extent so specified in the case of
Section 9.01(a)(iv)), whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or provision or by reason of any reference
in any such Section or provision to any other provision herein or in any other
document, but the remainder of this Indenture and the Securities of such series
will be unaffected thereby.

SECTION 6.04.       CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE

                  The following will be the conditions to application of either
Section 6.02 or Section 6.03 to the Outstanding Securities of any Defeasible
Series:

                  (a) The Company shall irrevocably have deposited or caused to
         be deposited with the Trustee (or another trustee that satisfies the
         requirements contemplated by Section 11.08 and agrees to comply with
         the provisions of this Article VI applicable to it) as trust funds in
         trust for the benefit of the Holders of Outstanding Securities of such
         series (i) money in an amount, or (ii) U.S. Government Obligations that
         through the scheduled payment of principal and interest in respect
         thereof in accordance with their terms will provide, without
         reinvestment, not later than one day before the due date of any
         payment, money in an amount, or (iii) a combination thereof, in each
         case sufficient to pay and discharge, and which will be applied by the
         Trustee (or any such other qualifying trustee) to pay and discharge,
         the principal of and any premium and interest on the Securities of such
         series on the respective Stated Maturities or on any earlier date or
         dates on which the Securities of such series shall be subject to
         redemption and the Company shall have given the Trustee irrevocable
         instructions satisfactory to the Trustee to give notice to the Holders
         of the redemption of the Securities of such series, all in accordance
         with the terms of this Indenture and the Securities of such series.

                  (b) In the case of an election under Section 6.02, the Company
         shall have delivered to the Trustee an Opinion of Counsel (from a
         counsel who shall not be an employee of the Company) to the effect that
         (i) the Company has received from, or there has been published by, the
         Internal Revenue Service a ruling, or (ii) since the date of this
         Indenture there has been a change in the applicable federal income tax
         law, in either case to the effect that, and based thereon such opinion
         shall confirm that, the Holders of the Outstanding Securities of such
         series will not recognize gain or loss for federal income tax purposes
         as a result of the deposit, Defeasance, and discharge to be effected
         with respect to the Securities of such series and will be subject to
         federal income tax on the same amount, in the same manner, and at the
         same times as would be the case if such deposit, Defeasance, and
         discharge were not to occur.

                  (c) In the case of an election under Section 6.03, the Company
         shall have delivered to the Trustee an Opinion of Counsel (from a
         counsel who shall not be an employee of the Company) to the effect that
         the Holders of the Outstanding Securities of such series will not
         recognize gain or loss for federal income tax purposes as a result of
         the deposit and Covenant Defeasance to be effected with respect to the
         Securities of such series and will be subject to federal income tax on
         the same amount, in the same manner, and at the same times as would be
         the case if such deposit and Covenant Defeasance were not to occur.

                  (d) The Company shall have delivered to the Trustee an Opinion
         of Counsel (from a counsel who shall not be an employee of the Company)
         stating that the defeasance trust does not violate the Investment
         Company Act of 1940.

                  (e) The Company shall have delivered to the Trustee the
         opinion of a nationally recognized independent public accounting firm
         certifying the sufficiency of the amount of the moneys, U.S. Government
         Obligations, or a combination thereof, placed on deposit to pay,
         without regard to any reinvestment, the principal of and any premium
         and interest on the Securities on the Stated Maturity thereof or on any
         earlier date on which the Securities shall be subject to redemption as
         to which the Company has given irrevocable instructions satisfactory to
         the Trustee to give notice to the Holders of the redemption of the
         Securities of such series, all in accordance with the terms of this
         Indenture and the Securities of such series.

                  (f) The Company shall have delivered to the Trustee an
         Officer's Certificate (i) stating that the deposit was not made by the
         Company with the intent of preferring the holders of the Securities
         over the other creditors of the Company or with the intent of
         defeating, hindering, delaying or defrauding creditors of the Company
         or others, and (ii) to the effect that the Securities of such series,
         if then listed on any securities exchange, will not be delisted solely
         as a result of such deposit.

                  (g) No Default or Event of Default shall have occurred and be
         continuing at the time of such deposit or, with regard to any Event of
         Default or any such event specified in Sections 9.01(a)(vii) and
         (viii), at any time on or prior to the 124th calendar day after the
         date of such deposit (it being understood that this condition will not
         be deemed satisfied until after such 124th calendar day).

                  (h) Such Defeasance or Covenant Defeasance will not cause the
         Trustee to have a conflicting interest within the meaning of the Trust
         Indenture Act (assuming all Securities are in default within the
         meaning of such Act).

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

                  (j) The Company shall have delivered to the Trustee an
         Officer's Certificate and an Opinion of Counsel, each stating that all
         conditions precedent with respect to such Defeasance or Covenant
         Defeasance have been complied with.

SECTION 6.05. DEPOSITED MONEY AND U.S. GOVERNMENT  OBLIGATIONS TO BE HELD IN
              TRUST; OTHER MISCELLANEOUS PROVISIONS

                  (a) Subject to the provisions of Section 7.03(e), all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section
6.05 and Section 6.06, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 6.04 in respect of the
Securities of any Defeasible Series will be held in trust and applied by the
Trustee, in accordance with the provisions of the Securities of such series and
this Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of Securities of such series, of all sums due and to
become due thereon in respect of principal and any premium and interest, but
money so held in trust need not be segregated from other funds except to the
extent required by law.

                  (b) The Company will pay and indemnify the Trustee against any
tax, fee, or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 6.04 or the principal and interest
received in respect thereof other than any such tax, fee, or other charge that
by law is for the account of the Holders of Outstanding Securities.

                  (c) Notwithstanding anything in this Article VI to the
contrary, the Trustee will deliver or pay to the Company from time to time upon
a Company Request any money or U.S. Government Obligations held by it as
provided in Section 6.04 with respect to Securities of any Defeasible Series
that are in excess (in the opinion of the nationally recognized independent
public accounting firm rendering an opinion pursuant to Section 6.04(e)) of the
amount thereof that would then be required to be deposited to effect an
equivalent Defeasance or Covenant Defeasance with respect to the Securities of
such series.

SECTION 6.06.       REINSTATEMENT

                  If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article VI with respect to the Securities of any
series by reason of any order or judgment of any court or governmental authority
enjoining, restraining, or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Securities of such series
will be revived and reinstated as though no deposit had occurred pursuant to
this Article VI with respect to Securities of such series until such time as the
Trustee or Paying Agent is permitted to apply all money held in trust pursuant
to Section 6.05 with respect to Securities of such series in accordance with
this Article VI; provided, however, that if the Company makes any payment of
principal of or any premium or interest on any Security of such series following
the reinstatement of its obligations, the Company will be subrogated to the
rights of the Holders of Securities of such series to receive such payment from
the money so held in trust.

                ARTICLE VII. PARTICULAR COVENANTS OF THE COMPANY

SECTION 7.01.       PAYMENT OF PRINCIPAL, PREMIUM, AND INTEREST ON SECURITIES

                  The Company, for the benefit of each series of Securities,
will duly and punctually pay the principal of and any premium and interest on
the Securities of that series in accordance with the terms of the Securities and
this Indenture.

SECTION 7.02.       MAINTENANCE OF OFFICE OR AGENCY

                  (a) The Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices, and demands may be made or served at
the Corporate Trust Office, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands.

                  (b) The Company may also from time to time designate one or
more other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission will in any manner relieve the Company of its obligation to maintain
an office or agency in each Place of Payment for Securities of any series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.

SECTION 7.03.       MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST

                  (a) If the Company shall at any time act as its own Paying
Agent with respect to any series of Securities, it will, on or before each due
date of the principal of or any premium or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its action or
failure so to act.

                  (b) Whenever the Company shall have one or more Paying Agents
for any series of Securities, it will, prior to each due date of the principal
of or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.

                  (c) The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent will agree with the Trustee, subject to
the provisions of this Section 7.03, that such Paying Agent will (i) comply with
the provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(ii) during the continuance of any default by the Company (or any other obligor
upon the Securities of that series) in the making of any payment in respect of
the Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.

                  (d) The Company may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent will be released from all further liability with
respect to such money.

                  (e) Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the principal of or any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium, or interest has become due and payable
will be paid to the Company upon a Company Request (or, if then held by the
Company, will be discharged from such trust); and the Holder of such Security
will thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, will thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which will not
be less than 30 calendar days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

SECTION 7.04.       PAYMENT OF TAXES AND OTHER CLAIMS

                  The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary of
the Company or upon the income, profits, or property of the Company or any
Subsidiary of the Company, and (b) all lawful claims for labor, materials and
supplies, in each case which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary of the Company and would have a
Material Adverse Effect; provided, however, that (x) the Company will not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge, or claim the amount, applicability, or validity of which is
being contested in good faith by appropriate proceedings, and (y) any failure to
pay any such tax, assessment, charge, or claim shall not constitute a breach of
this Section 7.04 if such failure (i) was not willful and (ii) does not and will
not result in any Material Adverse Effect.

SECTION 7.05.       EXISTENCE

                  Subject to Article XII, the Company will, and will cause each
of its Subsidiaries to, do or cause to be done all things necessary to preserve
and keep in full force and effect its existence, rights (charter and statutory),
and franchises; provided, however, that, except with respect to the preservation
of the Company's existence, nothing in this Section 7.05 will (i) require the
Company to take any action that it determines in good faith to be contrary to
its best interests, so long as the failure to take such action will not have a
Material Adverse Effect, or (ii) prevent the Company from taking any action that
it determines in good faith to be in its best interests, so long as the taking
of such action will not have a Material Adverse Effect.

SECTION 7.06.       COMPLIANCE WITH LAWS

                  The Company will, and will cause each of its Subsidiaries to,
comply with all applicable federal, state, local, or foreign laws, rules,
regulations, or ordinances, including without limitation such laws, rules,
regulations, or ordinances relating to pension, environmental, employee, and tax
matters, to the extent that, in the aggregate, the failure so to comply would
have a Material Adverse Effect.

SECTION 7.07.       STATEMENT BY OFFICERS AS TO DEFAULT

                  The Company will deliver to the Trustee, within 120 calendar
days after the end of each fiscal year of the Company ending after the date
hereof, an officer's certificate signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company
stating whether or not to the knowledge of such person after due inquiry the
Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company is in
default, specifying all such defaults and the nature and status thereof of which
such person may have such knowledge.

SECTION 7.08.       WAIVER OF CERTAIN COVENANTS

                  The Company may omit in any particular instance to comply with
any term, provision, or condition set forth in Sections 7.04 and 7.06, and such
provisions of any Supplemental Indenture as may be specified in such
Supplemental Indenture, with respect to the Securities of any series if the
Holders of a majority in principal amount of the Outstanding Securities of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision, or condition,
but no such waiver will extend to or affect such term, provision, or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision, or condition will remain in full force and
effect.

SECTION 7.09.       CALCULATION OF ORIGINAL ISSUE DISCOUNT

                  The Company will, to the extent applicable, file with the
Trustee promptly at the end of each calendar year (i) a written notice
specifying the amount of original issue discount (including daily rates and
accrual periods) accrued on Outstanding Securities as of the end of such year
and (ii) such other specific information relating to such original issue
discount as may then be required under the Internal Revenue Code of 1986, as
amended from time to time.

               ARTICLE VIII. SECURITIES HOLDERS' LISTS AND REPORTS
                         BY THE COMPANY AND THE TRUSTEE

SECTION 8.01.       COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS

                  The Company will furnish or cause to be furnished to the
Trustee (a) semi-annually, not more than 15 calendar days after the applicable
Regular Record Date, a list for each series of Securities, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Securities of such series as of such Regular Record Date and (b) at such other
times as the Trustee may request in writing, within 30 calendar 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 calendar days prior to the time such list is
furnished; excluding from any such list names and addresses received by the
Trustee in its capacity as Security Registrar.

SECTION 8.02.       PRESERVATION OF INFORMATION; COMMUNICATION TO HOLDERS

                  (a) The Trustee will preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 8.01 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 8.01 upon receipt of a new list so furnished.

                  (b) The rights of the Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the Trustee, will be
as provided by the Trust Indenture Act.

                  (c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them will be held accountable by reason of
any disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.

SECTION 8.03.       REPORTS BY TRUSTEE

                  The Trustee will transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided therein. If
required by Section 313(a) of the Trust Indenture Act, the Trustee will, within
sixty days after each May 15 following the date of this Indenture, deliver to
Holders a brief report, dated as of such May 15, which complies with the
provisions of such Section 313(a). A copy of each such report will, at the time
of such transmission to Holders, be filed by the Trustee with each stock
exchange upon which any Securities are listed, with the Commission, and with the
Company. The Company will promptly notify the Trustee when any Securities are
listed on any stock exchange.

SECTION 8.04.       REPORTS BY COMPANY

                  The Company will file with the Trustee and the Commission, and
transmit to Holders, such information, documents, and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided therein; provided that any such information,
documents, or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act will be filed with the Trustee within 15
calendar days after the same is so required to be filed with the Commission.
Delivery of such reports, information, and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such will not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).

                               ARTICLE IX. DEFAULT

SECTION 9.01.       EVENT OF DEFAULT

                  (a) "Event of Default," wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it may 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):

                           (i) default in the payment of any interest on any
         Security of that series when it becomes due and payable, and
         continuance of such default for a period of 10 calendar days;

                           (ii) default in the payment of principal of (or
         premium, if any, on) any Security of that series when it becomes due
         and payable, whether by redemption, repurchase, or otherwise;

                           (iii) default in the making of any sinking fund
         payment when and as due by the terms of a Security of that series;

                           (iv) default in the performance, or breach, of any
         covenant or warranty of the Company in this Indenture (other than a
         covenant or warranty, a default in the performance or breach of which
         is elsewhere in this Section 9.01 specifically dealt with or which has
         expressly been included in this Indenture solely for the benefit of one
         or more series of Securities other than that series), and continuance
         of such default or breach for a period of 30 calendar 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 principal amount of the Outstanding Securities of that series 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;

                           (v) any default in the payment at maturity of
         principal of any Indebtedness of the Company or any Subsidiary of the
         Company in an aggregate principal amount of $10.0 million or more,
         which, in any such case, (A) continues beyond any period of grace
         provided with respect thereto and (B) results in such Indebtedness
         becoming due prior to its stated maturity or occurs at the final
         maturity of such Indebtedness; provided, however, that, subject to the
         provisions of Section 11.01 and 9.08, the Trustee will not be deemed to
         have knowledge of such nonpayment or other default unless either (1) a
         Responsible Officer of the Trustee has actual knowledge of nonpayment
         or other default or (2) the Trustee has received written notice thereof
         from the Company, from any Holder, from the holder of any such
         Indebtedness or from the trustee under the agreement or instrument
         relating to such Indebtedness;

                           (vi) the entry of one or more judgments or orders for
         the payment of money against the Company, which judgments and orders
         create a liability of $25.0 million or more in excess of insured
         amounts and have not been stayed (by appeal or otherwise), vacated,
         discharged, or otherwise satisfied within 60 calendar days of the entry
         of such judgments and orders;

                           (vii) the entry by a court having jurisdiction in the
         premises of (A) a decree or order for relief in respect of the Company
         or any Subsidiary in an involuntary case or proceeding under any
         applicable federal or state bankruptcy, insolvency, reorganization, or
         other similar law or (B) a decree or order adjudging the Company or any
         Subsidiary a bankrupt or insolvent, or approving as properly filed a
         petition seeking reorganization, arrangement, adjustment, or
         composition of or in respect of the Company or any Subsidiary under any
         applicable federal or state law, or appointing a custodian, receiver,
         liquidator, assignee, trustee, sequestrator, or other similar official
         of the Company or any Subsidiary or of any substantial part of its
         property, or ordering the winding up or liquidation of its affairs, and
         the continuance of any such decree or order for relief or any such
         other decree or order unstayed and in effect for a period of 60
         calendar days;

                           (viii) the commencement by the Company or any
         Subsidiary of a voluntary case or proceeding under any applicable
         federal or state bankruptcy, insolvency, reorganization, or other
         similar law or of any other case or proceeding to be adjudicated a
         bankrupt or insolvent, or the consent by it to the entry of a decree or
         order for relief in respect of the Company or any Subsidiary in an
         involuntary case or proceeding under any applicable federal or state
         bankruptcy, insolvency, reorganization, or other similar law or to the
         commencement of any bankruptcy or insolvency case or proceeding against
         it, or the filing by it of a petition or answer or consent seeking
         reorganization or relief with respect to the Company under any
         applicable federal or state bankruptcy, insolvency, reorganization, or
         other similar law, or the consent by it to the filing of such petition
         or to the appointment of or taking possession by a custodian, receiver,
         liquidator, assignee, trustee, sequestrator, or other similar official
         of the Company or any Subsidiary or of any substantial part of its
         property pursuant to any such law, or the making by it of an assignment
         for the benefit of creditors, or the admission by it in writing of its
         inability to pay its debts generally as they become due, or the taking
         of corporate action by the Company or any Subsidiary in furtherance of
         any such action;

                           (ix) default in the performance, or breach, of any
         covenant or warranty of the Company or any Subsidiary, and the
         continuance of such default or breach for a period of time that extends
         beyond any applicable grace or cure period provided, in any Collateral
         Security Document;

                           (x) the Subsidiaries Guaranty Agreement or any future
         guaranty agreement entered into by a Subsidiary of the Company acquired
         or created after the date hereof shall be held in a judicial proceeding
         to be unenforceable or invalid or shall cease for any reason to be in
         full force and effect or any Subsidiary guarantor, or any Person acting
         on behalf of any Subsidiary guarantor shall deny or disaffirm its
         obligations under its subsidiary guarantee agreement; or

                           (xi) any other Event of Default provided in an
         indenture supplemental hereto with respect to Securities of the series
         created thereunder.

                  (b) If an Event of Default (other than an Event of Default
arising under Section 9.01(a)(vii) or (viii)) with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in
the terms thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) will become immediately due and payable. If an Event of Default under
Section 9.01(a)(vii) or (viii) occurs, then the principal of, premium, if any,
and accrued interest on the Securities shall become immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.

                  (c) At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article IX provided, the Holders of a majority in principal
amount of the outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if (i) the Company has paid or deposited with the Trustee a sum
sufficient to pay (A) all overdue interest on all Securities of that series, (B)
the principal of (and premium, if any, on) any Securities of that series which
have become due otherwise than by such declaration of acceleration and any
interest thereon at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue
interest at the rate or rates prescribed therefor in such Securities, and (D)
all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements, and advances of the Trustee and its
agents and counsel and (ii) all Events of Default with respect to Securities of
that series, other than the non-payment of the principal of Securities of that
series that has become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 9.01(d). No such rescission will affect
any subsequent default or impair any right consequent thereon.

                  (d) The Holders of a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default (i) in the payment of the
principal of or any premium or interest on any Security of such series or (ii)
in respect of a covenant or provision hereof which under Article XI cannot be
modified or amended without the consent of the Holder of each Outstanding
Security of such series affected. Upon any such waiver, such default will cease
to exist, and any Event of Default arising therefrom will be deemed to have been
cured, for every purpose of this Indenture, but no such waiver will extend to
any subsequent or other default or impair any right consequent thereon.

SECTION 9.02. COVENANT OF COMPANY TO PAY TO TRUSTEE WHOLE AMOUNT DUE ON 
              SECURITIES ON DEFAULT IN PAYMENT OF INTEREST OR PRINCIPAL; SUITS 
              FOR ENFORCEMENT BY TRUSTEE

                  (a) The Company covenants that if (i) default is made in the
payment of any interest on any Security when such interest becomes due and
payable and such default continues for a period of 30 calendar days or (ii)
default is made in the payment of the principal of (or premium, if any, on) any
Security when it becomes due and payable, the Company will, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such Securities, the whole
amount then due and payable on such Securities for principal and any premium and
interest and, to the extent that payment of such interest will be legally
enforceable, interest on any overdue principal and premium and on any overdue
interest, at the rate or rates prescribed therefor in such Securities, and, in
addition thereto, such further amount as will be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel.

                  (b) If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual, including without limitation actions with respect to the Company
Collateral and the Subsidiaries Collateral, to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.

                  (c) In case of any judicial proceeding relative to the Company
(or any other obligor upon the Securities), its property or its creditors, the
Trustee will be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee will be authorized to collect and receive
any money or other property payable or deliverable on any such claims and to
distribute the same, and any custodian, receiver, assignee, trustee, liquidator,
sequestrator, or other similar official in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee consents to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements, and advances of the Trustee and its
agents and counsel, and any other amounts due the Trustee under Section 11.06.

                  (d) No provision of this Indenture will be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment, or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding;
provided, however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors' or other similar committee.

                  (e) All rights of action and claims under this Indenture or
the Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee will be
brought in its own name as trustee of an express trust, and any recovery of
judgment will, after provision for the payment of the reasonable compensation,
expenses, disbursements, and advances of the Trustee and its agents and counsel,
be for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.

SECTION 9.03.       APPLICATION OF MONEY COLLECTED BY TRUSTEE

                  Any money collected by the Trustee pursuant to this Article IX
will be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or any premium or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:

                  FIRST: To the payment of all amounts due the Trustee under
                  Section 11.06; and

                  SECOND: To the payment of the amounts then due and unpaid for
                  interest on the Securities in respect of which or for the
                  benefit of which such money has been collected, ratably,
                  without preference or priority of any kind (except as provided
                  by any subordination provisions provided in an indenture
                  supplemental with respect to the securities of the series
                  created thereunder pursuant to Section 2.01(b)(xviii)),
                  according to the amounts due and payable on such Securities
                  for interest thereon.

                  THIRD: To the payment of the amounts then due and unpaid for
                  principal of and any premium on the Securities in respect of
                  which or for the benefit of which such money has been
                  collected, ratably, without preference or priority of any kind
                  (except as provided by any subordination provisions provided
                  in an indenture supplemental with respect to the securities of
                  the series created thereunder pursuant to Section
                  2.01(b)(xviii)), according to the amounts due and payable on
                  such Securities for principal and any premium, respectively.

SECTION 9.04.       LIMITATION ON SUITS BY HOLDERS OF SECURITIES

                  Except as otherwise provided in Section 316(b) of the Trust
Indenture Act, no Holder of any Security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of that
series, (b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder, (c) such Holder or Holders have offered to the
Trustee reasonable indemnity against the costs, expenses, and liabilities to be
incurred in compliance with such request, (d) the Trustee for 60 calendar days
after its receipt of such notice, request, and offer of indemnity has failed to
institute any such proceeding, and (e) no direction inconsistent with such
written request has been given to the Trustee during such 60-day period by the
Holders of a majority in principal amount of the Outstanding Securities of that
series, it being understood and intended that no one or more of such Holders
will have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb, or prejudice the rights of any
other of such Holders, or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all of such Holders.

SECTION 9.05.  RIGHTS AND  REMEDIES  CUMULATIVE;  DELAY OR  OMISSION IN EXERCISE
               OF RIGHTS NOT A WAIVER OF EVENT OF DEFAULT

                  (a) Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost, or stolen Securities in
the last paragraph of Section 2.07, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy will, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, will not
prevent the concurrent assertion or employment of any other appropriate right or
remedy.

                  (b) No delay or omission of the Trustee or of any Holder of
any Securities to exercise any right or remedy accruing upon any Event of
Default will 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 IX or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.

SECTION 9.06. RIGHTS OF HOLDERS OF MAJORITY IN PRINCIPAL AMOUNT OF OUTSTANDING
 .             SECURITIES TO DIRECT TRUSTEE

                  The Holders of a majority in principal amount of the
Outstanding Securities of any series will have the right to direct the Trustee
with respect to the time, method, and place of conducting any proceeding for any
remedy available to the Trustee and the exercise of any trust or power conferred
on the Trustee, in each case with respect to the Securities of such series,
provided that (a) such direction will not be in conflict with any rule of law or
with this Indenture and (b) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction.

SECTION 9.07. REQUIREMENT OF AN UNDERTAKING TO PAY COSTS IN CERTAIN SUITS UNDER 
              THE INDENTURE OR AGAINST THE TRUSTEE

                  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,
suffered, or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs, including legal fees and expenses, against any such party litigant, in
the manner and to the extent provided in the Trust Indenture Act; provided that
neither this Section 9.07 nor the Trust Indenture Act will be deemed to
authorize any court to require such an undertaking or to make such an assessment
in any suit instituted by the Trustee or by the Company.

SECTION 9.08.       NOTICE OF DEFAULTS

                  If a Default occurs hereunder with respect to Securities of
any series, the Trustee will give the Holders of Securities of such series
notice of such Default actually known to it as and to the extent provided by the
Trust Indenture Act; provided, however, that in the case of any Default of the
character specified in Section 9.01(a)(iv) with respect to Securities of such
series no such notice to Holders will be given until at least 30 calendar days
after the occurrence thereof. The Company will give the Trustee notice of any
uncured Event of Default within 10 days after any Responsible Officer of the
Company becomes aware of or receives actual notice of such Event of Default.

SECTION 9.09. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM, AND 
              INTEREST

                  Notwithstanding any other provision in this Indenture, the
Holder of any Security will have the right, which is absolute and unconditional,
to receive payment of the principal of, premium, if any, and (subject to Section
2.09) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights may not
be impaired without the consent of such Holder.

SECTION 9.10.       RESTORATION OF RIGHTS AND REMEDIES

                  If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee, and the Holders will
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders will continue
as though no such proceeding had been instituted.

SECTION 9.11.       TRUSTEE MAY FILE PROOFS OF CLAIMS

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

                      ARTICLE X SUBORDINATION OF SECURITIES

SECTION 10.01   SECURITIES SUBORDINATE TO WORKING CAPITAL FACILITY INDEBTEDNESS.


To the extent and in the manner hereinafter set forth in this Article X, the
payment of principal of, premium, if any, and interest on and all other payments
in respect of the Securities of any series issued under this Indenture shall be
subordinate and subject in right of payment to the prior payment in full of all
Indebtedness with respect to any Working Capital Facility, including (without
limitation) all principal thereof and all premium, if any, and interest thereon.

SECTION 10.02     PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.


                  In the event of (a) any insolvency or bankruptcy case or
proceeding or other similar case or proceeding under any Federal or state
bankruptcy or similar law, or any receivership, liquidation, arrangement,
relief, reorganization or other similar case or proceeding in connection
therewith, relative to the Company or to its assets, or (b) any liquidation,
dissolution, reorganization, compromise, arrangement, adjustment, protection,
composition, relief or other winding up of the Company or its debts, whether
voluntary or involuntary and whether or not involving any insolvency or
bankruptcy or any case or proceeding of any kind, or (c) any assignment for the
benefit of creditors or any other marshaling of assets and liabilities of the
Company, then, and in each such event, the holders of Indebtedness under any
Working Capital Facility shall be entitled to receive payment in full of all
amounts due or to become due on or in respect of all Indebtedness under any
Working Capital Facility, before the Company may make, and before any Holder of
Securities is entitled to receive or retain, any payment or distribution of any
kind or character (whether in cash, property or securities) on account of
Securities, and to that end the Holders of Securities agree to promptly pay
over, or cause to be paid over, to the holders of Indebtedness under any Working
Capital Facility (pro rata to each such holder on the basis of the respective
amounts of such Indebtedness held by such holder) any payment or distribution of
any kind or character, whether in cash, property or securities, received from
the Company to the extent necessary to pay or prepay in full the Indebtedness
under any and all Working Capital Facilities.

SECTION 10.03     PAYMENT PERMITTED.

                  Nothing contained in this Article X or elsewhere in this
Indenture, any indenture supplemental hereto or in any Securities issued
hereunder shall prevent the Company at any time, except as expressly provided in
Section 10.02, from making payments of principal of or premium, if any, or
interest on Securities of any series in accordance with the terms thereof.

SECTION 10.04 SUBROGATION TO RIGHTS OF HOLDERS OF WORKING CAPITAL FACILITY
              INDEBTEDNESS.


                  Holders of Securities of each series hereunder shall be
subrogated equally and ratably to the rights of the holders of Indebtedness
under any Working Capital Facility at the time outstanding to receive payments
and distributions of cash, property and securities applicable to the
Indebtedness under any Working Capital Facility; provided, however, that no
payment or distribution to any holder or owner of Indebtedness under any Working
Capital Facility pursuant to this Article X shall entitle any Holder of
Securities to exercise any rights of subrogation in respect thereof until all
Indebtedness under any Working Capital Facility shall have been paid in full.
For purposes of such subrogation, no payments or distributions to the holders of
Indebtedness under any Working Capital Facility of any cash, property or
securities to which the Holders of Securities would be entitled except for the
provisions of this Article X, shall, as among the Company, its creditors other
than holders of Indebtedness under any Working Capital Facility and the holders
of Indebtedness under any Working Capital Facility, be deemed to be a payment or
distribution by the Company to or on account of Indebtedness existing under any
Working Capital Facility.

SECTION 10.05     PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.

                  The provisions of this Article X are and are intended solely
for the purpose of defining the relative rights of the Holders of Securities on
the one hand and the holders of Indebtedness under any Working Capital Facility
on the other hand. Nothing contained in this Article X or elsewhere in this
Indenture, any indenture supplemental hereto or in the Securities issued
hereunder is intended to or shall (a) impair, as among the Company, its
creditors (other than holders of Indebtedness under any Working Capital
Facility) and the Holders of Securities, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders of Securities the principal
of, premium, if any, and interest on, and all other amounts payable with respect
to, the Securities as and when the same shall become due and payable in
accordance with their respective terms, (b) affect the relative rights against
the Company of the Holders of Securities and creditors of the Company (other
than the holders of Indebtedness under any Working Capital Faciltiy), (c)
prevent the Holder of any Securities from exercising all remedies otherwise
permitted by applicable law upon a Default or Event of Default under this
Indenture, subject to the rights under the provisions of Section 10.02 hereof of
the holders of Indebtedness under any Working Capital Facility to receive cash,
property or securities otherwise payable or deliverable to the Holders of
Securities or (d) restrict or otherwise impair the right of the Holders of
Securities to, in accordance with the terms of this Indenture, declare the
Securities of any series to be due and payable prior to their respective stated
maturity upon the occurrence of an Event of Default.

SECTION 10.06     AGREEMENT TO EFFECTUATE SUBORDINATION.

                  (a) Each Holder of Securities by its acceptance thereof agrees
to take such action as may be reasonably necessary or appropriate to effectuate,
as between the holders of Indebtedness under any Working Capital Facility and
such Holder of Securities, the subordination provided in this Article X.

                  (b) The provisions of this Article X (including, without
limitation, this Section 10.06) may not be amended, modified or waived without
the prior written consent of all the holders of Indebtedness under any and all
Working Capital Facilities that is at the time outstanding. The provisions set
forth in Article X constitute a continuing agreement and shall (i) be and remain
in full force and effect at any time, and from time to time, during which any
Indebtedness under any Working Capital Facility shall remain outstanding, (ii)
be binding upon the Holders of Securities and the Company and its successors,
transferees and assigns, and (iii) inure to the benefit of, and be enforceable,
in accordance with the terms hereof, directly by, each of the holders of the
Indebtedness under any Working Capital Facility and their respective successors,
transferees and assigns, against the Holders of Securities and the Company and
their successors, transferees and assigns.

                       ARTICLE XI. CONCERNING THE TRUSTEE

SECTION 11.01.      CERTAIN DUTIES AND RESPONSIBILITIES

                  The duties and responsibilities of the Trustee will be as
provided herein and by the Trust Indenture Act and will be performed in
accordance with Section 315(c) of the Trust Indenture Act. Notwithstanding the
foregoing, no provision of this Indenture will require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee will be subject to the provisions of this
Section 11.01.

SECTION 11.02.      CERTAIN RIGHTS OF TRUSTEE

                  Subject to the provisions of Section 11.01: (a) the Trustee
may conclusively rely and will be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness, 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 or direction of the Company mentioned herein will be sufficiently
evidenced by a Company Request or Company Order and any resolution of the Board
will be sufficiently evidenced by a Board Resolution; (c) whenever in the
administration of this Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering, or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an Officer's
Certificate; (d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel will be full and complete
authorization and protection in respect of any action taken, suffered, or
omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee
will be under no obligation to exercise any of the rights or powers vested in it
by this Indenture at the request or direction of any of the Holders pursuant to
this Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses, and liabilities which might
be incurred by it in compliance with such request or direction; (f) the Trustee
will not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it will be entitled to examine the books, records, and premises
of the Company, personally or by agent or attorney; (g) the Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee will not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder; (h) the Trustee will not be
liable for any action taken, suffered, or omitted to be taken by it in good
faith and reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture, unless it shall be proved
that the Trustee acted, or failed to act, in a negligent manner; and (i) the
Trustee will not be deemed to have notice of any Default or Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event or circumstance which is in fact such a
Default or Event of Default is received by the Trustee at the Corporate Trust
Office of the Trustee, and such notice references the Securities (or the
applicable series thereof) and this Indenture.

SECTION 11.03.      NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES

                  The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, may be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture, the Securities, the Company
Collateral, the Subsidiaries Collateral or any steps taken by the Company or any
of its Subsidiaries (except MFN Insurance Company), as the case may be, to
perfect and continue perfected the Trustee's interest in the Company Collateral
or the Subsidiaries Collateral, as the case may be. The Trustee or any
Authenticating Agent will not be accountable for the use or application by the
Company of Securities or the proceeds thereof.

SECTION 11.04.      MAY HOLD SECURITIES

                  The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar, or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 11.07 and 11.12, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar, or such other agent.

SECTION 11.05.      MONEY HELD IN TRUST

                  Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required herein or by law. The
Trustee will be under no liability for interest on any money received by it
hereunder except as otherwise agreed in writing with the Company.

SECTION 11.06.      COMPENSATION AND REIMBURSEMENT

                  (a) The Company will (i) pay to the Trustee from time to time
such compensation as shall be agreed to in writing between the Company and the
Trustee for all services rendered by it hereunder (which compensation will not
be limited to any provision of law in regard to the compensation of a trustee of
an express trust); (ii) except as otherwise expressly provided herein, reimburse
the Trustee upon its request for all reasonable expenses, disbursements, and
advances incurred or made by the Trustee in accordance with provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of agents and counsel), except any such expense, disbursement, or
advance as may be attributable to its negligence or bad faith; and (iii)
indemnify the Trustee and any predecessor Trustee for, and hold them harmless
against, any and all losses, liabilities, damages, claims and expenses,
including taxes (other than taxes based on the income of the Trustee or
predecessor Trustee and other taxes relating to the Trustee's or predecessor
Trustee's overall business and operations) incurred without negligence or bad
faith on its part arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.

                  (b) The Trustee will have a lien prior to the Securities as to
all property and funds held by it hereunder for any amount owed to it or any
predecessor Trustee pursuant to this Section 11.06, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.

                  (c) When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 9.01(a)(vii) or Section
9.01(a)(viii), such expenses (including the reasonable fees and expenses of its
counsel) and the Trustee's compensation for such services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency, or other similar law.

                  (d) The provisions of this Section 11.06 will survive the
termination of this Indenture.

SECTION 11.07.      DISQUALIFICATION; CONFLICTING INTERESTS

                  If the Trustee has or acquires a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee will either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and Sections 11.09 and 11.10 of this
Indenture.

SECTION 11.08.      CORPORATE TRUSTEE REQUIRED ELIGIBILITY

                  There will at all times be one or more Trustees hereunder with
respect to the Securities of each series, at least one of which will be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $100,000,000 and its Corporate Trust
Office or principal office in New York City, or any other major city in the
United States that is acceptable to the Company. If such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of a supervising or examining state or federal authority, then for the purposes
of this Section 11.08, the combined capital and surplus of such Person 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 the Trustee shall cease to be
eligible in accordance with the provisions of this Section 11.08 or the terms of
the Trust Indenture Act, it will resign immediately in the manner and with the
effect hereinafter specified in this Article XI.

SECTION 11.09.      RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR

                  (a) Unless otherwise required required under the Trust
Indenture Act, no resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article XI will become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 11.10.

                  (b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 11.10 shall not have been delivered to the Trustee within 30 calendar
days after the giving of such notice of resignation, the resigning Trustee may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

                  (c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 11.10 shall not have been delivered to the Trustee within 30 calendar
days after the giving of such notice of removal, the Trustee being removed may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

                  (d) If, at any time, (i) the Trustee fails to comply with
Section 11.07 after written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Security for at least six months, (ii) the
Trustee ceases to be eligible under Section 11.08 and fails to resign after
written request therefor by the Company or by any such Holder, or (iii) the
Trustee becomes incapable of acting or is adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property is appointed or any public officer
takes 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,
(A) the Company by a Board Resolution may remove the Trustee with respect to all
Securities or (B) subject to Section 9.07, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.

                  (e) If the Trustee resigns, is removed, or becomes incapable
of acting, or if a vacancy occurs in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company by a Board
Resolution will promptly appoint a successor Trustee or Trustees with respect to
the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there will be only one Trustee with
respect to the Securities of any particular series) and will comply with the
applicable requirements of Section 11.10. If, within one year after such
resignation, removal, or incapability or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series is appointed by
Act of the Holders of a majority in principal amount of the Outstanding
Securities of such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed will, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 11.10,
become the successor Trustee with respect to the Securities of such series and
to that extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 11.10, any Holder who has been a bona fide Holder of
a Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

                  (f) The Company will give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to all holders of Securities of such series in the manner provided in Section
15.03. Each notice will include the name of the successor Trustee with respect
to the Securities of such series and the address of its Corporate Trust Office.

SECTION 11.10.      ACCEPTANCE OF APPOINTMENT BY SUCCESSOR

                  (a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee so
appointed will execute, acknowledge, and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee will become effective and such
successor Trustee, without any further act, deed, or conveyance, will become
vested with all the rights, powers, trusts, and duties of the retiring Trustee,
but, on the request of the Company or the successor Trustee, such retiring
Trustee will, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers, and duties of the
retiring Trustee and will duly assign, transfer, and deliver to such Trustee all
property and money held by such retiring Trustee hereunder.

                  (b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee, and each successor Trustee with respect to the
Securities of one or more series will execute and deliver an indenture
supplemental hereto wherein such successor Trustee will accept such appointment
and which (i) will contain such provisions as may be necessary or desirable to
transfer and confirm to, and to vest in, each successor Trustee all the rights,
powers, trusts, and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (ii) if the retiring Trustee is not retiring with respect to
all Securities, will contain such provisions as may be deemed necessary or
desirable to confirm that all the rights, powers, trusts, and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring will continue to be vested in the
retiring Trustee, and (iii) will add to or change any of the provisions of this
Indenture as may be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture will constitute such Trustees
co-trustees of the same trust and that each such Trustee will be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustees and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
will become effective to the extent provided therein and each such successor
Trustee, without any further act, deed, or conveyance, will become vested with
all the rights, powers, trusts, and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but on request of the Company or any successor
Trustee, such retiring Trustee will duly assign, transfer, and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.

                  (c) Upon request of any such successor Trustee, the Company
will execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all applicable rights, powers, and trusts
referred to in the preceding paragraphs of this Section 11.10.

                  (d) No successor Trustee will accept its appointment unless at
the time of such acceptance such successor Trustee is qualified and eligible
under this Article XI.

SECTION 11.11. MERGER, CONVERSION, CONSOLIDATION, OR SUCCESSION TO BUSINESS

                  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 may be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, will be the successor of the Trustee hereunder,
provided such corporation is otherwise qualified and eligible under this Article
XI, without the execution or filing of any paper or any further act on the part
of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion, or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.

SECTION 11.12.      PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY

                  If and when the Trustee is or becomes a creditor, directly or
indirectly, secured or unsecured, of the Company (or any other obligor upon the
Securities) within the meaning of the Trust Indenture Act, the Trustee will
comply with the relevant provisions of the Trust Indenture Act regarding the
collection of claims against the Company (or any such other obligor).

SECTION 11.13.      APPOINTMENT OF AUTHENTICATING AGENT

                  (a) The Trustee may appoint an Authenticating Agent or Agents
with respect to one or more series of Securities which will be authorized to act
on behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer, or partial
redemption thereof or pursuant to Section 2.07, and Securities so authenticated
will be entitled to the benefits of this Indenture and will be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference will be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any state thereof, or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by federal or state authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section 11.13,
the combined capital and surplus of such Authenticating Agent will 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 11.13, such
Authenticating Agent will resign immediately in the manner and with the effect
specified in this Section 11.13.

                  (b) Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion, or consolidation to which such
Authenticating Agent may be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, will
continue to be an Authenticating Agent, provided such corporation is otherwise
eligible under this Section 11.13, without the execution or filing of any paper
or any further act on the part of the Trustee or the Authenticating Agent.

                  (c) An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof 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 such
Authenticating Agent shall cease to be eligible in accordance with the
provisions this Section 11.13, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and will mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
will become vested with all the rights, powers, and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent will be appointed unless eligible under the
provisions of this Section 11.13.

                  (d) The Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under this Section
11.13, and the Trustee will be entitled to be reimbursed for such payments,
subject to the provisions of Section 11.06.

                  (e) If an appointment with respect to one or more series of
Securities is made pursuant to this Section 11.13, the Securities of such series
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative form of certificate of authentication in the
following form:

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.



                                           as Trustee



                                       By:
                                           As Authenticating Agent


                                       By:
                                           Authorized Signatory


            ARTICLE XII. SUPPLEMENTAL INDENTURES AND CERTAIN ACTIONS

SECTION 12.01. PURPOSES FOR WHICH SUPPLEMENTAL INDENTURES MAY BE ENTERED INTO
               WITHOUT CONSENT OF HOLDERS

                  Without the consent of or notice to any Holders, the Company,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

                  (a) to evidence the succession of another Person to the
         Company and the assumption by any such successor of the covenants of
         the Company herein and in the Securities, all to the extent otherwise
         permitted hereunder;

                  (b) to make any change to the provisions of this Indenture
         that would provide any additional rights or benefits to the Holders of
         the Securities;

                  (c) to add to or change any of the provisions of this
         Indenture to such extent as may be necessary to permit or facilitate
         the issuance of Securities in bearer form, registrable or not
         registrable as to principal, and with or without interest coupons, or
         to permit or facilitate the issuance of Securities in uncertificated
         form;

                  (d) to add to, change, or eliminate any of the provisions of
         this Indenture in respect of one or more series of Securities, provided
         that any such addition, change, or elimination (i) will neither (A)
         apply to any Security of any series created prior to the execution of
         such supplemental indenture and entitled to the benefit of such
         provision nor (B) modify the rights of the Holder of any such Security
         with respect to such provision or (ii) will become effective only when
         there is no such Security Outstanding;

                  (e) to establish the form or terms of Securities of any series
         as permitted by Sections 2.01 and 2.02;

                  (f) to evidence and provide for the acceptance of appointment
         hereunder by a successor Trustee with respect to the Securities of one
         or more series and to add to or change any of the provisions of this
         Indenture as may be necessary to provide for or facilitate the
         administration of the trusts hereunder by more than one Trustee,
         pursuant to the requirements of Section 11.10; or

                  (g) to cure any ambiguity, to correct or supplement any
         provision herein which may be defective or inconsistent with any other
         provision herein, or to make any other provisions with respect to
         matters or questions arising under this Indenture, provided that such
         action pursuant to this clause (g) will not adversely affect the
         interests of the Holders of Securities of any series in any material
         respect.

SECTION 12.02. MODIFICATION OF INDENTURE WITH CONSENT OF HOLDERS OF AT LEAST A 
               MAJORITY IN PRINCIPAL AMOUNT OF OUTSTANDING SECURITIES

                  (a) With the consent of the Holders of a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
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 modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture will, without the consent of the Holder of
each Outstanding Security affected thereby:

                  (i) change the Stated Maturity of the principal of, or any
         installment of principal of or interest on, any Security, or reduce the
         principal amount thereof or the rate of interest thereon or any premium
         payable upon the redemption thereof, or reduce the amount of the
         principal of an Original Issue Discount Security that would be due and
         payable upon a declaration of acceleration of the Maturity thereof
         pursuant to Sections 9.01(b), or change any Place of Payment where, or
         the coin or currency in which, any Security or any premium or interest
         thereon is payable, or impair the right to institute suit for the
         enforcement of any such payment on or after the Stated Maturity thereof
         (or, in the case of redemption, on or after the Redemption Date);

                  (ii) reduce the percentage in principal amount of the
         Outstanding Securities of any series, the consent of the Holders of
         which is required for any such supplemental indenture, or the consent
         of the Holders of which is required for any waiver (of compliance with
         certain provisions of this Indenture or certain defaults hereunder and
         their consequences) provided for in this Indenture; or

                  (iii) modify any of the provisions of this Section 12.02,
         Section 9.01(d) or Section 7.08, except to increase the percentage in
         principal amount of Holders required under any such Section or to
         provide that certain other provisions of this Indenture cannot be
         modified or waived without the consent of the Holder of each
         Outstanding Security affected thereby, provided, however, that this
         clause (c) will not be deemed to require the consent of any Holder with
         respect to changes in the references to "the Trustee" and concomitant
         changes in this Section 12.02 and Section 7.08, or the deletion of this
         proviso, in accordance with the requirements of Sections 11.10 and
         12.01(f).

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

                  (c) It will not be necessary for any Act of Holders under this
Section 12.02 to approve the particular form of any proposed supplemental
indenture, but it will be sufficient if such Act approves the substance thereof.

SECTION 12.03.      EXECUTION OF SUPPLEMENTAL INDENTURES

                  In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article XII or the modifications
thereby of the trusts created by this Indenture, the Trustee will be entitled to
receive, and (subject to Section 11.01) will be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but will not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, or immunities under this Indenture or otherwise.

SECTION 12.04.      EFFECT OF SUPPLEMENTAL INDENTURES

                  Upon the execution of any supplemental indenture under this
Article XII, this Indenture will be modified in accordance therewith, and such
supplemental indenture will form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder will be bound thereby.

SECTION 12.05.      CONFORMITY WITH TRUST INDENTURE ACT

                  Every supplemental indenture executed pursuant to this Article
XII will conform to the requirements of the Trust Indenture Act.

SECTION 12.06.      REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES

                  Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article XII may, and
will if required by the Trustee, bear a notation in form approved by the Trustee
as to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as to conform, in
the opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series.

             ARTICLE XIII. CONSOLIDATION, MERGER, SALE, OR TRANSFER

SECTION 13.01. CONSOLIDATIONS AND MERGERS OF COMPANY AND SALES PERMITTED ONLY ON
               CERTAIN TERMS

                  (a) The Company shall not consolidate with or merge with or
into any other Person, or transfer (by lease, assignment, sale, or otherwise)
its properties and assets substantially as an entirety to another Person unless
(i) either (A) the Company shall be the continuing or surviving Person in such a
consolidation or merger or (B) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or to which the
properties and assets of the Company are transferred substantially as an
entirety (the Company or such other Person being referred to as the "Surviving
Person") shall be a corporation organized and validly existing under the laws of
the United States, any state thereof, or the District of Columbia, and shall
expressly assume, by an indenture supplement, all the obligations of the Company
under the Securities and the Indenture, (ii) immediately after the transaction
and the incurrence or anticipated incurrence of any Indebtedness to be incurred
in connection therewith, no Default will exist, and (iii) an Officer's
Certificate has been delivered to the Trustee to the effect that the conditions
set forth in the preceding clauses (i) and (ii) have been satisfied and an
Opinion of Counsel (from a counsel who shall not be an employee of the Company)
has been delivered to the Trustee to the effect that the conditions set forth in
the preceding clause (i) have been satisfied.

                  (b) The Surviving Person will succeed to and be substituted
for the Company with the same effect as if it had been named herein as a party
hereto, and thereafter the predecessor corporation (if it is not the Surviving
Person) will be relieved of all obligations and covenants under this Indenture
and the Securities.

              ARTICLE XIV. SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 14.01.      SATISFACTION AND DISCHARGE OF INDENTURE

                  This Indenture will upon a Company Request cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense the Company, will execute proper instruments acknowledging satisfaction
and discharge of this Indenture, when: (a) either (i) all Securities theretofore
authenticated and delivered (other than (A) Securities which have been
destroyed, lost, or stolen and which have been replaced or paid as provided in
Section 2.07 and (B) Securities for the payment of which money has theretofore
been deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as provided in
Section 7.03) have been delivered to the Trustee for cancellation or (ii) all
such Securities not theretofore delivered to the Trustee for cancellation (A)
have become due and payable, (B) will become due and payable at their Stated
Maturity within one year, or (C) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company, and
the Company, in the case of clause (A), (B), or (C) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for such purpose
an amount sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be; (b) the Company has paid or caused to be
paid all other sums payable hereunder by the Company; and (c) the Company has
delivered to the Trustee an Officer's 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 satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 11.06, the obligations
of the Company to any Authenticating Agent under Section 11.13, and, if money
shall have been deposited with the Trustee pursuant to subclause (ii) of clause
(a) of this Section 14.01, the obligations of the Trustee under Sections 7.03(e)
and 14.02, will survive.

SECTION 14.02.      APPLICATION OF TRUST MONEY

                  Subject to provisions of Section 7.03(e), all money deposited
with the Trustee pursuant to Section 14.01 will be held in trust and applied by
it, in accordance with the provisions of the Securities and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal and any premium and interest for whose
payment such money has been deposited with the Trustee.

                      ARTICLE XV. MISCELLANEOUS PROVISIONS

SECTION 15.01.      SUCCESSORS AND ASSIGNS OF COMPANY BOUND BY INDENTURE

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

SECTION 15.02.      SERVICE OF REQUIRED NOTICE TO TRUSTEE AND COMPANY

                  Any request, demand, authorization, direction, notice,
consent, waiver, Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with (a) the Trustee
by any Holder or by the Company will be sufficient for every purpose hereunder
if made, given, furnished, or filed in a writing received by the Trustee at its
Corporate Trust Office (addressed to the attention of: Corporate Trust Trustee
Administration) or (b) the Company by the Trustee or by any Holder will be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished, or filed in a writing received by the
Company at its principal executive offices (addressed to the attention of both
its Chief Financial Officer and its General Counsel). All such notices and other
communications shall be effective (i) if delivered by hand or prepaid courier
service, when delivered, (ii) if sent by mail, upon the earlier of the date of
receipt or five Business Days after deposit in the mail, first class, postage
prepaid, (iii) if sent by telex, upon receipt by the sender of an appropriate
answerback and (iv) if sent by facsimile transmission, upon receipt of
electronic confirmation of receipt.

SECTION 15.03.      SERVICE OF REQUIRED NOTICE TO HOLDERS; WAIVER

                  Where this Indenture provides for notice to Holders of any
event, such notice will be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder will affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver will be the equivalent of such notice. Waivers of notice by Holders
will be filed with the Trustee, but such filing will not be a condition
precedent to the validity of any action taken in reliance upon such waiver. In
case by reason of the suspension of regular mail service or by reason of any
other cause it will be impracticable to give such notice by mail, then such
notification as may be made with the approval of the Trustee will constitute a
sufficient notification for every purpose hereunder.

SECTION 15.04. INDENTURE AND SECURITIES TO BE CONSTRUED IN ACCORDANCE WITH THE 
               LAWS OF THE STATE OF NEW YORK

                  This Indenture and the Securities will be deemed to be a
contract made under the laws of the State of New York, and for all purposes will
be construed in accordance with the laws of said State without giving effect to
principles of conflict of laws of such State.

SECTION 15.05.      COMPLIANCE CERTIFICATES AND OPINIONS

                  Upon any application or request by the Company to the Trustee
to take any action under any of the provisions of this Indenture, the Company
will furnish to the Trustee such certificates and opinions as may be required
under the Trust Indenture Act. Each such certificate or opinion will be given in
the form of an Officer's Certificate, if to be given by an officer of the
Company, or an Opinion of Counsel, if to be given by counsel, and will comply
with the requirements of the Trust Indenture Act and any other requirements set
forth in this Indenture.

SECTION 15.06.      FORM OF DOCUMENTS DELIVERED TO TRUSTEE

                  In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents. Where any
Person is required to make, give, or execute two or more applications, requests,
consents, certificates, statements, opinions, or other instruments under this
Indenture, they may, but need not, be consolidated and form one instrument.

SECTION 15.07.      PAYMENTS DUE ON NON-BUSINESS DAYS

                  In any case where any Interest Payment Date, Redemption Date,
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of the Securities of any series which
specifically states that such provision will apply in lieu of this Section
15.07)) payment of interest or principal (and premium, if any) need not be made
at such Place of Payment on such date, but may be made on the next succeeding
Business Day at such Place of Payment with the same force and effect as if made
on the Interest Payment Date or Redemption Date, or at the Stated Maturity, and
no interest shall accrue for the intervening period.

SECTION 15.08.      PROVISIONS REQUIRED BY TRUST INDENTURE ACT TO CONTROL

                  If any provision of this Indenture limits, qualifies, or
conflicts with the duties imposed on any Person by Sections 310 through 317 of
the Trust Indenture Act (including provisions automatically deemed included in
this Indenture pursuant to the Trust Indenture Act unless this Indenture
provides that such provisions are excluded), which are deemed to be a part of
and govern this Indenture, whether or not contained herein, then such imposed
duties will control.

SECTION 15.09.      INVALIDITY OF PARTICULAR PROVISIONS

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

SECTION 15.10.      INDENTURE MAY BE EXECUTED IN COUNTERPARTS

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

SECTION 15.11.      ACTS OF HOLDERS; RECORD DATES

                  (a) Any request, demand, authorization, direction, notice,
consent, waiver, or other action provided or permitted by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action will become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent will be sufficient for any
purpose of this Indenture and (subject to Section 11.01) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section
15.11.

                  (b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit will also constitute sufficient proof of
his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.

                  (c) The ownership of Securities will be proved by the Security
Register.

                  (d) Any request, demand, authorization, direction, notice,
consent, waiver, or other Act of the Holder of any Security will bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange thereof or in lieu thereof
in respect of anything done, omitted, or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.

                  (e) The Company may, in the circumstances permitted by the
Trust Indenture Act, set any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver,
or other action provided or permitted by this Indenture to be given or taken by
Holders of Securities of such series. With regard to any record date set
pursuant to this paragraph, the Holders of Outstanding Securities of the
relevant series on such record date (or their duly appointed agents), and only
such Persons, will be entitled to give or take the relevant action, whether or
not such Holders remain Holders after such record date. With regard to any
action that may be given or taken hereunder only by Holders of a requisite
principal amount of Outstanding Securities of any series (or their duly
appointed agents) and for which a record date is set pursuant to this paragraph,
the Company may, at its option, set an expiration date after which no such
action purported to be given or taken by any Holder will be effective hereunder
unless given or taken on or prior to such expiration date by Holders of the
requisite principal amount of Outstanding Securities of such series on such
record date (or their duly appointed agents). On or prior to any expiration date
set pursuant to this paragraph, the Company may, on one or more occasions at its
option, extend such date to any later date. Nothing in this paragraph will
prevent any Holder (or any duly appointed agent thereof) from giving or taking,
after any such expiration date, any action identical to, or, at any time,
contrary to or different from, the action or purported action to which such
expiration date relates, in which event the Company may set a record date in
respect thereof pursuant to this paragraph. Nothing in this Section 15.11(e)
will be construed to render ineffective any action taken at any time by the
Holders (or their duly appointed agents) of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is so
taken. Notwithstanding the foregoing or the Trust Indenture Act, the Company
will not set a record date for, and the provisions of this Section 15.11(e) will
not apply with respect to, any notice, declaration, or direction referred to in
the next paragraph.

                  (f) Upon receipt by the Trustee from any Holder of Securities
of a particular series of (a) any notice of default or breach referred to in
Section 9.01(a)(iv) or 9.01(a)(v) with respect to Securities of such series, if
such default or breach has occurred and is continuing and the Trustee shall not
have given such notice to the Company, (b) any declaration of acceleration
referred to in Section 9.01(b), if an Event of Default with respect to
Securities of such series has occurred and is continuing and the Trustee shall
not have given such a declaration to the Company, or (c) any direction referred
to in Section 9.06 with respect to Securities of such series, if the Trustee
shall not have taken the action specified in such direction, then a record date
will automatically and without any action by the Company or the Trustee be set
for determining the Holders of Outstanding Securities of such series entitled to
join in such notice, declaration, or direction, which record date will be the
close of business on the tenth calendar day following the day on which the
Trustee receives such notice, declaration, or direction. Promptly after such
receipt by the Trustee, and in any case not later than the fifth calendar day
thereafter, the Trustee will notify the Company and the Holders of Outstanding
Securities of such series of any such record date so fixed. The Holders of
Outstanding Securities of such series on such record date (or their duly
appointed agents), and only such Persons, will be entitled to join in such
notice, declaration, or direction, whether or not such Holders remain Holders
after such record date; provided that, unless such notice, declaration, or
direction shall have become effective by virtue of Holders of the requisite
principal amount of Outstanding Securities of such series on such record date
(or their duly appointed agents) having joined therein on or prior to the 90th
calendar day after such record date, such notice, declaration, or direction will
automatically and without any action by any Person be canceled and of no further
effect. Nothing in this Section 15.11(f) will be construed to prevent a Holder
(or a duly appointed agent thereof) from giving, before or after the expiration
of such 90-day period, a notice, declaration, or direction contrary to or
different from, or, after the expiration of such period, identical to, the
notice, declaration, or direction to which such record date relates, in which
event a new record date in respect thereof will be set pursuant to this Section
15.11(f). Nothing in this Section 15.11(f) will be construed to render
ineffective any notice, declaration, or direction of the type referred to in
this Section 15.11(f) given at any time to the Trustee and the Company by
Holders (or their duly appointed agents) of the requisite principal amount of
Outstanding Securities of the relevant series on the date such notice,
declaration, or direction is so given.

                  (g) Without limiting the foregoing, a Holder entitled
hereunder to give or take any action hereunder with regard to any particular
Security may do so with regard to all or any part of the principal amount of
such Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any different part of such
principal amount.

SECTION 15.12.      EFFECT OF HEADINGS AND TABLE OF CONTENTS

                  The Article and Section headings herein and the Table of
Contents are for convenience only and will not affect the construction hereof.

SECTION 15.13.      BENEFITS OF INDENTURE

                  Nothing in this Indenture or in the Securities, express or
implied, will give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy, or claim under this Indenture.

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




<PAGE>


                  IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.

[Seal]                               MFN FINANCIAL CORPORATION


                                     By:
                                     Name:
                                     Title:



                                     NORWEST BANK MINNESOTA,
                                     NATIONAL ASSOCIATION, AS
                                     TRUSTEE

                                     By:
                                     Name:
                                     Title:


                                                                    Exhibit 4(B)





                            MFN Financial Corporation

                                       and

                  Norwest Bank Minnesota, National Association,

                                     Trustee



                       FIRST SUPPLEMENTAL TRUST INDENTURE

                           Dated as of March 23, 1999

                           Supplementing that certain


                                    INDENTURE

                           Dated as of March 23, 1999



                    Authorizing the Issuance and Delivery of

                            Senior Secured Securities

  consisting of up to $440,000,000, less the aggregate principal amount of the
  Senior Secured Notes Due 2001, Series B Senior issued pursuant to the Second
       Supplemental Indenture to the Indenture, aggregate principal amount
                                       of

                   10% Senior Secured Notes Due 2001, Series A



<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

RECITALS......................................................................1
[Form of Face of Security]....................................................2
[Form of Reverse of Security].................................................4
ARTICLE I.  ISSUANCE OF SENIOR SECURED NOTES..................................7
         Section 1.1. Issuance of Senior Secured Notes; Principal Amount;
                      Maturity................................................7
         Section 1.2. Interest on the Senior Secured Notes; Payment of
                      Interest................................................8
ARTICLE II.  CERTAIN DEFINITIONS..............................................8
         Section 2.1. Certain Definitions.....................................8
ARTICLE III.  CERTAIN COVENANTS..............................................12
         Section 3.1. Indebtedness...........................................12
         Section 3.2. Liens..................................................12
         Section 3.3. Restricted Payments....................................13
         Section 3.4. Change of Control......................................13
         Section 3.5. Payment Restrictions Affecting Subsidiaries............15
         Section 3.6. Issuance of Subsidiary Preferred Stock.................15
         Section 3.7. Asset Sales............................................15
         Section 3.8. Transactions with Affiliates...........................16
         Section 3.9. Change in Business.....................................16
ARTICLE IV.  ADDITIONAL EVENTS OF DEFAULT....................................16
ARTICLE V.  REDEMPTION OF SECURITIES.........................................16
         Section 5.1. Right of Redemption....................................16
         Section 5.2. Repurchase.............................................16
ARTICLE VI.  MISCELLANEOUS...................................................16
         Section 6.1. Reference to and Effect on the Indenture...............16
         Section 6.2. Waiver of Certain Covenants............................17
         Section 6.3. Supplemental Indenture May be Executed in Counterparts.17

<PAGE>

         FIRST SUPPLEMENTAL INDENTURE, dated as of March 23, 1999 (this "First
Supplemental Indenture"), between MFN Financial Corporation, a corporation duly
organized and existing under the laws of the State of Delaware (the "Company"),
and Norwest Bank Minnesota, National Association, a U.S. national banking
association, as Trustee (the "Trustee"), supplementing that certain Indenture,
dated as of March 23, 1999, between the Company and the Trustee (the
"Indenture").

                                    RECITALS

         A. The Company has duly authorized the execution and delivery of the
Indenture to provide for the issuance from time to time of its senior secured
notes (the "Securities") to be issued in one or more series as provided for in
the Indenture.

         B. The Indenture provides that the Securities of each series shall be
in such form as may be established by or pursuant to a Board Resolution or in
one or more indentures supplemental thereto, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or as
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution thereof.

         C. The Company and the Trustee have agreed that the Company shall issue
and deliver, and the Trustee shall authenticate, Securities denominated "10%
Senior Secured Notes Due 2001, Series A" (the "Senior Secured Notes") pursuant
to the terms of this First Supplemental Indenture and substantially in the form
set forth below, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by the Indenture
and this First Supplemental Indenture, and with such letters, numbers, or other
marks of identification and such legends or endorsements placed thereon as may
be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Senior
Secured Notes, as evidenced by their execution thereof.



<PAGE>



                           [Form of Face of Security]

                            MFN FINANCIAL CORPORATION

                   10% SENIOR SECURED NOTE DUE 2001, SERIES A

No.  R-__________                                                      $0.00
                                                                       CUSIP No.

         MFN FINANCIAL CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter called the "Company," which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to the Trustee, or registered
assigns, the principal sum of $0.00 on March 23, 2001, subject to earlier
redemption or repurchase as described below, and to pay interest thereon from
March 23, 1999, or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, at the rate of 10% per annum, payable
quarterly on March 23rd, June 23rd, September 23rd and December 23rd of each
year, commencing on June 23rd, 1999, until the principal hereof is paid or made
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date shall, as provided in said Indenture,
be computed on the basis of a 360-day year consisting of twelve 30-day months
and paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the 30th day (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 calendar days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in said Indenture.

         Payment of the principal of and any such interest on this Security
shall be made at the office or agency of the Company maintained for such purpose
in New York, New York, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest
may be made by check mailed to the address of the Person entitled thereto as
such address appears in the Security Register.

         REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS SET FORTH ON THE
REVERSE HEREOF. SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
THOUGH FULLY SET FORTH IN THIS PLACE.

         This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication herein has been signed manually by the
Trustee under said Indenture.

                  This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than the
Depositary or a nominee thereof, and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, this Security will be a Global Security subject to the
foregoing, except in such limited circumstances.

         IN WITNESS WHEREOF, this instrument has been duly executed in
accordance with the Indenture.

                                       MFN FINANCIAL CORPORATION

                                       By:
                                       Name:
Attest:                                Title:

By:




<PAGE>



                          [Form of Reverse of Security]

                            MFN FINANCIAL CORPORATION


         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities") issued and to be issued in one or more
series under an Indenture, dated as of March 23, 1999 (herein called the
"Indenture"), between the Company and Norwest Bank Minnesota, National
Association, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof, limited in aggregate principal
amount to $440,000,000 less the aggregate principal amount of the Series B
Senior Secured Notes.

         On the terms and subject to the conditions set forth in the Company
Security Documents, the payment and performance of the obligations of the
Company under the Securities issued under this Indenture, including this
Security, are secured by the Company Collateral and have the benefit of the
Subsidiaries Guaranty Agreement executed by each Subsidiary (except MFN
Insurance Company) of the Company. Payment and performance of the obligations of
the Subsidiaries (except MFN Insurance Company) under the Subsidiaries Guaranty
Agreement are secured by the Subsidiaries Collateral. The Company Collateral and
the Subsidiaries Collateral has been pledged to the Trustee on the terms and
subject to the conditions set forth in the Collateral Security Documents for the
equal and ratable benefit of the Holders of Securities issued under the
Indenture. As set forth in the Indenture, the Company Pledge Agreement, the
Company Security Agreement, the Subsidiaries Guaranty Agreement and the
Subsidiaries Security Agreement, to the extent the Company or a Subsidiary of
the Company enters into a Working Capital Facility, the rights of any party
lending money to the Company or a Subsidiary of the Company pursuant to such
Working Capital Facility with respect to certain assets comprising a portion of
the Company Collateral or the Subsidiaries Collateral will be senior to those
rights of the Holders of Securities issued under the Indenture.

         No sinking fund is provided for the Securities. The Securities are
subject to redemption at the option of the Company, at any time and from time to
time, in whole or in part, in increments of not less than $5.0 million, upon not
more than 60 nor less than 30 days' notice to the Holders prior to the
Redemption Date, at the principal amount thereof, plus accrued and unpaid
interest thereon to the date of redemption.

         If less than all of the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed will be selected by such method as
the Trustee may deem fair and appropriate. In the event of the redemption of
this Security in part only, a new Security or Securities of this series and of
like tenor for the portion hereof not so redeemed shall be issued in the name of
the Holder hereof upon the cancellation hereof.

         Upon the occurrence of a Change of Control, the Company is required to
repurchase the Securities, at the option of the Holders thereof, at a purchase
price equal to 101% of the outstanding principal amount thereof, plus accrued
and unpaid interest thereon to the Repurchase Date, but interest installments
with a Stated Maturity on or prior to such Repurchase Date shall be payable to
the Holders of such Securities of record at the close of business on the
relevant Regular Record Dates referred to on the face hereof all as provided in
the Indenture. In the event of the repurchase of this Security in part only, a
new Security or Securities of this series of like tenor for the portion hereof
not so repurchased shall be issued in the name of the Holder hereof upon the
cancellation hereof.

         If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

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

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder unless (a) such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Securities of this series, (b) the Holders of not less than 25% in
principal amount of the Securities of this series at the time Outstanding shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity,
(c) the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request and (d) the Trustee shall have failed
to institute such proceeding for 60 calendar days after receipt of such notice,
request, and offer of indemnity. However, the foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or interest hereon on or after the respective due
dates therefor expressed herein.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium or
interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.

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

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and interest
on this Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
shall be issued to the designated transferee or transferees.

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

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

         All terms used in this Security that are defined in the Indenture shall
have the respective meanings assigned to them in the Indenture. This Security,
the Indenture and the Collateral Security Documents shall be construed in
accordance with the laws of the State of New York without giving effect to
principles of conflict of laws of such State.

         Unless this Certificate is presented by an authorized representative of
the Depository Trust Company, a New York corporation ("DTC"), to Issuer or to
Agent for registration of transfer, exchange or payment, and any Certificate
issued is registered in the name of CEDE & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
CEDE & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, CEDE & Co., has an interest herein.

         D. The Trustee's certificate of authentication shall be in
substantially the following form:


                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

Dated:                        Norwest Bank Minnesota, National Association, as
                              Trustee


                              By:
                                             Authorized Signatory

         E. All acts and things necessary to make the Senior Secured Notes, when
the Senior Secured Notes have been executed by the Company and authenticated by
the Trustee and delivered as provided in the Indenture and this First
Supplemental Indenture, the valid, binding and legal obligations of the Company
and to constitute these presents a valid indenture and agreement according to
its terms, have been done and performed, and the execution and delivery by the
Company of the Indenture and this First Supplemental Indenture and the issue
hereunder of the Senior Secured Notes have in all respects been duly authorized;
and the Company, in the exercise of the legal right and power in it vested, has
executed and delivered the Indenture and is executing and delivering this First
Supplemental Indenture and proposes to make, execute, issue and deliver the
Senior Secured Notes.

         NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:

         In order to declare the terms and conditions upon which the Senior
Secured Notes are authenticated, issued, and delivered, and in consideration of
the premises and of the purchase and acceptance of the Senior Secured Notes by
the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of the respective Holders from time to time of the Senior Secured Notes,
as follows:

                  ARTICLE I. ISSUANCE OF SENIOR SECURED NOTES.

Section 1.1.      Issuance of Senior Secured Notes; Principal Amount; Maturity.

         (a) On March 23, 1999, the Company shall issue and deliver to the
Trustee, and the Trustee shall authenticate, Senior Secured Notes substantially
in the form set forth above, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
the Indenture and this First Supplemental Indenture, and with such letters,
numbers, or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Senior Secured Notes, as evidenced by their execution thereof.

         (b) The Senior Secured Notes shall be issued in the aggregate principal
amount of up to $440,000,000.00 less the aggregate principal amount of the
Series B Senior Secured Notes and shall mature on March 23, 2001.

Section 1.2.      Interest on the Senior Secured Notes; Payment of Interest.

         (a) The Senior Secured Notes shall bear interest at the rate of 10% per
annum from March 23, 1999, or, if later, from the most recent Interest Payment
Date to which interest has been paid or duly provided for.

         (b) The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date shall, as provided in the Indenture, be paid to the
Person in whose name a Senior Secured Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the 30th day (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name the Senior Secured Note (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of the Senior Secured Notes not less than 10 calendar days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Senior Secured Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.

         (c) Payment of the principal of and any such interest on the Senior
Secured Notes shall be made at the office or agency of the Company maintained
for such purpose in New York, New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address appears in the Security Register.

                        ARTICLE II. CERTAIN DEFINITIONS.

Section 2.1.      Certain Definitions.

         The terms defined in this Section 2.1 (except as herein otherwise
expressly provided or unless the context of this First Supplemental Indenture
otherwise requires) for all purposes of this First Supplemental Indenture and of
any indenture supplemental hereto have the respective meanings specified in this
Section 2.1. All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP. All other terms used in this First
Supplemental Indenture that are defined in the Indenture or the Trust Indenture
Act, either directly or by reference therein (except as herein otherwise
expressly provided or unless the context of this First Supplemental Indenture
otherwise requires), have the respective meanings assigned to such terms in the
Indenture or the Trust Indenture Act, as the case may be, as in force at the
date of this First Supplemental Indenture as originally executed.

         "Affiliate" has the meaning ascribed thereto in Section 3.8.

         "Asset Sale" means any sale or other disposition, or series of sales or
other dispositions (including, without limitation, by merger or consolidation
and whether by operation of law or otherwise) of assets by the Company or its
Subsidiaries to any Person except (i) sales of used, worn out or surplus
equipment in the ordinary course of business and (ii) sales, contributions or
transfers of Receivables pursuant to any Working Capital Facility. The
definition of Asset Sale shall include the receipt of funds from any federal or
state income tax refunds.

         "Cash Equivalent" means: (a) obligations issued or unconditionally
guaranteed as to principal and interest by the United States of America or by
any agency or authority controlled or supervised by and acting as an
instrumentality of the United States of America which are backed by the full
faith and credit of the United States of America; (b) obligations (including,
but not limited to, demand or time deposits, bankers' acceptances and
certificates of deposit) issued by a depository institution or trust company or
a wholly owned subsidiary or branch office of any depository institution or
trust company, provided that (i) such depository institution or trust company
has, at the time of the Company's or any of its Subsidiaries' investment therein
or contractual commitment providing for such investment, capital, surplus or
undivided profits (as of the date of such institution's most recently published
financial statements) in excess of $100 million and (ii) the commercial paper of
such depository institution or trust company, at the time of the Company's or
any of its Subsidiaries' investment therein or contractual commitment providing
for such investment, is rated at least A1 by S&P or P-1 by Moody's; (c) debt
obligations (including, but not limited to, commercial paper and medium-term
notes) issued or unconditionally guaranteed as to principal and interest by any
corporation, state or municipal government or agency or instrumentality thereof
or foreign sovereignty, if the commercial paper of such corporation, state or
municipal government or foreign sovereignty, at the time of the Company's or any
of its Subsidiaries' investment therein or contractual commitment providing for
such investment, is rated at least A1 by S&P or P-1 by Moody's; (d) repurchase
obligations with a term of not more than seven calendar days for underlying
securities of the type described above entered into with a depository
institution or trust company meeting the qualifications described in clause (b)
above; and (e) Investments in money market or mutual funds that invest
predominantly in Cash Equivalents of the type described in clauses (a), (b), (c)
and (d) above; provided, however, that, in the case of clause (a) above, each
such investment has a maturity of one year or less from the date of acquisition
thereof, and, in the case of clauses (b) and (c) above, each such investment has
a maturity of 270 days or less from the date of acquisition thereof.

         "Change of Control" means the occurrence of the following event: any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the voting stock of the Company.

         "Effective Date" means March 23, 1999.

          "Investment" means, with respect to any Person, any direct or indirect
loan or other extension of credit or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition by
such Person of any capital stock, bonds, notes, debentures or other securities
or evidences of Indebtedness issued by any other Person. The amount of any
Investment shall be the original cost thereof, plus the cost of all additions
thereto and minus the amount of all reductions therein in the nature of
repayment of principal or return of capital, without any adjustments for
increases or decreases in value, write-ups, write-downs or write-offs with
respect to such Investment.

         "Leverage Ratio" means, at any date of determination, the ratio of the
sum of the Indebtedness and the net worth of the Company and its Subsidiaries to
the Indebtedness of the Company and its Subsidiaries, in each case calculated on
a consolidated basis in accordance with GAAP.

         "Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest, or preference, priority, or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including without limitation
any conditional sale, deferred purchase price or other title retention
agreement, the interest of a lessor under a Capital Lease Obligation, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing, under the Uniform Commercial Code or comparable law
of any jurisdiction, of any financing statement naming the owner of the asset to
which such financing statement relates as debtor.

         "Moody's" means Moody's Investors Service, Inc., or any successor to
the rating agency business thereof.

         "Permitted Indebtedness" means, without duplication: (a) the Series B
Senior Secured Notes and the Senior Subordinated Notes; (b) Indebtedness under
one or more Working Capital Facilities; (c) Indebtedness between or among the
Company and its wholly owned Subsidiaries; (d) to the extent deemed to be
"Indebtedness," obligations under swap agreements, cap agreements, collar
agreements, insurance arrangements, or any similar agreement or arrangement, in
each case designed to provide a bona fide hedge against fluctuations in interest
rates, the cost of currency, or the cost of goods (other than inventory); (e)
other Indebtedness of the Company or its Subsidiaries in outstanding amounts not
to exceed $5 million in the aggregate at any particular time; (f) liabilities
(other than for or in connection with borrowed money) incurred in the operation
of the Finance Business in the ordinary course thereof and not more than six
months overdue, unless contested in good faith by appropriate proceedings; (g)
Indebtedness evidenced by letters of credit that are issued in the ordinary
course of the business of the Company and its Subsidiaries to secure workers'
compensation and other insurance coverages; (h) deferred taxes and other
deferred obligations incurred in the ordinary course of business and not
evidenced by notes, bonds, debentures or other evidences of indebtedness; and
(i) Indebtedness incurred in connection with any extension, renewal,
refinancing, replacement, or refunding (including successive extensions,
renewals, refinancings, replacements, or refundings), in whole or in part, of
any Indebtedness of the Company or its Subsidiaries; provided, however, that the
principal amount of the Indebtedness so incurred does not exceed the sum of the
principal amount of the Indebtedness so extended, renewed, refinanced, replaced,
or refunded, plus all interest accrued thereon and all related fees and
expenses.

         "Permitted Investments" means, without duplication: (a) Cash
Equivalents; (b) Investments in another Person, if as a result of such
Investment (i) such other Person becomes a Subsidiary of the Company or (ii)
such other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all of its assets to, the Company or a Subsidiary
of the Company; (c) Investments in any Subsidiary of the Company or Investments
in the Company by a Subsidiary of the Company; (d) commissions and advances to
employees of the Company and its Subsidiaries in the ordinary course of
business; (e) Investments representing notes, securities, or other instruments
or obligations acquired in connection with the sale of assets; (f) Investments
represented by that portion of the proceeds from Asset Sales permitted under
Section 3.7 to the extent such Investments are non-cash proceeds; (g)
Investments representing capital stock or obligations issued to the Company or
any Subsidiary of the Company in settlement of claims against any other Person
by reason of a composition or readjustment of debt or a reorganization of any
debtor of the Company or such Subsidiary; and (h) other Investments, the
aggregate amount of which at any one time does not exceed $5 million.

         "Permitted Liens" means, without duplication: (a) Liens arising under
the Collateral Security Documents; (b) Liens on new Receivables securing any
Working Capital Facility; (c) Liens incurred and pledges and deposits made in
the ordinary course of business in connection with liability insurance, workers'
compensation, unemployment insurance, old-age pensions, and other social
security benefits other than in respect of employee benefit plans subject to the
Employee Retirement Income Security Act of 1974, as amended; (d) Liens imposed
by law, such as carriers', warehousemen's, mechanics', materialmen's, and
vendor's Liens, incurred in the ordinary course of business and securing
obligations which are not yet due or which are being contested in good faith by
appropriate proceedings; (e) Liens securing the payment of taxes, assessments,
and governmental charges or levies, either (i) not delinquent or (ii) being
contested in good faith by appropriate legal or administrative proceedings and
as to which adequate reserves shall have been established on the books of the
relevant Person in conformity with GAAP; (f) zoning restrictions, easements,
rights of way, reciprocal easement agreements, operating agreements, covenants,
conditions, or restrictions on the use of any parcel of property that are
routinely granted in real estate transactions or do not interfere in any
material respect with the ordinary conduct of the business of the Company and
its Subsidiaries or the value of such property for the purpose of such business;
(f) Liens on property existing at the time such property is acquired; (g)
purchase money Liens upon or in any property acquired or held in the ordinary
course of business to secure Indebtedness incurred solely for the purpose of
financing the acquisition of such property; (h) Liens on the assets of any
Subsidiary of the Company at the time such Subsidiary is acquired; (i) Liens
with respect to obligations in outstanding amounts not to exceed $5.0 million at
any particular time and that (i) are not incurred in connection with the
borrowing of money or obtaining advances or credit (other than trade credit in
the ordinary course of business) and (ii) do not in the aggregate interfere in
any material respect with the ordinary conduct of the business of the Company
and its Subsidiaries; (j) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of the business of the Company and its
Subsidiaries; (k) Liens resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in respect
of which (i) the Company or a Subsidiary of the Company shall in good faith be
prosecuting an appeal or proceeding for a review, (ii) a stay of execution
pending such appeal or proceeding for review shall be in effect, and (iii) the
Company shall have established on its books adequate reserves in accordance with
GAAP; (l) rights of banks to set off deposits against Indebtedness owed to such
banks whether arising by law or pursuant to deposit, cash collateral or similar
agreements; and (m) any extension, renewal or replacement, in whole or in part,
of any Lien described in the foregoing clauses; provided, however, that any such
extension, renewal or replacement Lien is limited to the property or assets
covered by the Lien extended, renewed or replaced or substitute property or
assets, the value of which is not materially greater than the value of the
property or assets for which the substitute property or assets are substituted.

         "Plan" means the Plan of Reorganization of Mercury Finance Company
confirmed by the United States Bankruptcy Court for the Northern District of
Illinois pursuant to an order dated March 10, 1999.

         "Receivables" means (i) consumer installment sale contracts and loans
evidenced by promissory notes secured by new and used automobiles and light
trucks, (ii) other consumer installment sale contracts or lease contracts and
(iii) loans secured by residential mortgages, in the case of each of the clauses
(i), (ii) and (iii), that are purchased or originated in the ordinary course of
business by the Company or any Subsidiary of the Company. All Receivables shall
be valued in accordance with GAAP.

         "Repurchase Date" has the meaning ascribed thereto in Section 3.4(a).

         "Repurchase Price" has the meaning described thereto in Section 3.4(a).

         "Restricted Payments" has the meaning ascribed thereto in Section 3.3.

         "Senior Subordinated Notes" means the Company's 11% Senior Subordinated
Notes Due 2002 issued under the Indenture dated as of March 23, 1999 between the
Company and the trustee thereunder.

         "Series B Senior Secured Notes" means the Company's Senior Secured
Notes Due 2001, Series B issued under the Indenture.

         "S&P" means Standard & Poor's Ratings Group, or any successor to the
rating agency business thereof.

         "Subordinated Indebtedness" means any Indebtedness of the Company which
is expressly subordinated in right of payment to the senior secured notes issued
or to be issued under this Indenture, including without limitation, the Series B
Senior Secured Notes.

         "Uniform Commercial Code" means the New York Uniform Commercial Code as
amended or modified from time to time.

                         ARTICLE III. CERTAIN COVENANTS.

Section 3.1.      Indebtedness.

         The Company shall not, nor shall it permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become liable with respect to, any Indebtedness other than Permitted
Indebtedness if immediately after incurring such Indebtedness other than
Permitted Indebtedness, the Company's Leverage Ratio, calculated on a pro forma
basis, would be equal to or greater than 2.00:1.00.

Section 3.2.      Liens.

         The Company shall not, and shall not permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Liens upon any of their respective
assets, other than Permitted Liens.

Section 3.3.      Restricted Payments.

         The Company shall not, and shall not permit any of its Subsidiaries to,
(a) declare or pay any dividend on, or make any other distribution on account
of, the Company's capital stock; (b) purchase, redeem or otherwise acquire or
retire for value any capital stock (including any option, warrant or right to
purchase capital stock) of the Company owned beneficially by a Person other than
a wholly owned Subsidiary of the Company; (c) purchase, redeem or otherwise
acquire or retire for value the principal of any Subordinated Indebtedness prior
to the scheduled maturity thereof other than pursuant to mandatory scheduled
redemptions or repayments; or (d) make any Investment other than Permitted
Investments (all such dividends, distributions, purchases, redemptions, or
Investments being collectively referred to as "Restricted Payments").
Notwithstanding anything in the foregoing to the contrary, the Company may take
the actions described in Clause (a), (b) or (d) above if, at the time of such
action or after giving effect thereto: (i) no Event of Default shall have
occurred and is continuing; (ii) the Company could incur at least $1.00 of
Indebtedness (other than Permitted Indebtedness) under Section 3.1; and (iii)
the cumulative amount of Restricted Payments made subsequent to the Effective
Date shall not be greater than the sum of: (A) 50% of the Company's cumulative
consolidated net income (or a negative amount equal to 100% of the Company's
cumulative consolidated net loss, if applicable) from the Effective Date through
the end of the Company's fiscal quarter immediately preceding the taking of such
action; and (B) 100% of the aggregate net cash proceeds received by the Company
from the issue or sale of capital stock of the Company (other than redeemable
capital stock), including capital stock issued upon the conversion of
convertible Indebtedness issued on or after the Effective Date, in exchange for
outstanding Indebtedness, or from the exercise of options, warrants, or rights
to purchase capital stock of the Company to any Person other than to a
Subsidiary of the Company subsequent to the Effective Date (with the Company
being deemed, in the case of capital stock issued upon conversion or in exchange
for Indebtedness, to have received net cash proceeds equal to the principal
amount of the Indebtedness so converted or exchanged); provided, however, that
(1) the payment of any dividend within 60 calendar days after the date of
declaration thereof, if such declaration complied with the foregoing redemption
or other acquisition provisions on the date of such declaration, (2) the
purchase, redemption, or other acquisition or retirement for value of any shares
of capital stock of the Company in exchange for, or out of the proceeds of, a
substantially concurrent issue and sale (other than to a Subsidiary of the
Company) of other shares of capital stock (other than redeemable capital stock)
of the Company, and (3) any purchase, redemption or other acquisition or
retirement for value of any capital stock (including any option, warrant, or
right to purchase capital stock) of the Company issued to any employee or
director of the Company pursuant to any employee benefit or similar plan shall
not be deemed to constitute "Restricted Payments" and shall not be prohibited
under this Section.

Section 3.4.      Change of Control.

         (a) Right to Require Repurchase. In the event that there shall occur a
Change of Control, then each Holder shall have the right, at such Holder's
option, to require the Company to repurchase all or any designated part of such
Holder's Senior Secured Notes on the date (the "Repurchase Date") selected by
the Company that is not more than 75 days after the date the Company gives
notice of the Change of Control as contemplated in paragraph (b) below at a
price (the "Repurchase Price") equal to 101% of the outstanding principal amount
thereof, plus accrued and unpaid interest to the Repurchase Date. Such right to
require the repurchase of Senior Secured Notes shall continue notwithstanding a
discharge of the Company from its obligations with respect to the Senior Secured
Notes in accordance with the provisions of Article VI or Article XIII of the
Indenture.

         (b) Notice; Method of Exercising Repurchase Right. On or before the
fifteenth day after the Company knows that a Change of Control has occurred, the
Company or, at the request of the Company, the Trustee (in the name of and at
the expense of the Company), shall give notice of the occurrence of the Change
of Control and of the repurchase right set forth herein arising as a result
thereof by first-class mail, postage prepaid, to each Holder of the Senior
Secured Notes at such Holder's address appearing in the Security Register for
the Senior Secured Notes. The Company shall also deliver a copy of such notice
to the Trustee.

                  Each notice of a repurchase right shall state:

                           (1) the Repurchase Date,

                           (2) the date by which the repurchase right must be
                           exercised,

                           (3) the Repurchase Price, and

                           (4) the instructions a Holder must follow to exercise
                           its repurchase right.

                  No failure of the Company to give the foregoing notice shall
limit any Holder's right to exercise its repurchase right. The Trustee shall
have no affirmative obligation to determine if there shall have occurred a
Change of Control. To exercise a repurchase right, a Holder shall deliver to the
Company (or to an agent designated by the Company for such purpose in the notice
referred to above) on or before the fifth Business Day prior to the Repurchase
Date (i) written notice of the Holder's exercise of such right, which notice
shall set forth the name of the Holder, the principal amount of the Senior
Secured Note (or portion of the Senior Secured Note) to be repurchased and a
statement that an election to exercise the repurchase right is being made
thereby, and (ii) the Senior Secured Note with respect to which the repurchase
right is being exercised, duly endorsed for transfer to the Company. Such
written notice shall be irrevocable. If the Repurchase Date falls between any
Regular Record Date and the corresponding succeeding Interest Payment Date,
Senior Secured Notes to be repurchased must be accompanied by payment from the
Holder of an amount equal to the interest thereon which the registered Holder
thereof is to receive on such Interest Payment Date. In the event a repurchase
right shall be exercised in accordance with the terms hereof and the
instructions referred to herein, (x) the Company shall on the Repurchase Date
pay or cause to be paid in cash to the Holder thereof the Repurchase Price for
each Senior Secured Note (or any portion thereof) as to which the repurchase
right has been exercised, and (y) the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such Senior
Secured Note without service charge, a new Senior Secured Note or Notes, as
applicable, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for any portion of the
principal of such Senior Secured Note as to which the repurchase right has not
been exercised. Any questions as to the compliance by a Holder of Senior Secured
Notes with the requirements for a valid exercise of a repurchase right
(including the timely delivery of an exercise notice in proper form) shall be
determined by the Company in its sole discretion, which in all events shall be
exercised in good faith.

         (c) Deposit of Repurchase Price. On or prior to the Repurchase Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 7.03 of the Indenture) an amount of money sufficient to pay
the Repurchase Price of the Senior Secured Notes which are to be repurchased on
the Repurchase Date.

         (d) Senior Secured Notes Not Repurchased on Repurchase Date. If any
Senior Secured Note (or any portion thereof) surrendered for repurchase shall
not be so paid on the Repurchase Date, the principal of such Senior Secured Note
(or such portion thereof) shall, until paid, bear interest from the Repurchase
Date at the rate borne by such Senior Secured Note.

         (e) Compliance. The Company shall comply with all tender offer rules,
including but not limited to Section 14(e) of the Exchange Act and Rule 14e-1
thereunder, to the extent applicable to any repurchase of the Senior Secured
Notes under this Section 3.4.

Section 3.5.      Payment Restrictions Affecting Subsidiaries.

         The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist any
contractual restriction on the ability of any Subsidiary of the Company to (a)
pay any dividend on, or make any other distribution on account of, its capital
stock or pay any Indebtedness owed to the Company or a Subsidiary of the Company
or (b) make loans or advances to the Company or a Subsidiary of the Company.

Section 3.6.      Issuance of Subsidiary Preferred Stock.

         The Company shall not permit any Subsidiary of the Company to issue any
shares of preferred stock.

Section 3.7.      Asset Sales.

         The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, conduct any Asset Sale, except for the sale of the
Company's proprietary credit card receivable portfolio, unless (i) such Asset
Sale is for fair market value (as evidenced by a resolution by the Company's
Board of Directors, certified by an officer of the Company and delivered to the
Trustee) and (ii) at least 85% of the consideration received by the Company in
such Asset Sale is in the form of cash. All net cash proceeds realized from any
Asset Sale (after taxes, reasonable fees and expenses incurred directly
therewith and any Indebtedness secured hereby), including the receipt of funds
from any federal or state income tax refunds, in excess of $40,000,000 in the
aggregate for such Asset Sale or income tax refund and all other Asset Sales or
income tax refunds occurring within the immediately preceding 360 day period
will be paid to the Trustee within 60 days of the receipt of the proceeds to
redeem Securities issued under the Indenture in accordance with the terms of the
Indenture.

Section 3.8.      Transactions with Affiliates.

         The Company shall not, and shall not permit any of its Subsidiaries to,
engage in any transaction with an Affiliate (other than the Company or a wholly
owned Subsidiary thereof) on terms more favorable to the Affiliate than would
have been obtainable in arm's-length dealing. Solely for purposes of this
Section 3.8, an "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person, or any other Person that has a
relationship with such specified Person whereby either of such Persons holds or
beneficially owns 10% or more of the equity interest in the other or 10% or more
of any class of voting securities of the other. For the purposes of this
definition, "control" when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

Section 3.9.      Change in Business.

         The Company shall not, and shall not permit any of its Subsidiaries to,
engage in any material line of business substantially different from the Finance
Business.

                    ARTICLE IV. ADDITIONAL EVENTS OF DEFAULT.

Section 4.1.      Immediate Events of Default.

         Notwithstanding anything in Section 9.01 of the Indenture to the
contrary, if the Company defaults in the performance of, or breaches any,
covenant set forth in Article III (other than Section 3.8) of this First
Supplemental Indenture or in Section 7.05 of the Indenture, such default or
breach shall immediately constitute an Event of Default, without giving effect
to any passage of time or notice or both.

                      ARTICLE V. REDEMPTION OF SECURITIES.

Section 5.1.      Right of Redemption.

         The Senior Secured Notes may be redeemed in accordance with the form of
note set forth herein.

Section 5.2.      Repurchase.

         The Company may at any time and from time to time purchase Senior
Secured Notes in the open market or otherwise at any price, and any Senior
Secured Notes so purchased shall be promptly surrendered to the Trustee for
cancellation and shall not be reissued.

                           ARTICLE VI. MISCELLANEOUS.

Section 6.1.      Reference to and Effect on the Indenture.

         This First Supplemental Indenture shall be construed as supplemental to
the Indenture and all the terms and conditions of this First Supplemental
Indenture shall be deemed to be part of the terms and conditions of the
Indenture. Except as set forth herein, the Indenture heretofore executed and
delivered is hereby (i) incorporated by reference in this First Supplemental
Indenture and (ii) ratified, approved and confirmed.

Section 6.2.      Waiver of Certain Covenants.

         The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Article III hereof if the Holders of a
majority in principal amount of the Outstanding Senior Secured Notes shall, by
Act of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision or condition except to the extent
so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.

Section 6.3.      Supplemental Indenture May be Executed in Counterparts.

         This instrument 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.



<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.

[Seal]                               MFN FINANCIAL CORPORATION


                                     By:
                                     Name:
                                     Title:




                                     NORWEST BANK MINNESOTA, NATIONAL 
                                     ASSOCIATION, AS TRUSTEE

                                     By:
                                     Name:
                                     Title:


                                                                    Exhibit 4(C)





                            MFN FINANCIAL CORPORATION

                                       and

                  Norwest Bank Minnesota, National Association,

                                     Trustee



                       SECOND SUPPLEMENTAL TRUST INDENTURE

                           Dated as of March 23, 1999

                           Supplementing that certain


                                    INDENTURE

                           Dated as of March 23, 1999



                    Authorizing the Issuance and Delivery of

                            Senior Secured Securities

 consisting of up to $440,000,000, less the aggregate principal amount of Senior
        Secured Notes Due 2001, Series A, issued pursuant to the First
        Supplemental Indenture to the Indenture, aggregate principal amount of

                     Senior Secured Notes Due 2001, Series B

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

RECITALS......................................................................1
[Form of Face of Security]....................................................2
[Form of Reverse of Security].................................................4
ARTICLE I.  ISSUANCE OF SENIOR SECURED NOTES..................................7
         Section 1.1. Issuance of Senior Secured Notes; Principal Amount;
                      Maturity................................................7
         Section 1.2. Interest on the Senior Secured Notes; Payment of
                      Interest................................................8
ARTICLE II.  CERTAIN DEFINITIONS..............................................9
         Section 2.1. Certain Definitions.....................................9
ARTICLE III.  CERTAIN COVENANTS..............................................13
         Section 3.1. Indebtedness...........................................13
         Section 3.2. Liens..................................................13
         Section 3.3. Restricted Payments....................................13
         Section 3.4. Change of Control......................................14
         Section 3.5. Payment Restrictions Affecting Subsidiaries............16
         Section 3.6. Issuance of Subsidiary Preferred Stock.................16
         Section 3.7. Asset Sales............................................16
         Section 3.8. Transactions with Affiliates...........................16
         Section 3.9. Change in Business.....................................16
ARTICLE IV.  ADDITIONAL EVENTS OF DEFAULT....................................17
ARTICLE V.  REDEMPTION OF SECURITIES.........................................17
         Section 5.1. Right of Redemption....................................17
         Section 5.2. Repurchase.............................................17
ARTICLE VI.  MISCELLANEOUS...................................................17
         Section 6.1. Reference to and Effect on the Indenture...............17
         Section 6.2. Waiver of Certain Covenants............................18
         Section 6.3. Supplemental Indenture May be Executed in Counterparts.18

<PAGE>

         SECOND SUPPLEMENTAL INDENTURE, dated as of March 23, 1999 (this "Second
Supplemental Indenture"), between MFN FINANCIAL CORPORATION, a corporation duly
organized and existing under the laws of the State of Delaware (the "Company"),
and Norwest Bank Minnesota, National Association, a U.S. national banking
association, as Trustee (the "Trustee"), supplementing that certain Indenture,
dated as of March 23, 1999, between the Company and the Trustee (the
"Indenture").

                                    RECITALS

         A. The Company has duly authorized the execution and delivery of the
Indenture to provide for the issuance from time to time of its senior secured
notes (the "Securities") to be issued in one or more series as provided for in
the Indenture.

         B. The Indenture provides that the Securities of each series shall be
in such form as may be established by or pursuant to a Board Resolution or in
one or more indentures supplemental thereto, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or as
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution thereof.

         C. The Company and the Trustee have agreed that the Company shall issue
and deliver, and the Trustee shall authenticate, Securities denominated "Senior
Secured Notes Due 2001, Series B" (the "Senior Secured Notes") pursuant to the
terms of this Second Supplemental Indenture and substantially in the form set
forth below, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by the Indenture
and this Second Supplemental Indenture, and with such letters, numbers, or other
marks of identification and such legends or endorsements placed thereon as may
be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Senior
Secured Notes, as evidenced by their execution thereof.



<PAGE>



                           [Form of Face of Security]

                            MFN FINANCIAL CORPORATION

                     SENIOR SECURED NOTE DUE 2001, SERIES B

No.  R-__________                                               $0.00
                                                                CUSIP No.

         MFN FINANCIAL CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter called the "Company," which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to the Trustee, or registered
assigns, the principal sum of $0.00 on March 23, 2001, subject to earlier
redemption or repurchase as described below, and to pay interest thereon from
March 23, 1999, or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, at a floating rate equal to the London
interbank offering rate for three months quoted in The Wall Street Journal on
the later of the Effective Date and the most recently occurring Interest Payment
Date ("LIBOR") plus 4.495% per annum, payable quarterly on March 23rd, June
23rd, September 23rd and December 23rd of each year, commencing on June 23rd,
1999, until the principal hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date shall, as provided in said Indenture, be computed on the basis of a
360-day year consisting of twelve 30-day months and paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the 30th day (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 calendar days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.

Payment of the principal of and any such interest on this Security shall be made
at the office or agency of the Company maintained for such purpose in New York,
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address appears in the Security Register.

         REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS SET FORTH ON THE
REVERSE HEREOF. SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
THOUGH FULLY SET FORTH IN THIS PLACE.

         This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication herein has been signed manually by the
Trustee under said Indenture.

         This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than the
Depositary or a nominee thereof, and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, this Security will be a Global Security subject to the
foregoing, except in such limited circumstances

         IN WITNESS WHEREOF, this instrument has been duly executed in
accordance with the Indenture.

                                         MFN FINANCIAL CORPORATION

                                         By:
                                         Name:
Attest:                                  Title:

By:




<PAGE>



                          [Form of Reverse of Security]

                            MFN FINANCIAL CORPORATION


         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities") issued and to be issued in one or more
series under an Indenture, dated as of March 23, 1999 (herein called the
"Indenture"), between the Company and Norwest Bank Minnesota, National
Association, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof, limited in aggregate principal
amount to $440,000,000 less the aggregate principal amount of Series A Senior
Secured Notes.

         On the terms and subject to the conditions set forth in the Company
Security Documents, the payment and performance of the obligations of the
Company under the Securities issued under this Indenture, including this
Security, are secured by the Company Collateral and have the benefit of the
Subsidiaries Guaranty Agreement executed by each Subsidiary (except MFN
Insurance Company) of the Company. Payment and performance of the obligations of
the Subsidiaries under the Subsidiaries Guaranty Agreement are secured by the
Subsidiaries Collateral. The Company Collateral and the Subsidiaries Collateral
has been pledged to the Trustee on the terms and subject to the conditions set
forth in the Collateral Security Documents for the equal and ratable benefit of
the Holders of Securities issued under the Indenture. As set forth in the
Indenture, the Company Pledge Agreement, the Company Security Agreement, the
Subsidiaries Guaranty Agreement and the Subsidiaries Security Agreement, to the
extent the Company or a Subsidiary of the Company enters into a Working Capital
Facility, the rights of any party lending money to the Company or a Subsidiary
of the Company pursuant to such Working Capital Facility with respect to certain
assets comprising a portion of the Company Collateral or the Subsidiaries
Collateral will be senior to those rights of the Holders of Securities issued
under the Indenture.

         No sinking fund is provided for the Securities. The Securities are
subject to redemption at the option of the Company, at any time and from time to
time, in whole or in part, in increments of not less than $5.0 million, upon not
more than 60 nor less than 30 days' notice to the Holders prior to the
Redemption Date, at the principal amount thereof, plus accrued and unpaid
interest thereon to the date of redemption.

         If less than all of the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed will be selected by such method as
the Trustee may deem fair and appropriate. In the event of the redemption of
this Security in part only, a new Security or Securities of this series and of
like tenor for the portion hereof not so redeemed shall be issued in the name of
the Holder hereof upon the cancellation hereof.

         Upon the occurrence of a Change of Control, the Company is required to
repurchase the Securities, at the option of the Holders thereof, at a purchase
price equal to 101% of the outstanding principal amount thereof, plus accrued
and unpaid interest thereon to the Repurchase Date, but interest installments
with a Stated Maturity on or prior to such Repurchase Date shall be payable to
the Holders of such Securities of record at the close of business on the
relevant Regular Record Dates referred to on the face hereof all as provided in
the Indenture. In the event of the repurchase of this Security in part only, a
new Security or Securities of this series of like tenor for the portion hereof
not so repurchased shall be issued in the name of the Holder hereof upon the
cancellation hereof.

         If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

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

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder unless (a) such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Securities of this series, (b) the Holders of not less than 25% in
principal amount of the Securities of this series at the time Outstanding shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity,
(c) the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request and (d) the Trustee shall have failed
to institute such proceeding for 60 calendar days after receipt of such notice,
request, and offer of indemnity. However, the foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or interest hereon on or after the respective due
dates therefor expressed herein.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium or
interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.

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

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and interest
on this Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
shall be issued to the designated transferee or transferees.

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

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

         All terms used in this Security that are defined in the Indenture shall
have the respective meanings assigned to them in the Indenture. This Security,
the Indenture and the Collateral Security Documents shall be construed in
accordance with the laws of the State of New York without giving effect to
principles of conflict of laws of such State.

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



<PAGE>



         D. The Trustee's certificate of authentication shall be in
substantially the following form:


                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

Dated:                                 Norwest Bank Minnesota, National 
                                       Association, as Trustee


                                       By:
                                                 Authorized Signatory

         E. All acts and things necessary to make the Senior Secured Notes, when
the Senior Secured Notes have been executed by the Company and authenticated by
the Trustee and delivered as provided in the Indenture and this Second
Supplemental Indenture, the valid, binding and legal obligations of the Company
and to constitute these presents a valid indenture and agreement according to
its terms, have been done and performed, and the execution and delivery by the
Company of the Indenture and this Second Supplemental Indenture and the issue
hereunder of the Senior Secured Notes have in all respects been duly authorized;
and the Company, in the exercise of the legal right and power in it vested, has
executed and delivered the Indenture and is executing and delivering this Second
Supplemental Indenture and proposes to make, execute, issue and deliver the
Senior Secured Notes.

         NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:

         In order to declare the terms and conditions upon which the Senior
Secured Notes are authenticated, issued, and delivered, and in consideration of
the premises and of the purchase and acceptance of the Senior Secured Notes by
the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of the respective Holders from time to time of the Senior Secured Notes,
as follows:

                  ARTICLE I. ISSUANCE OF SENIOR SECURED NOTES.

Section 1.1.      Issuance of Senior Secured Notes; Principal Amount; Maturity.

         (a) On March 23, 1999, the Company shall issue and deliver to the
Trustee, and the Trustee shall authenticate, Senior Secured Notes substantially
in the form set forth above, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
the Indenture and this Second Supplemental Indenture, and with such letters,
numbers, or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Senior Secured Notes, as evidenced by their execution thereof.

         (b) The Senior Secured Notes shall be issued in the aggregate principal
amount of up to $440,000,000.00 less the aggregate principal amount of the
Series A Senior Secured Notes and shall mature on March 23, 2001.

Section 1.2.      Interest on the Senior Secured Notes; Payment of Interest.

         (a) The Senior Secured Notes shall bear interest for each period
preceding any Interest Payment Date at a floating rate equal to the London
interbank offering rate for three months quoted in The Wall Street Journal on
the later of Effective Date and the preceding Interest Payment Date ("LIBOR")
plus 4.495% per annum from March 23, 1999, or, if later, from the most recent
Interest Payment Date to which interest has been paid or duly provided for.

         (b) The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date shall, as provided in the Indenture, be paid to the
Person in whose name a Senior Secured Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the 30th day (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name the Senior Secured Note (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of the Senior Secured Notes not less than 10 calendar days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Senior Secured Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.

         (c) Payment of the principal of and any such interest on the Senior
Secured Notes shall be made at the office or agency of the Company maintained
for such purpose in New York, New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address appears in the Security Register.

         (d) For each of (i) the Effective Date and (ii) each Interest Payment
Date thereafter, the Company shall calculate the interest rate pursuant to
Section 1.2(a) and shall notify the Trustee in writing of such rate. The Trustee
shall transmit such written notice to each record Holder.

                        ARTICLE II. CERTAIN DEFINITIONS.

Section 2.1.      Certain Definitions.

         The terms defined in this Section 2.1 (except as herein otherwise
expressly provided or unless the context of this Second Supplemental Indenture
otherwise requires) for all purposes of this Second Supplemental Indenture and
of any indenture supplemental hereto have the respective meanings specified in
this Section 2.1. All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP. All other terms used in this
Second Supplemental Indenture that are defined in the Indenture or the Trust
Indenture Act, either directly or by reference therein (except as herein
otherwise expressly provided or unless the context of this Second Supplemental
Indenture otherwise requires), have the respective meanings assigned to such
terms in the Indenture or the Trust Indenture Act, as the case may be, as in
force at the date of this Second Supplemental Indenture as originally executed.

         "Affiliate" has the meaning ascribed thereto in Section 3.8.

         "Asset Sale" means any sale or other disposition, or series of sales or
other dispositions (including, without limitation, by merger or consolidation
and whether by operation of law or otherwise) of assets by the Company or its
Subsidiaries to any Person except (i) sales of used, worn out or surplus
equipment in the ordinary course of business and (ii) sales, contributions or
transfers of Receivables pursuant to any Working Capital Facility. The
definition of Asset Sale shall include the receipt of funds from any federal or
state income tax refunds.

         "Cash Equivalent" means: (a) obligations issued or unconditionally
guaranteed as to principal and interest by the United States of America or by
any agency or authority controlled or supervised by and acting as an
instrumentality of the United States of America which are backed by the full
faith and credit of the United States of America; (b) obligations (including,
but not limited to, demand or time deposits, bankers' acceptances and
certificates of deposit) issued by a depository institution or trust company or
a wholly owned subsidiary or branch office of any depository institution or
trust company, provided that (i) such depository institution or trust company
has, at the time of the Company's or any of its Subsidiaries' investment therein
or contractual commitment providing for such investment, capital, surplus or
undivided profits (as of the date of such institution's most recently published
financial statements) in excess of $100 million and (ii) the commercial paper of
such depository institution or trust company, at the time of the Company's or
any of its Subsidiaries' investment therein or contractual commitment providing
for such investment, is rated at least A1 by S&P or P-1 by Moody's; (c) debt
obligations (including, but not limited to, commercial paper and medium-term
notes) issued or unconditionally guaranteed as to principal and interest by any
corporation, state or municipal government or agency or instrumentality thereof
or foreign sovereignty, if the commercial paper of such corporation, state or
municipal government or foreign sovereignty, at the time of the Company's or any
of its Subsidiaries' investment therein or contractual commitment providing for
such investment, is rated at least A1 by S&P or P-1 by Moody's; (d) repurchase
obligations with a term of not more than seven calendar days for underlying
securities of the type described above entered into with a depository
institution or trust company meeting the qualifications described in clause (b)
above; and (e) Investments in money market or mutual funds that invest
predominantly in Cash Equivalents of the type described in clauses (a), (b), (c)
and (d) above; provided, however, that, in the case of clause (a) above, each
such investment has a maturity of one year or less from the date of acquisition
thereof, and, in the case of clauses (b) and (c) above, each such investment has
a maturity of 270 days or less from the date of acquisition thereof.

         "Change of Control" means the occurrence of the following event: any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the voting stock of the Company.

         "Effective Date" means March 23, 1999.

          "Investment" means, with respect to any Person, any direct or indirect
loan or other extension of credit or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition by
such Person of any capital stock, bonds, notes, debentures or other securities
or evidences of Indebtedness issued by any other Person. The amount of any
Investment shall be the original cost thereof, plus the cost of all additions
thereto and minus the amount of all reductions therein in the nature of
repayment of principal or return of capital, without any adjustments for
increases or decreases in value, write-ups, write-downs or write-offs with
respect to such Investment.

         "Leverage Ratio" means, at any date of determination, the ratio of the
sum of the Indebtedness and the net worth of the Company and its Subsidiaries to
the Indebtedness of the Company and its Subsidiaries, in each case calculated on
a consolidated basis in accordance with GAAP.

         "Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest, or preference, priority, or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including without limitation
any conditional sale, deferred purchase price or other title retention
agreement, the interest of a lessor under a Capital Lease Obligation, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing, under the Uniform Commercial Code or comparable law
of any jurisdiction, of any financing statement naming the owner of the asset to
which such financing statement relates as debtor.

         "Moody's" means Moody's Investors Service, Inc., or any successor to
the rating agency business thereof.

         "Permitted Indebtedness" means, without duplication: (a) the Series A
Senior Secured Notes and the Senior Subordinated Notes; (b) Indebtedness under
one or more Working Capital Facilities; (c) Indebtedness between or among the
Company and its wholly owned Subsidiaries; (d) to the extent deemed to be
"Indebtedness," obligations under swap agreements, cap agreements, collar
agreements, insurance arrangements, or any similar agreement or arrangement, in
each case designed to provide a bona fide hedge against fluctuations in interest
rates, the cost of currency, or the cost of goods (other than inventory); (e)
other Indebtedness of the Company or its Subsidiaries in outstanding amounts not
to exceed $5 million in the aggregate at any particular time; (f) liabilities
(other than for or in connection with borrowed money) incurred in the operation
of the Finance Business in the ordinary course thereof and not more than six
months overdue, unless contested in good faith by appropriate proceedings; (g)
Indebtedness evidenced by letters of credit that are issued in the ordinary
course of the business of the Company and its Subsidiaries to secure workers'
compensation and other insurance coverages; (h) deferred taxes and other
deferred obligations incurred in the ordinary course of business and not
evidenced by notes, bonds, debentures or other evidences of indebtedness; and
(i) Indebtedness incurred in connection with any extension, renewal,
refinancing, replacement, or refunding (including successive extensions,
renewals, refinancings, replacements, or refundings), in whole or in part, of
any Indebtedness of the Company or its Subsidiaries; provided, however, that the
principal amount of the Indebtedness so incurred does not exceed the sum of the
principal amount of the Indebtedness so extended, renewed, refinanced, replaced,
or refunded, plus all interest accrued thereon and all related fees and
expenses.

         "Permitted Investments" means, without duplication: (a) Cash
Equivalents; (b) Investments in another Person, if as a result of such
Investment (i) such other Person becomes a Subsidiary of the Company or (ii)
such other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all of its assets to, the Company or a Subsidiary
of the Company; (c) Investments in any Subsidiary of the Company or Investments
in the Company by a Subsidiary of the Company; (d) commissions and advances to
employees of the Company and its Subsidiaries in the ordinary course of
business; (e) Investments representing notes, securities, or other instruments
or obligations acquired in connection with the sale of assets; (f) Investments
represented by that portion of the proceeds from Asset Sales permitted under
Section 3.7 to the extent such Investments are non-cash proceeds; (g)
Investments representing capital stock or obligations issued to the Company or
any Subsidiary of the Company in settlement of claims against any other Person
by reason of a composition or readjustment of debt or a reorganization of any
debtor of the Company or such Subsidiary; and (h) other Investments, the
aggregate amount of which at any one time does not exceed $5 million.

         "Permitted Liens" means, without duplication: (a) Liens arising under
the Collateral Security Documents; (b) Liens on new Receivables securing any
Working Capital Facility; (c) Liens incurred and pledges and deposits made in
the ordinary course of business in connection with liability insurance, workers'
compensation, unemployment insurance, old-age pensions, and other social
security benefits other than in respect of employee benefit plans subject to the
Employee Retirement Income Security Act of 1974, as amended; (d) Liens imposed
by law, such as carriers', warehousemen's, mechanics', materialmen's, and
vendor's Liens, incurred in the ordinary course of business and securing
obligations which are not yet due or which are being contested in good faith by
appropriate proceedings; (e) Liens securing the payment of taxes, assessments,
and governmental charges or levies, either (i) not delinquent or (ii) being
contested in good faith by appropriate legal or administrative proceedings and
as to which adequate reserves shall have been established on the books of the
relevant Person in conformity with GAAP; (f) zoning restrictions, easements,
rights of way, reciprocal easement agreements, operating agreements, covenants,
conditions, or restrictions on the use of any parcel of property that are
routinely granted in real estate transactions or do not interfere in any
material respect with the ordinary conduct of the business of the Company and
its Subsidiaries or the value of such property for the purpose of such business;
(f) Liens on property existing at the time such property is acquired; (g)
purchase money Liens upon or in any property acquired or held in the ordinary
course of business to secure Indebtedness incurred solely for the purpose of
financing the acquisition of such property; (h) Liens on the assets of any
Subsidiary of the Company at the time such Subsidiary is acquired; (i) Liens
with respect to obligations in outstanding amounts not to exceed $5.0 million at
any particular time and that (i) are not incurred in connection with the
borrowing of money or obtaining advances or credit (other than trade credit in
the ordinary course of business) and (ii) do not in the aggregate interfere in
any material respect with the ordinary conduct of the business of the Company
and its Subsidiaries; (j) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of the business of the Company and its
Subsidiaries; (k) Liens resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in respect
of which (i) the Company or a Subsidiary of the Company shall in good faith be
prosecuting an appeal or proceeding for a review, (ii) a stay of execution
pending such appeal or proceeding for review shall be in effect, and (iii) the
Company shall have established on its books adequate reserves in accordance with
GAAP; (l) rights of banks to set off deposits against Indebtedness owed to such
banks whether arising by law or pursuant to deposit, cash collateral or similar
agreement; and (m) any extension, renewal or replacement, in whole or in part,
of any Lien described in the foregoing clauses; provided, however, that any such
extension, renewal or replacement Lien is limited to the property or assets
covered by the Lien extended, renewed or replaced or substitute property or
assets, the value of which is not materially greater than the value of the
property or assets for which the substitute property or assets are substituted.

         "Plan" means the Plan of Reorganization of Mercury Finance Company
confirmed by the United States Bankruptcy Court for the Northern District of
Illinois pursuant to an order dated March 10, 1999.

         "Receivables" means (i) consumer installment sale contracts and loans
evidenced by promissory notes secured by new and used automobiles and light
trucks, (ii) other consumer installment sale contracts or lease contracts and
(iii) loans secured by residential mortgages, in the case of each of the clauses
(i), (ii) and (iii), that are purchased or originated in the ordinary course of
business by the Company or any Subsidiary of the Company. All Receivables shall
be valued in accordance with GAAP.

         "Repurchase Date" has the meaning ascribed thereto in Section 3.4(a).

         "Repurchase Price" has the meaning described thereto in Section 3.4(a).

         "Restricted Payments" has the meaning ascribed thereto in Section 3.3.

         "Senior Subordinated Notes" means the Company's 11% Senior Subordinated
Notes Due 2002 issued under the Indenture dated as of March 23, 1999 between the
Company and the trustee thereunder.

         "Series A Senior Secured Notes" means the Company's Senior Secured
Notes Due 2001, Series A issued under the Indenture.

         "S&P" means Standard & Poor's Ratings Group, or any successor to the
rating agency business thereof.

         "Subordinated Indebtedness" means any Indebtedness of the Company which
is expressly subordinated in right of payment to the senior secured notes issued
or to be issued under this Indenture, including without limitation, the Series B
Senior Secured Notes.

         "Uniform Commercial Code" means the New York Uniform Commercial Code as
amended or modified from time to time.

                         ARTICLE III. CERTAIN COVENANTS.

Section 3.1.      Indebtedness.

         The Company shall not, nor shall it permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become liable with respect to, any Indebtedness other than Permitted
Indebtedness if immediately after incurring such Indebtedness other than
Permitted Indebtedness, the Company's Leverage Ratio, calculated on a pro forma
basis, would be equal to or greater than 2.00:1.00.

Section 3.2.      Liens.

         The Company shall not, and shall not permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Liens upon any of their respective
assets, other than Permitted Liens.

Section 3.3.      Restricted Payments.

         The Company shall not, and shall not permit any of its Subsidiaries to,
(a) declare or pay any dividend on, or make any other distribution on account
of, the Company's capital stock; (b) purchase, redeem or otherwise acquire or
retire for value any capital stock (including any option, warrant or right to
purchase capital stock) of the Company owned beneficially by a Person other than
a wholly owned Subsidiary of the Company; (c) purchase, redeem or otherwise
acquire or retire for value the principal of any Subordinated Indebtedness prior
to the scheduled maturity thereof other than pursuant to mandatory scheduled
redemptions or repayments; or (d) make any Investment other than Permitted
Investments (all such dividends, distributions, purchases, redemptions, or
Investments being collectively referred to as "Restricted Payments").
Notwithstanding anything in the foregoing to the contrary, the Company may take
the actions described in Clause (a), (b) or (d) above if, at the time of such
action or after giving effect thereto: (i) no Event of Default shall have
occurred and is continuing; (ii) the Company could incur at least $1.00 of
Indebtedness (other than Permitted Indebtedness) under Section 3.1; and (iii)
the cumulative amount of Restricted Payments made subsequent to the Effective
Date shall not be greater than the sum of: (A) 50% of the Company's cumulative
consolidated net income (or a negative amount equal to 100% of the Company's
cumulative consolidated net loss, if applicable) from the Effective Date through
the end of the Company's fiscal quarter immediately preceding the taking of such
action; and (B) 100% of the aggregate net cash proceeds received by the Company
from the issue or sale of capital stock of the Company (other than redeemable
capital stock), including capital stock issued upon the conversion of
convertible Indebtedness issued on or after the Effective Date, in exchange for
outstanding Indebtedness, or from the exercise of options, warrants, or rights
to purchase capital stock of the Company to any Person other than to a
Subsidiary of the Company subsequent to the Effective Date (with the Company
being deemed, in the case of capital stock issued upon conversion or in exchange
for Indebtedness, to have received net cash proceeds equal to the principal
amount of the Indebtedness so converted or exchanged); provided, however, that
(1) the payment of any dividend within 60 calendar days after the date of
declaration thereof, if such declaration complied with the foregoing redemption
or other acquisition provisions on the date of such declaration, (2) the
purchase, redemption, or other acquisition or retirement for value of any shares
of capital stock of the Company in exchange for, or out of the proceeds of, a
substantially concurrent issue and sale (other than to a Subsidiary of the
Company) of other shares of capital stock (other than redeemable capital stock)
of the Company, and (3) any purchase, redemption or other acquisition or
retirement for value of any capital stock (including any option, warrant, or
right to purchase capital stock) of the Company issued to any employee or
director of the Company pursuant to any employee benefit or similar plan shall
not be deemed to constitute "Restricted Payments" and shall not be prohibited
under this Section.

Section 3.4.      Change of Control.

         (a) Right to Require Repurchase. In the event that there shall occur a
Change of Control, then each Holder shall have the right, at such Holder's
option, to require the Company to repurchase all or any designated part of such
Holder's Senior Secured Notes on the date (the "Repurchase Date") selected by
the Company that is not more than 75 days after the date the Company gives
notice of the Change of Control as contemplated in paragraph (b) below at a
price (the "Repurchase Price") equal to 101% of the outstanding principal amount
thereof, plus accrued and unpaid interest to the Repurchase Date. Such right to
require the repurchase of Senior Secured Notes shall continue notwithstanding a
discharge of the Company from its obligations with respect to the Senior Secured
Notes in accordance with the provisions of Article VI or Article XIII of the
Indenture.

         (b) Notice; Method of Exercising Repurchase Right. On or before the
fifteenth day after the Company knows that a Change of Control has occurred, the
Company or, at the request of the Company, the Trustee (in the name of and at
the expense of the Company), shall give notice of the occurrence of the Change
of Control and of the repurchase right set forth herein arising as a result
thereof by first-class mail, postage prepaid, to each Holder of the Senior
Secured Notes at such Holder's address appearing in the Security Register for
the Senior Secured Notes. The Company shall also deliver a copy of such notice
to the Trustee.

                  Each notice of a repurchase right shall state:

                           (1) the Repurchase Date,

                           (2) the date by which the repurchase right must be
                               exercised,

                           (3) the Repurchase Price, and

                           (4) the instructions a Holder must follow to exercise
                               its repurchase right.

                  No failure of the Company to give the foregoing notice shall
limit any Holder's right to exercise its repurchase right. The Trustee shall
have no affirmative obligation to determine if there shall have occurred a
Change of Control. To exercise a repurchase right, a Holder shall deliver to the
Company (or to an agent designated by the Company for such purpose in the notice
referred to above) on or before the fifth Business Day prior to the Repurchase
Date (i) written notice of the Holder's exercise of such right, which notice
shall set forth the name of the Holder, the principal amount of the Senior
Secured Note (or portion of the Senior Secured Note) to be repurchased and a
statement that an election to exercise the repurchase right is being made
thereby, and (ii) the Senior Secured Note with respect to which the repurchase
right is being exercised, duly endorsed for transfer to the Company. Such
written notice shall be irrevocable. If the Repurchase Date falls between any
Regular Record Date and the corresponding succeeding Interest Payment Date,
Senior Secured Notes to be repurchased must be accompanied by payment from the
Holder of an amount equal to the interest thereon which the registered Holder
thereof is to receive on such Interest Payment Date. In the event a repurchase
right shall be exercised in accordance with the terms hereof and the
instructions referred to herein, (x) the Company shall on the Repurchase Date
pay or cause to be paid in cash to the Holder thereof the Repurchase Price for
each Senior Secured Note (or any portion thereof) as to which the repurchase
right has been exercised, and (y) the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such Senior
Secured Note without service charge, a new Senior Secured Note or Notes, as
applicable, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for any portion of the
principal of such Senior Secured Note as to which the repurchase right has not
been exercised. Any questions as to the compliance by a Holder of Senior Secured
Notes with the requirements for a valid exercise of a repurchase right
(including the timely delivery of an exercise notice in proper form) shall be
determined by the Company in its sole discretion, which in all events shall be
exercised in good faith.

         (c) Deposit of Repurchase Price. On or prior to the Repurchase Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 7.03 of the Indenture) an amount of money sufficient to pay
the Repurchase Price of the Senior Secured Notes which are to be repurchased on
the Repurchase Date.

         (d) Senior Secured Notes Not Repurchased on Repurchase Date. If any
Senior Secured Note (or any portion thereof) surrendered for repurchase shall
not be so paid on the Repurchase Date, the principal of such Senior Secured Note
(or such portion thereof) shall, until paid, bear interest from the Repurchase
Date at the rate borne by such Senior Secured Note.

         (e) Compliance. The Company shall comply with all tender offer rules,
including but not limited to Section 14(e) of the Exchange Act and Rule 14e-1
thereunder, to the extent applicable to any repurchase of the Senior Secured
Notes under this Section 3.4.

Section 3.5.      Payment Restrictions Affecting Subsidiaries.

         The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist any
contractual restriction on the ability of any Subsidiary of the Company to (a)
pay any dividend on, or make any other distribution on account of, its capital
stock or pay any Indebtedness owed to the Company or a Subsidiary of the Company
or (b) make loans or advances to the Company or a Subsidiary of the Company.

Section 3.6.      Issuance of Subsidiary Preferred Stock.

         The Company shall not permit any Subsidiary of the Company to issue any
shares of preferred stock.

Section 3.7.      Asset Sales.

         The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, conduct any Asset Sale, except for the sale of the
Company's proprietary credit card receivable portfolio, unless (i) such Asset
Sale is for fair market value (as evidenced by a resolution by the Company's
Board of Directors, certified by an officer of the Company and delivered to the
Trustee) and (ii) at least 85% of the consideration received by the Company in
such Asset Sale is in the form of cash. All net cash proceeds realized from any
Asset Sale (after taxes, reasonable fees and expenses incurred directly
therewith and any Indebtedness secured hereby), including the receipt of funds
from any federal or state income tax refund, in excess of $40,000,000 in the
aggregate for such Asset Sale or income tax refunds and all other Asset Sales or
income tax refunds occurring within the immediately preceding 360 day period
will be paid to the Trustee within 60 days of the receipt of the proceeds to
redeem Securities issued under the Indenture in accordance with the terms of the
Indenture.

Section 3.8.      Transactions with Affiliates.

         The Company shall not, and shall not permit any of its Subsidiaries to,
engage in any transaction with an Affiliate (other than the Company or a wholly
owned Subsidiary thereof) on terms more favorable to the Affiliate than would
have been obtainable in arm's-length dealing. Solely for purposes of this
Section 3.8, an "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person, or any other Person that has a
relationship with such specified Person whereby either of such Persons holds or
beneficially owns 10% or more of the equity interest in the other or 10% or more
of any class of voting securities of the other. For the purposes of this
definition, "control" when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

Section 3.9.      Change in Business.

         The Company shall not, and shall not permit any of its Subsidiaries to,
engage in any material line of business substantially different from the Finance
Business.

                    ARTICLE IV. ADDITIONAL EVENTS OF DEFAULT.

Section 4.1.      Immediate Events of Default.

         Notwithstanding anything in Section 9.01 of the Indenture to the
contrary, if the Company defaults in the performance of, or breaches any,
covenant set forth in Article III (other than Section 3.8) of this Second
Supplemental Indenture or in Section 7.05 of the Indenture, such default or
breach shall immediately constitute an Event of Default, without giving effect
to any passage of time or notice or both.

                      ARTICLE V. REDEMPTION OF SECURITIES.

Section 5.1.      Right of Redemption.

         The Senior Secured Notes may be redeemed in accordance with the form of
note set forth herein.

Section 5.2.      Repurchase.

         The Company may at any time and from time to time purchase Senior
Secured Notes in the open market or otherwise at any price, and any Senior
Secured Notes so purchased shall be promptly surrendered to the Trustee for
cancellation and shall not be reissued.

                           ARTICLE VI. MISCELLANEOUS.

Section 6.1.      Reference to and Effect on the Indenture.

         This Second Supplemental Indenture shall be construed as supplemental
to the Indenture and all the terms and conditions of this Second Supplemental
Indenture shall be deemed to be part of the terms and conditions of the
Indenture. Except as set forth herein, the Indenture heretofore executed and
delivered is hereby (i) incorporated by reference in this Second Supplemental
Indenture and (ii) ratified, approved and confirmed.

Section 6.2.      Waiver of Certain Covenants.

         The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Article III hereof if the Holders of a
majority in principal amount of the Outstanding Senior Secured Notes shall, by
Act of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision or condition except to the extent
so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.

Section 6.3.      Supplemental Indenture May be Executed in Counterparts.

         This instrument 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.



<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.

[Seal]                               MFN FINANCIAL CORPORATION


                                     By:
                                     Name:
                                     Title:




                                     NORWEST BANK MINNESOTA, NATIONAL
                                     ASSOCIATION, AS TRUSTEE

                                     By:
                                     Name:
                                     Title:


                                                                    Exhibit 4(D)

                           COMPANY SECURITY AGREEMENT


         This Company Security Agreement dated as of March 23, 1999 (this
"Agreement"), is made by MFN Financial Corporation, a Delaware corporation (the
"Company"), in favor of Norwest Bank Minnesota, National Association, as trustee
for the Holders under the Indenture described below (in such capacity, the
"Trustee").

                             PRELIMINARY STATEMENTS:

         1. The Company is a party to the Indenture of even date with this
Agreement (as amended, restated, supplemented or otherwise modified from time to
time, the "Indenture"), with the Trustee, under which the Company will issue its
senior secured notes to the holders thereof and their successors and assigns.

         2. It is a condition precedent to the issuance of the senior secured
notes that the Company enter into this Agreement and grant to the Trustee, for
the benefit of itself and the holders of such senior secured notes the security
interests provided in this Agreement to secure the obligations of the Company
described below.

                                   AGREEMENT:

         In consideration of the mutual agreements, provisions, covenants and
for other valuable consideration, the sufficiency of which is acknowledged, the
Company agrees as follows:

         SECTION 1.        DEFINITIONS; INTERPRETATION

         1.1 TERMS DEFINED IN THE INDENTURE. Unless otherwise defined in this
Agreement, capitalized terms used in this Agreement and not otherwise defined
have the meanings given to such terms from time to time in the Indenture.

         1.2 CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings:

                  "Accounts" means any and all "accounts," as such term is
         defined in the UCC, whether now existing or hereafter arising or
         acquired by the Company, and in any event includes all accounts
         receivable, contract rights, rights to payment and other obligations of
         any kind owed to the Company arising out of or in connection with the
         sale or lease of merchandise, goods or commodities or the rendering of
         services or arising from any other transaction, however evidenced, and
         whether or not earned by performance, all guaranties, indemnities and
         security with respect to the foregoing, and all letters of credit
         relating thereto, in each case whether now existing or hereafter
         acquired or arising.

                  "Agreement" has the meaning set forth in the preamble.

                  "Books" means all books, records and other written, electronic
         or other documentation in whatever form maintained now or hereafter by
         or for the Company in connection with the ownership of its assets or
         the conduct of its business or evidencing or containing information
         relating to the Collateral, including (i) ledgers, (ii) records
         indicating, summarizing, or evidencing the Company's assets (including
         Inventory and Rights to Payment), business operations or financial
         condition, (iii) computer programs and software, (iv) computer discs,
         tapes, files, manuals, spreadsheets, (v) computer printouts and output
         of whatever kind, (vi) any other computer prepared or electronically
         stored, collected or reported information and equipment of any kind and
         (vii) any and all other rights now or hereafter arising out of any
         contract or agreement between the Company and any service bureau,
         computer or data processing company or other Person charged with
         preparing or maintaining any of the Company's books or records or with
         credit reporting, including with regard to the Company's Accounts.

                  "Chattel Paper" means any "chattel paper," as such term is
         defined in the UCC, whether now existing or hereafter arising or
         acquired by the Company.

                  "Collateral" has the meaning specified in Section 2.1.

                  "Company" has the meaning set forth in the preamble.

                  "Deposit Account" means any demand, time, savings, passbook or
         like account now or hereafter maintained by or for the benefit of the
         Company with a bank, savings and loan association, credit union or like
         organization and all funds and amounts therein, whether or not
         restricted or designated for a particular purpose.

                  "Documents" means any and all "documents," as such term is
         defined in the UCC, including without limitation all documents of
         title, bills of lading, dock warrants, dock receipts, warehouse
         receipts and other documents of the Company, whether or not negotiable,
         and includes all other documents which purport to be issued by a bailee
         or agent and purport to cover goods in any bailee's or agent's
         possession which are either identified or are tangible portions of an
         identified mass, including such documents of title made available to
         the Company for the purpose of ultimate sale or exchange of goods or
         for the purpose of loading, unloading, storing, shipping,
         transshipping, manufacturing, processing or otherwise dealing with
         goods in a manner preliminary to their sale or exchange, in each case
         whether now existing or hereafter acquired or arising.

                  "Equipment" means all "equipment," as such term is defined in
         the UCC, whether now existing or hereafter acquired by the Company in
         all of its forms, wherever located, and in any event includes any and
         all machinery, furniture, equipment, furnishings and fixtures in which
         the Company now or hereafter acquires any right, and all other goods
         and tangible personal property (other than Inventory), including tools,
         parts and supplies, computer and other electronic data processing
         equipment and other office equipment, computer programs and related
         data processing software, and all additions, substitutions,
         replacements, parts, accessories, and accessions to and for the
         foregoing, now owned or hereafter acquired, and including any of the
         foregoing which are or are to become fixtures on real property.

                  "Financing Statements" has the meaning specified in Section 3.

                  "Fixtures" shall mean any "fixtures" as such term is defined
         in the UCC, whether now owned or hereafter acquired by the Company.

                  "General Intangibles" means any "general intangibles," as such
         term is defined in the UCC, whether now existing or hereafter arising
         or acquired by the Company, and in any event includes (i) all tax and
         other refunds, rebates or credits of every kind and nature to which the
         Company is now or hereafter may become entitled, (ii) all goodwill,
         choses in action and causes of action, whether legal or equitable,
         whether in contract or tort and however arising, (iii) all Intellectual
         Property Collateral, (iv) all uncertificated securities and interests
         in limited and general partnerships and limited liability companies,
         (v) all rights of stoppage in transit, replevin and reclamation, (vi)
         all licenses, permits, consents, indulgences and rights of whatever
         kind issued in favor of or otherwise recognized as belonging to the
         Company by any Governmental Authority and (vii) all indemnity
         agreements, guaranties, insurance policies and other contractual,
         equitable and legal rights of whatever kind or nature; in each case
         whether now existing or hereafter acquired or arising.

                  "Governmental Authority" means any nation or government, any
         state or other political subdivision thereof, any entity exercising
         executive, legislative, judicial, regulatory or administrative
         functions of or pertaining to government and any corporation or other
         entity owned or controlled, through stock or capital ownership or
         otherwise, by any of the foregoing.

                  "Indenture" has the meaning set forth in the first preliminary
         statement.

                  "Insolvency Default" means a Default under Section
         9.01(a)(vii) or Section 9.01(a)(viii) of the Indenture.

                  "Instruments" means any and all negotiable instruments,
         certificated securities and every other writing which evidences a right
         to the payment of money, in each case whether now existing or hereafter
         acquired by the Company.

                  "Intellectual Property Collateral" means the following
         properties and assets owned or held by the Company or in which the
         Company otherwise has any interest, now existing or hereafter acquired
         or arising:

         (A)      all patents and patent applications, domestic or foreign, all
                  licenses relating to any of the foregoing and all income and
                  royalties with respect to any licenses (including without
                  limitation such patents, patent applications and patent
                  licenses as described in Schedule E), present or future
                  infringement thereof, all rights arising therefrom and
                  pertaining thereto and all reissues, divisions, continuations,
                  renewals, extensions and continuations-in-part thereof;

         (B)      all copyrights and applications for copyright, domestic or
                  foreign, together with the underlying works of authorship
                  (including titles), whether or not the underlying works of
                  authorship have been published and whether said copyrights are
                  statutory or arise under the common law, and all other rights
                  and works of authorship, all rights, claims and demands in any
                  way relating to any such copyrights or works, including
                  royalties and rights to sue for past, present or future
                  infringement, and all rights of renewal and extension of
                  copyright;

         (C)      all state (including common law), federal and foreign
                  trademarks, service marks and trade names, and applications
                  for registration of such trademarks, service marks and trade
                  names, all licenses relating to any of the foregoing and all
                  income and royalties with respect to any licenses (including
                  without limitation such marks, names, applications and
                  licenses as described in Schedule E), whether registered or
                  unregistered and wherever registered, all rights to sue for
                  past, present or future infringement or unconsented use
                  thereof, all rights arising therefrom and pertaining thereto
                  and all reissues, extensions and renewals thereof;

         (D)      all trade secrets, confidential information, customer lists,
                  license rights, advertising materials, operating manuals,
                  methods, processes, know-how, sales literature, drawings,
                  specifications, blue prints, descriptions, inventions name
                  plates and catalogs; and

         (E)      the entire goodwill of or associated with the businesses now
                  or hereafter conducted by the Company connected with an
                  symbolized by any of the aforementioned properties and assets.

                  "Inventory" means any "inventory," as such term is defined in
         the UCC, wherever located, whether now owned or hereafter acquired by
         the Company, and in any event includes all goods (including goods in
         transit) which are held for sale, lease or other disposition, including
         those held for display or demonstration or out on lease or consignment
         or to be furnished under a contract of service, or which are raw
         materials, work in process, finished goods or materials used or
         consumed in the Company's business, and the resulting product or mass,
         and all repossessed, returned, rejected, reclaimed and replevied goods,
         together with all parts, components, supplies, packing and other
         materials used or usable in connection with the manufacture,
         production, packing, shipping, advertising, selling or furnishing of
         such goods; and all other items hereafter acquired by the Company by
         way of substitution, replacement, return, repossession or otherwise,
         and all additions and accessions thereto, and any Document representing
         or relating to any of the foregoing at any time.

                  "Investment Property" shall have the meaning ascribed thereto
         in Section 9-115 of the UCC in those jurisdictions in which such
         definition has been adopted and shall include without limitation (i)
         all securities, whether certificated or uncertificated, stocks, bonds,
         interests in limited liability companies, partnership interests,
         treasuries, certificates of deposit, and mutual fund shares, (ii) all
         securities entitlements of the Company including without limitation,
         the rights of the Company to any securities account of the Company and
         financial assets held by a securities intermediary in such securities
         account and any fee, credit balance or other money owing by any
         securities intermediary with respect to that account, (iii) all
         securities accounts held by the Company, (iv) all commodity contracts
         held by the Company and (v) all commodity accounts held by the Company.

                  "Lien" means any mortgage, deed of trust, pledge,
         hypothecation, assignment, collateral deposit arrangement, security
         interest, encumbrance for the payment of money, lien (statutory or
         other), preference, right of setoff, priority or other security
         agreement or preferential arrangement of any kind or nature whatsoever,
         including, without limitation, any conditional sale or other title
         retention agreement, the interest of a lessor under a capital lease,
         any financing lease having substantially the same economic effect as
         any of the foregoing, and the filing of any financing statement (other
         than a financing statement filed by a "true" lessor under Section 9-408
         of the UCC) naming the owner of the asset to which such Lien relates as
         debtor, under the UCC or other comparable law of any jurisdiction.

                  "Majority Holders" means Holders having at least 25% in
         principal amount of the Outstanding Securities.

                  "Permitted Lien" has the meaning set forth in the First
         Supplemental Trust Indenture of even date with this Agreement between
         the Company and the Trustee.

                  "Proceeds" means "proceeds," as such term is defined in the
         UCC, and in any event, includes whatever is receivable or received from
         or upon the sale, lease, license, collection, use, exchange or other
         disposition, whether voluntary or involuntary, of any Collateral or
         other assets of the Company, any and all proceeds of any insurance,
         indemnity, warranty or guaranty payable to or for the account of the
         Company from time to time with respect to any of the Collateral, any
         and all payments (in any form whatsoever) made or due and payable to
         the Company from time to time in connection with any requisition,
         confiscation, condemnation, seizure or forfeiture of all or any part of
         the Collateral by any Governmental Authority (or any Person acting
         under color of Governmental Authority), any and all other amounts from
         time to time paid or payable under or in connection with any of the
         Collateral or for or on account of any damage or injury to or
         conversion of any Collateral by any Person, any and all other tangible
         or intangible property received upon the sale or disposition of
         Collateral, and all proceeds of proceeds.

                  "Rights to Payment" means all Accounts, and any and all rights
         and claims to the payment or receipt of money or other forms of
         consideration of any kind in, to and under all Chattel Paper,
         Documents, General Intangibles, Instruments and Proceeds.

                  "Secured Obligations" means all Indenture Obligations (as
         defined in the Indenture).

                  "Transaction Documents" means the Indenture, the Collateral
         Security Documents and any and all other agreements, instruments and
         documents executed or delivered in connection therewith.

                  "Trustee" has the meaning set forth in the preamble.

                  "UCC" means the Uniform Commercial Code as the same may, from
         time to time, be in effect in the State of New York; provided, in the
         event that, by reason of mandatory provisions of law, any or all of the
         attachment, perfection or priority of the security interest in any
         Collateral is governed by the Uniform Commercial Code as in effect in a
         jurisdiction other than the State of New York, the term "UCC" shall
         mean the Uniform Commercial Code as in effect in such other
         jurisdiction for purposes of the provisions hereof relating to such
         attachment, perfection or priority and for purposes of definitions
         related to such provisions.

         1.3 TERMS DEFINED IN UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.

         SECTION 2.        SECURITY INTEREST

         2.1 GRANT OF SECURITY INTEREST. As security for the payment and
performance of the Secured Obligations, and to induce the Trustee to enter into
the Indenture and the Holders to accept and exchange the Securities and to
authenticate the Securities as provided therein, the Company grants, pledges,
assigns, transfers, hypothecates and sets over to the Trustee for the benefit of
itself and the Holders, a security interest in all of the Company's right, title
and interest in, to and under the following property, wherever located and
whether now existing or owned or hereafter acquired or arising (collectively,
the "Collateral"): (i) all Accounts; (ii) all Chattel Paper; (iii) all Deposit
Accounts; (iv) all Documents; (v) all General Intangibles; (vi) all Instruments;
(vii) all Books; (viii) all Fixtures; (ix) all Investment Property; (x) all
Equipment, (xi) all Inventory, (xii) all money, cash or cash equivalents; and
(xiii) all products and Proceeds of any and all of the foregoing; provided, that
the Collateral will not include (a) General Intangibles which by their terms are
unassignable to the extent that consent to such an assignment is not obtained
and (b) intent to use trademark applications to the extent such trademark
applications would be void or voidable as a result of the pledge and collateral
assignment hereunder.

         2.2 COMPANY REMAINS LIABLE. Anything herein to the contrary
notwithstanding, (i) the Company shall remain liable under any contracts,
agreements and other documents included in the Collateral, to the extent set
forth therein, to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (ii) the exercise by the
Trustee of any of the rights hereunder shall not release the Company from any of
its duties or obligations under such contracts, agreements and other documents
included in the Collateral and (iii) neither the Trustee nor any Holder shall
have any obligation or liability under any contracts, agreements and other
documents included in the Collateral by reason of this Agreement, nor shall the
Trustee or any Holder be obligated to perform any of the obligations or duties
of the Company thereunder or to take any action to collect or enforce any such
contract, agreement or other document included in the Collateral hereunder.

         2.3 CONTINUING SECURITY INTEREST. The Company agrees that this
Agreement shall create a continuing security interest in the Collateral which
shall remain in effect until terminated in accordance with Section 11.15.

         SECTION 3.        FINANCING STATEMENTS ETC.

         The Company shall execute, deliver, file and record concurrently with
the execution of this Agreement, and at any time and from time to time
thereafter, all financing statements, continuation financing statements,
termination statements, security agreements, chattel mortgages, assignments,
patent, copyright and trademark collateral assignments, fixture filings, blocked
account agreements, warehouse receipts, documents of title, affidavits, reports,
notices, schedules of account, letters of authority and all other documents and
instruments, in form satisfactory to the Trustee (the "Financing Statements"),
and take all other action, at the Company's expense, to perfect and continue
perfected, maintain the priority of or provide notice of the Trustee's security
interest in the Collateral and to accomplish the purposes of this Agreement.

         SECTION 4.        REPRESENTATIONS AND WARRANTIES

         In addition to and not in limitation of the representations and
warranties of the Company set forth in the Indenture, the Company represents and
warrants to the Trustee that:

         4.1 LOCATION OF CHIEF EXECUTIVE OFFICE AND COLLATERAL. The Company's
chief executive office, corporate office and principal place of business is
located at the address set forth in Schedule A, and all other locations where
the Company conducts business or Collateral is kept are set forth in Schedule A.

         4.2 LOCATIONS OF BOOKS. All locations where Books pertaining to the
Rights to Payment are kept, including all equipment necessary for accessing such
Books and the names and addresses of all service bureaus, computer or data
processing companies and other Persons keeping any Books or collecting Rights to
Payment for the Company, are set forth in Schedule B.

         4.3 TRADE NAMES AND TRADE STYLES. All trade names and trade styles
under which the Company presently conducts its business operations are set forth
in Schedule C, and, except as set forth in Schedule C, the Company has not, at
any time during the preceding five years (i) been known as or used any other
corporate, trade or fictitious name, (ii) changed its name, (iii) been the
surviving or resulting corporation in a merger or consolidation or (iv) acquired
through asset purchase or otherwise any business of any Person.

         4.4 OWNERSHIP OF COLLATERAL. The Company is, and, except as permitted
by Section 5.9, will continue to be, the legal and beneficial owner of the
Collateral (or, in the case of after-acquired Collateral, at the time the
Company acquires rights in such Collateral, will be the legal and beneficial
owner thereof), and has good, indefeasible and merchantable title to the
Collateral free and clear of any and all Liens other than Permitted Liens.

         4.5 ENFORCEABILITY; PRIORITY OF SECURITY INTEREST. (i) This Agreement
creates a valid and continuing security interest which is enforceable against
the Collateral in which the Company now has rights and will create a security
interest which is enforceable against the Collateral in which the Company
hereafter acquires rights at the time the Company acquires any such rights and
(ii) subject to Permitted Liens and assuming the filing by the Company of the
Financing Statements, the possession of Instruments and the control over
Investment Property, the Trustee has a perfected and first priority security
interest in the Collateral in which the Company now has rights, and will have a
perfected and first priority security interest in the Collateral in which the
Company hereafter acquires rights at the time the Company acquires any such
rights, in each case for the Trustee's own benefit or for the benefit of the
Holders, and in each case securing the payment and performance of the Secured
Obligations. All action necessary or desirable to protect and perfect such
security interest in the existing Collateral under the UCC has been duly taken.

         4.6 OTHER FINANCING STATEMENTS. Other than (i) financing statements or
similar filings naming the owner of the asset to which such lien relates as
debtor, under the UCC or any comparable law ("UCC Financing Statements")
disclosed to the Trustee and filed in connection with the Permitted Liens and
(ii) UCC Financing Statements in favor of the Trustee in its capacity as Trustee
for the benefit of itself and the Holders under the Indenture and any other
Transaction Documents, no effective UCC Financing Statement naming the Company
as debtor, assignor, grantor, mortgagor, pledgor or the like and covering all or
any part of the Collateral is on file in any filing or recording office in any
jurisdiction.

         4.7 RIGHTS TO PAYMENT. The Rights to Payment represent valid, binding
and enforceable obligations of the account debtors or other Persons obligated
thereon, representing undisputed, bona fide transactions completed in accordance
with the terms and provisions contained in any documents related thereto, and
are and will be genuine, free from Liens other than Permitted Liens, and not
subject to any adverse claims, counterclaims, setoffs, defaults, disputes,
defenses, discounts, retainages, holdbacks or conditions precedent of any kind
of character, except to the extent permitted under the Indenture and for
ordinary course setoffs and asserted claims or to the extent, if any, that such
account debtors or other Persons may be entitled to normal and ordinary course
trade discounts, returns, adjustments and allowances in accordance with Section
5.15, or as otherwise disclosed to the Trustee in writing;

         (A)      the Company has not assigned any of its rights under the
                  Rights to Payment except as provided in this Agreement or as
                  set forth in the Indenture or other Transaction Documents; and

         (B)      the Company has no knowledge of any fact or circumstance which
                  would impair the validity or collectibility of any of the
                  Rights to Payment.

         4.8 INVENTORY. With respect to any Inventory in which the Trustee is
granted a security interest pursuant to the terms of this Agreement, (i) such
Inventory is located at the locations set forth on Schedule A, (ii) no Inventory
is now, or shall at any time or times hereafter be stored with a bailee,
warehouseman or similar party (except as disclosed on Schedule D) without the
Trustee's prior written consent, and if the Trustee gives such written consent,
the Company will concurrently therewith at the Trustee's reasonable request use
its best efforts to cause any such bailee, warehouseman or similar party to
issue and deliver to the Trustee in form and substance acceptable to the
Trustee, warehouse receipts therefor in the Trustee's name, (iii) such Inventory
is of good and merchantable quality, free from any material defects, (iv) such
Inventory is not subject to any licensing, patent, royalty, trademark, trade
name or copyright agreements with any third parties which would require any
consent of any third party upon sale or disposition of that Inventory or the
payment of any monies to any third party as a precondition of such sale or other
disposition and (v) the completion of manufacture, sale or other disposition of
such Inventory by the Trustee following a Default or an Event of Default will
not require the consent of any Person and will not constitute a breach or
default under any contract or agreement to which the Company is a party or to
which such Inventory is subject.

         4.9 INTELLECTUAL PROPERTY. Except as set forth in Schedule E, the
Company does not own, possess or use under any licensing arrangement any
patents, copyrights, trademarks, service marks or trade names, nor is there
currently pending before any Governmental Authority any application for
registration of any patent, copyright, trademark, service mark or trade name;

         (A)      all patents, copyrights, trademarks, service marks and trade
                  names are subsisting and none have been adjudged invalid or
                  unenforceable in whole or in part;

         (B)      all maintenance fees required to be paid on account of any
                  patents have been timely paid for maintaining such patents in
                  force, and, to the Company's knowledge, each of the patents is
                  valid and enforceable;

         (C)      to the Company's knowledge after due inquiry, no material
                  infringement or unauthorized use presently is being made of
                  any Intellectual Property Collateral by any Person;

         (D)      the Company is the sole and exclusive owner of the
                  Intellectual Property Collateral identified on Schedule E
                  (other than Intellectual Property Collateral licensed by the
                  Company) and the past, present and contemplated future use of
                  such Intellectual Property Collateral by the Company has not,
                  does not and will not infringe or violate any right, privilege
                  or license agreement of or with any other Person; and

         (E)      the Company either owns, has material rights under, is a party
                  to, or an assignee of a party to all material licenses,
                  patents, patent applications, copyrights, service marks,
                  trademarks, trademark applications, trade names and all other
                  Intellectual Property Collateral necessary to continue to
                  conduct its business as heretofore conducted.

         4.10 EQUIPMENT. None of the Equipment or other Collateral is affixed to
real property, except Collateral with respect to which the Company has made all
fixture filings required to perfect and protect the priority of the Trustee's
security interest in all such Collateral which may be fixtures as against all
Persons having an interest in the premises to which such property may be
affixed.

         4.11 DEPOSIT ACCOUNTS. The names and addresses of all financial
institutions at which the Company maintains its Deposit Accounts, and the
account numbers and account names of such Deposit Accounts, are set forth in
Schedule F.

         4.12 CHATTEL PAPER AND INSTRUMENTS. All action necessary to protect and
perfect the security interest of the Trustee in all Instruments (including the
delivery of all originals thereof to the Trustee) has been duly taken. With
respect to Chattel Paper in which the Trustee is granted a security interests
under the terms of this Agreement:

         (A)      all action necessary to protect and perfect the security
                  interest in the specific goods underlying Chattel Paper has
                  been duly taken;

         (B)      all original documentation evidencing Chattel Paper is in the
                  possession of the Company; and

         (C)      all original documentation evidencing Chattel Paper has been
                  marked with a legend as described in Section 5.13.

         SECTION 5.        COVENANTS

         In addition to and not in limitation of the covenants of the Company
set forth in the Indenture, so long as any of the Secured Obligations remain
unsatisfied, the Company agrees that:

         5.1 DEFENSE OF COLLATERAL. The Company will defend the Collateral
against all claims and demands of all Persons at any time claiming the same or
any interest therein adverse to the Trustee other than holders of Permitted
Liens.

         5.2 PRESERVATION OF COLLATERAL. The Company shall maintain, preserve
and protect the Collateral which is used or useful in its business in good
working order and condition, ordinary wear and tear excepted and make all
necessary repairs thereto and renewals and replacements thereof except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, except as permitted by the Indenture.

         5.3 COMPLIANCE WITH LAWS, ETC. The Company will comply with all
requirements of law of any Governmental Authority having jurisdiction over it or
its business (including the Federal Fair Labor Standards Act) relating in a
material way to the possession, operation, maintenance and control of the
Collateral, except such as may be contested in good faith or as to which a bona
fide dispute may exist and except to the extent that noncompliance could not
reasonably be expected to materially adversely effect the value of the
Collateral or the worth of the Collateral as Collateral Security or have a
Material Adverse Effect.

         5.4 LOCATION OF BOOKS AND CHIEF EXECUTIVE OFFICE. The Company will (i)
keep all Books pertaining to the Rights to Payment at the locations set forth in
Schedule B and (ii) give at least thirty days' prior written notice to the
Trustee of (a) any changes in any such location where Books pertaining to the
Rights to Payment are kept, including any change of name or address of any
service bureau, computer or data processing company or other Person preparing or
maintaining any Books or collecting Rights to Payment for the Company or (b) any
changes in the location of the Company's chief executive office or principal
place of business.

         5.5 LOCATION OF COLLATERAL AND DEPOSIT ACCOUNTS. The Company will (i)
keep the Collateral at the locations set forth in Schedule A or Schedule D and
not remove the Collateral from such locations (other than Collateral in transit
between locations listed in Schedule A or Schedule D in the ordinary course of
business and disposals of Collateral permitted by clause (i) below) except upon
at least thirty days' prior written notice of any removal to the Trustee, (ii)
give the Trustee at least thirty days' prior written notice of any change in the
locations set forth in Schedule A or Schedule D and (iii) give the Trustee at
least thirty days' prior written notice of the creation and maintenance of any
Deposit Account not set forth on Schedule F.

         5.6 CHANGE IN NAME, IDENTITY OR STRUCTURE. The Company will give the
Trustee at least thirty days' prior written notice of (i) any change in name,
(ii) any changes in, additions to or other modifications of its trade names and
trade styles set forth in Schedule C and (iii) any changes in its identity or
structure in any manner which might make any Financing Statement filed hereunder
incorrect or misleading in such a manner as would require the refiling of
Financing Statements under the UCC.

         5.7 MAINTENANCE OF RECORDS. The Company will keep accurate and complete
Books with respect to the Collateral, and shall legend the Books pertaining to
such Collateral with an appropriate disclosure of the Trustee's security
interest hereunder.

         5.8 DISPOSITION OF COLLATERAL. The Company will not surrender or lose
possession of (other than to the Trustee), sell, lease, rent, or otherwise
dispose of or transfer any of the Collateral or any right or interest therein,
except to the extent permitted by the Indenture.

         5.9 LIENS. Other than liens in favor of the Trustee in its capacity as
Trustee under the Indenture and Permitted Liens, the Company will keep the
Collateral free of all Liens.

         5.10 EXPENSES. The Company will maintain, keep and preserve the
Collateral at its own cost and expense in accordance with its customary business
practices.

         5.11 LEASED PREMISES. At the Trustee's request, the Company will use
its best efforts to obtain from each Person from whom the Company leases any
premises at which any Collateral is at any time present such subordination,
waiver, consent and estoppel agreements as the Trustee may reasonably require,
in form and substance reasonably satisfactory to the Trustee.

         5.12     RIGHTS TO PAYMENT.  The Company will:

         (A)      with such frequency as the Trustee may reasonably require upon
                  the occurrence and during the continuance of an Insolvency
                  Default or an Event of Default, furnish to the Trustee (i)
                  master customer listings, including all names and addresses,
                  together with copies or originals (as requested by the
                  Trustee) of documents, customer statements, repayment
                  histories and present status reports relating to the Accounts,
                  (ii) accurate records and summaries of Accounts, including
                  detailed agings specifying the name, face value and date of
                  each invoice, and listings of Accounts that are disputed or
                  have been canceled and (iii) such other matters and
                  information relating to the Accounts as the Trustee shall from
                  time to time reasonably request;

         (B)      in accordance with its sound business judgment perform and
                  comply in all material respects with its obligations in
                  respect of the Accounts and other Rights to Payment;

         (C)      upon the request of the Trustee (i) at any time, notify all or
                  any designated portion of the account debtors and other
                  obligors on the Rights to Payment of the security interest
                  hereunder and (ii) if an Insolvency Default or an Event of
                  Default has occurred and is continuing, notify the account
                  debtors and other obligors on the Rights to Payment or any
                  designated portion thereof that payment shall be made directly
                  to the Trustee or to such other Person or location as the
                  Trustee shall specify; and

         (D)      establish such lockbox, blocked account or similar
                  arrangements for the payment of the Accounts and other Rights
                  to Payment as the Trustee shall require.

         5.13 DOCUMENTS ETC. The Company will (i) immediately deliver to the
Trustee, or an agent designated by it, appropriately endorsed or accompanied by
appropriate instruments of transfer or assignment, all Documents and Instruments
and all other Rights to Payment at any time evidenced by promissory notes, trade
acceptances or other instruments and (ii) mark all Documents and Chattel Paper
with the following legend: "This writing and the obligations evidenced or
secured hereby are subject to the security interest of Norwest Bank Minnesota,
National Association, as trustee, for the benefit of itself and certain
holders." With respect to Chattel Paper in which the Trustee is granted a
security interests under the terms of this Agreement, the Company will

         (A)      take all action necessary to protect and perfect the security
                  interest in the specific goods underlying Chattel Paper;

         (B)      take possession of all original documentation evidencing
                  Chattel Paper; and

         (C)      not sell or transfer any Chattel Paper, whether in the
                  ordinary course of business or otherwise.

         5.14     INVENTORY.  The Company will:

         (A)      at such times as the Trustee shall reasonably request but in
                  any event not more than once each fiscal year, prepare and
                  deliver to the Trustee a report of all Inventory, in form and
                  substance satisfactory to the Trustee; and

         (B)      upon the request of the Trustee after an Insolvency Default or
                  an Event of Default has occurred and is continuing, take a
                  physical listing of the Inventory and promptly deliver a copy
                  of such physical listing to the Trustee.

         5.15     EQUIPMENT.  The Company will:

         (A)      upon the Trustee's reasonable request but in any event not
                  more than once each fiscal year, prepare and deliver to the
                  Trustee a report of each item of Equipment, in form and
                  substance satisfactory to the Trustee; and

         (B)      upon the request of the Trustee after an Insolvency Default or
                  an Event of Default has occurred and is continuing, take a
                  physical listing of the Equipment and promptly deliver a copy
                  of such physical listing to the Trustee.

         5.16     INTELLECTUAL PROPERTY COLLATERAL.  The Company will:

         (A)      not enter into any agreements or transactions (including any
                  license or royalty agreement) pertaining to any Intellectual
                  Property Collateral except in the ordinary course of business;

         (B)      if reasonably within the Company's abilities, not allow or
                  suffer any Intellectual Property Collateral to become
                  abandoned, nor any registration thereof to be terminated,
                  forfeited, expired or dedicated to the public unless such
                  Intellectual Property Collateral is no longer useful or
                  necessary to the operation of its business;

         (C)      diligently prosecute all applications for patents, copyrights
                  and trademarks useful and necessary to the operation of its
                  business, and file and prosecute any and all continuations,
                  continuations-in-part, applications for reissue, applications
                  for certificate of correction and like matters as shall be
                  reasonable and appropriate in accordance with prudent business
                  practice, and promptly and timely pay any and all maintenance,
                  license, registration and other fees, taxes and expenses
                  incurred in connection with any Intellectual Property
                  Collateral; and

         (D)      provide the Trustee on a quarterly basis with a list of all
                  new applications and registrations for United States and
                  foreign patents, copyrights, trademarks, service marks or
                  trade names, which such new applications and registrations
                  shall be subject to the terms and conditions of the Indenture
                  and this Agreement.

         5.17 NOTICES, REPORTS AND INFORMATION. The Company will (i) furnish to
the Trustee such statements and schedules further identifying and describing the
Collateral and such other reports and other information in connection with the
Collateral as the Trustee may reasonably request, all in reasonable detail and
(ii) upon the reasonable request of the Trustee make such demands and requests
for information and reports as the Company is entitled to make in respect of the
Collateral.

         5.18 FURTHER ASSURANCES; PLEDGE OF INSTRUMENTS. At any time and from
time to time at the sole expense of the Company, the Company shall promptly and
duly execute and deliver any and all such further instruments and documents and
take such further actions as are necessary to obtain the full benefits of this
Agreement and of the rights and powers herein granted, including without
limitation (i) upon the written request of the Trustee, using its best efforts
to secure all consents and approvals necessary or appropriate for the assignment
to or for the benefit of the Trustee for the benefit of itself and the Holders,
of any license or contract held by the Company or to which the Company has any
rights not heretofore assigned, or any other General Intangible which by its
terms is unassignable, (ii) in accordance with Section 5.02 of the Indenture,
filing any financing or continuation statements under the UCC with respect to
the Liens and security interests granted hereunder or under any other
Transaction Document, (iii) transferring Collateral to the Trustee's possession
for the benefit of itself and the Holders (if a security interest in such
Collateral can be perfected only by possession, but not including any Collateral
consisting of Chattel Paper, which shall remain in the Company's possession in
accordance with Section 4.12 hereof) and (iv) using its best efforts to obtain
waivers of Liens, if any exist, from landlords and mortgagees in accordance with
the Indenture. The Company also hereby authorizes the Trustee, for the benefit
of itself and the Holders to file any such financing or continuation statements
without the signature of the Company to the extent permitted by applicable law.
If any amount payable under or in connection with any of the collateral is or
shall become evidenced by any Instrument, such Instruments, other than checks
and Securities received in the ordinary course of business, shall be duly
endorsed in a manner satisfactory to the Trustee immediately upon the Company's
receipt thereof.

         5.19 RIGHT OF INSPECTION. The Trustee, or any agent or employee
designated by the Trustee in writing, has the right, from time to time after the
date of this Agreement, to call at the Company's place or places of business (or
any other place where the Collateral or any information relating to the
Collateral is kept or located) during reasonable business hours and, without
unreasonable hindrance or delay, (i) to inspect, audit, check and make copies of
and extracts from the Company's books, records, journals, orders, receipts and
any correspondence and other data relating to the Company's business or to any
transactions between the parties thereto and (ii) to make such verification
concerning the Collateral as the Trustee may consider reasonable under the
circumstances.

         SECTION 6.        COLLECTION OF RIGHTS TO PAYMENT

         Until the Trustee exercises its rights hereunder to collect Rights to
Payment, the Company shall endeavor in the first instance diligently to collect
all amounts due or to become due on or with respect to the Rights to Payment. At
the request of the Trustee, upon and after the occurrence of any Default or
Event of Default, all remittances received by the Company shall be held in trust
for the Trustee and, in accordance with the Trustee's instructions, remitted to
the Trustee or deposited to an account with the Trustee in the form received
(with any necessary endorsements or instruments of assignment or transfer).

         SECTION 7.        AUTHORIZATION; TRUSTEE APPOINTED ATTORNEY-IN-FACT
         The Company hereby irrevocably constitutes and appoints the Trustee,
for the benefit of itself, the Holders and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Company and in the
name of the Company or in its own name, from time to time in the Trustee's sole
discretion for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute and deliver any and all documents
which may be necessary or desirable to accomplish the purposes of this Agreement
and, without limiting the generality of the foregoing, hereby grants to the
Trustee, for the benefit of itself and the Holders, the power and right, on
behalf of the Company, without notice to or assent by the Company, and at any
time, to do the following:

         (A)      sign any of the Financing Statements which must be executed or
                  filed to perfect or continue perfected, maintain the priority
                  of or provide notice of the Trustee's security interest in the
                  Collateral;

         (B)      take possession of and endorse any securities, acceptances,
                  checks, drafts, money orders or other forms of payment or
                  security and collect any Proceeds of any Collateral;

         (C)      sign and endorse any invoice or bill of lading relating to any
                  of the Collateral, warehouse or storage receipts, drafts
                  against customers or other obligors, assignments, notices of
                  assignment, verifications and notices to customers or other
                  obligors;

         (D)      notify the United States Postal Service authorities to change
                  the address for delivery of mail addressed to the Company to
                  such address as the Trustee may designate and, without
                  limiting the generality of the foregoing, establish with any
                  Person lockbox or similar arrangements for the payment of the
                  Rights to Payment;

         (E)      receive, open and dispose of all mail addressed to the
                  Company;

         (F)      send requests for verification of Rights to Payment to the
                  customers or other obligors of the Company;

         (G)      contact, or direct the Company to contact, all account debtors
                  and other obligors on the Rights to Payment and instruct such
                  account debtors and other obligors to make all payments
                  directly to the Trustee;

         (H)      assert, adjust, sue for, compromise or release any claims
                  under any policies of insurance;

         (I)      exercise dominion and control over, and refuse to permit
                  further withdrawals from, Deposit Accounts maintained with the
                  Trustee;

         (J)      notify each Person maintaining lockbox or similar arrangements
                  for the payment of the Rights to Payment to remit all amounts
                  representing collections on the Rights to Payment directly to
                  the Trustee;

         (K)      ask, demand, collect, receive and give acquittances and
                  receipts for any and all Rights to Payment, enforce payment or
                  any other rights in respect of the Rights to Payment and other
                  Collateral, grant consents, agree to any amendments,
                  modifications or waivers of the agreements and documents
                  governing the Rights to Payment and other Collateral, and
                  otherwise file any claims, take any action or institute,
                  defend, settle or adjust any actions, suits or proceedings
                  with respect to the Collateral, as the Trustee may deem
                  necessary or desirable to maintain, preserve and protect the
                  Collateral, to collect the Collateral or to enforce the rights
                  of the Trustee with respect to the Collateral;

         (L)      execute any and all applications, documents, papers and
                  instruments necessary for the Trustee to use the Intellectual
                  Property Collateral and grant or issue any exclusive or
                  non-exclusive license or sublicense with respect to any
                  Intellectual Property Collateral;

         (M)      execute any and all endorsements, assignments or other
                  documents and instruments necessary to sell, lease, assign,
                  convey or otherwise transfer title in or dispose of the
                  Collateral;

         (N)      execute any and all such other documents and instruments, and
                  do any and all acts and things for and on behalf of the
                  Company, which the Trustee may deem necessary or advisable to
                  maintain, protect, realize upon and preserve the Collateral;
                  and

         (O)      execute any and all such other documents and instruments, and
                  do any and all acts and things for and on behalf of the
                  Company, which the Trustee may reasonably deem necessary or
                  advisable to maintain, protect and preserve the Trustee's
                  security interest in the Collateral.

The Trustee agrees that, except upon and during the occurrence of an Insolvency
Default or an Event of Default, it shall not exercise the power of attorney, or
any rights granted to the Trustee, pursuant to clauses (B) through (N) above.
The Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys. The
foregoing power of attorney is coupled with an interest and irrevocable so long
as the Secured Obligations have not been paid and performed in full. The Company
hereby ratifies, to the extent permitted by law, all that the Trustee shall
lawfully and in good faith do or cause to be done by virtue of and in compliance
with this Section 7.

         SECTION 8.        TRUSTEE  PERFORMANCE OF COMPANY OBLIGATIONS

         After a Default or an Event of Default has occurred and is continuing,
Trustee may perform or pay any obligation which the Company has agreed to
perform or pay under or in connection with this Agreement, and the Company shall
reimburse the Trustee on demand for any amounts paid by the Trustee pursuant to
this Section 8.

         SECTION 9.        TRUSTEE'S DUTIES

         Notwithstanding any provision contained in this Agreement, but subject
to the following sentence and Section 5.07 of the Indenture, the Trustee shall
have no duty to exercise any of the rights, privileges or powers afforded to it
and shall not be responsible to the Company, any Holder (as defined in the
Indenture), subject to the Indenture and the Trust Indenture Act (as defined in
the Indenture), or any other Person for any failure to do so or delay in doing
so. Beyond the exercise of reasonable care to assure the safe custody of
Collateral in the Trustee's possession and the accounting for moneys actually
received by the Trustee hereunder, the Trustee shall have no duty or liability
to exercise or preserve any rights, privileges or powers pertaining to the
Collateral.

         SECTION 10.  REMEDIES

         10.1 REMEDIES. After an Event of Default has occurred and is
continuing, the Trustee shall have, in addition to all other rights and remedies
granted to it in this Agreement, the Indenture or any other Transaction
Document, all rights and remedies of a secured party under the UCC and other
applicable laws. Without limiting the generality of the foregoing, the Company
agrees that the Trustee may:

         (A)      peaceably and without notice enter any premises of the
                  Company, take possession of any the Collateral, remove or
                  dispose of all or part of the Collateral on any premises or
                  elsewhere, or, in the case of Equipment, render it
                  nonfunctional, and otherwise collect, receive, appropriate and
                  realize upon all or any part of the Collateral, and demand,
                  give receipt for, settle, renew, extend, exchange, compromise,
                  adjust, or sue for all or any part of the Collateral, as the
                  Trustee may determine;

         (B)      require the Company to assemble all or any part of the
                  Collateral and make it available to the Trustee at any place
                  and time designated by the Trustee;

         (C)      use or transfer any of the Company's rights and interests in
                  any Intellectual Property Collateral, by license, by
                  sublicense (to the extent permitted by an applicable license)
                  or otherwise, on such conditions and in such manner as the
                  Trustee may determine;

         (D)      secure the appointment of a receiver of the Collateral or any
                  part thereof to the extent and in the manner provided by
                  applicable law;

         (E)      withdraw (or cause to be withdrawn) any and all funds from
                  Deposit Accounts; and

         (F)      sell, resell, lease, use, assign, transfer or otherwise
                  dispose of any or all of the Collateral in its then condition
                  or following any commercially reasonable preparation or
                  processing (utilizing in connection therewith any of the
                  Company's assets, without charge or liability to the Trustee
                  therefor) at public or private sale, by one or more contracts,
                  in one or more parcels, at the same or different times, for
                  cash or credit, or for future delivery without assumption of
                  any credit risk, all as the Trustee deems advisable; provided,
                  that the Company shall be credited with the net proceeds of
                  sale only when such proceeds are finally collected by the
                  Trustee. The Trustee shall have the right upon any such public
                  sale, and, to the extent permitted by law, upon any such
                  private sale, to purchase the whole or any part of the
                  Collateral so sold, free of any right or equity of redemption,
                  which right or equity of redemption the Company hereby
                  releases, to the extent permitted by law. The Company hereby
                  agrees that the sending of notice by ordinary mail, postage
                  prepaid, to the address of the Company set forth in the
                  Indenture, of the place and time of any public sale or of the
                  time after which any private sale or other intended
                  disposition is to be made, shall be deemed reasonable notice
                  thereof if such notice is sent ten days prior to the date of
                  such sale or other disposition or the date on or after which
                  such sale or other disposition or the date on or after which
                  such sale or other disposition may occur; provided, that the
                  Trustee may provide the Company shorter notice or no notice,
                  to the extent permitted by the UCC or other applicable law.

         10.2 LICENSE. For the purpose of enabling the Trustee to exercise its
rights and remedies under this Section 10, the Company hereby grants, to the
extent it has the power and authority to do so, to the Trustee an irrevocable,
non-exclusive and assignable license (exercisable without payment or royalty or
other compensation to the Company) to use, license or sublicense any
Intellectual Property Collateral.

         10.3 PROCEEDS ACCOUNT. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated at such time as there
may exist an Insolvency Default or an Event of Default, the Trustee may, at its
election, (i) retain the proceeds of any sale, collection, disposition or other
realization upon the Collateral (or any portion thereof) in a special purpose
non-interest bearing restricted deposit account (the "Proceeds Account") created
and maintained by the Trustee for such purpose (which shall constitute a Deposit
Account included within the Collateral hereunder) until such time as the Trustee
may elect to apply such proceeds to the Secured Obligations, and the Company
agrees that such retention of such proceeds by the Trustee shall not be deemed
strict foreclosure with respect thereto, (ii) in any manner elected by the
Trustee, estimate the liquidated amount of any such contingent, unmatured or
unliquidated claims and apply the proceeds of the Collateral against such amount
or (iii) otherwise proceed in any manner permitted by applicable law. The
Company agrees that the Proceeds Account shall be a blocked account and that
upon the irrevocable deposit of funds into the Proceeds Account, the Company
shall not have any right of withdrawal with respect to such funds. Accordingly,
the Company irrevocably waives until the termination of the security interests
granted under this Agreement in accordance with Section 11.15 the right to make
any withdrawal from the Proceeds Account and the right to instruct the Trustee
to honor drafts against the Proceeds Account.

         10.4 APPLICATION OF PROCEEDS. Subject to Section 10.3, the cash
proceeds actually received from the sale or other disposition or collection of
Collateral upon the exercise of any remedy by the Trustee under this Section 10,
and any other amounts received in respect of the Collateral the application of
which is not otherwise provided for herein, shall be distributed to the Holders
pro rata and applied as follows:

         First: to the payment of the costs and expenses of such sale, including
         reasonable compensation to the Trustee and its agents and attorneys,
         and of any judicial or private proceedings in which such sale may be
         made, and of all other expenses, liabilities and advances made or
         incurred by the Trustee, together with interest on such costs, expenses
         and liabilities and on all advances made by the Trustee from the date
         any such cost, expense or liability is past due or unpaid or any such
         advance is made, in each case until paid in full;

         Second: to the payment of any other fees, costs or other expenses
         constituting obligations under the Transaction Documents other than
         amounts payable under clause "First" above, together with interest on
         each such amount at the interest rate(s) applicable to the Secured
         Obligations pursuant to and in accordance with the Indenture from and
         after the date such amount is due, owing or unpaid until paid in full;

         Third: to the payment of any interest then due, owing or unpaid in
         respect of any Security or any other Secured Obligation from the date
         such amount is due, owing or unpaid until paid in full to be applied in
         accordance with the Indenture;

         Fourth: to the payment of the whole amount of principal then due, owing
         or unpaid in respect of any Security or any other Secured Obligation
         secured by this Agreement, to be applied in accordance with the
         Indenture; and

         Fifth: the surplus, if any, to be paid to the Company or to whomever
         lawfully may be entitled to receive such surplus.

The Company shall remain liable to the Trustee for any deficiency which exists
after any sale or other disposition or collection of Collateral.

         SECTION 11.  MISCELLANEOUS

         11.1 CERTAIN WAIVERS. The Company waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of marshaling of
the Collateral or other collateral or security for the Secured Obligations, (ii)
any right to require the Trustee (a) to proceed against any Person, (b) to
exhaust any other collateral or security for any of the Secured Obligations, (c)
to pursue any remedy in the Trustee's power or (d) to make or give any
presentments, demands for performance, notices of nonperformance, protests,
notices of protests or notices of dishonor in connection with any of the
Collateral and (iii) all claims, damages, and demands against the Trustee
arising out of the repossession, retention, sale or application of the proceeds
of any sale of the Collateral.

         11.2 NOTICES. All notices or other communications hereunder shall be
given in the manner and to the addresses specified in the Indenture. All such
notices and other communications shall be effective (i) if delivered by hand or
pre-paid courier service, when delivered, (ii) if sent by mail, upon the earlier
of the date of receipt or five Business Days after deposit in the mail, first
class, postage prepaid, (iii) if sent by telex, upon receipt by the sender of an
appropriate answerback and (iv) if sent by facsimile transmission, upon receipt
of electronic confirmation of receipt.

         11.3 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of the
Trustee to exercise, and no delay in exercising, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative
and not exclusive of any rights, remedies, powers and privileges that may
otherwise be available to the Trustee.

         11.4     COSTS AND EXPENSES; INDEMNIFICATION; OTHER CHARGES.

         (A)      The Company shall pay, indemnify, and hold the Trustee, each
                  Holder and each of their respective Affiliates, officers,
                  directors, employees, counsel, agents and attorneys-in-fact
                  harmless from and against any and all liabilities,
                  obligations, losses, damages, penalties, actions, judgments,
                  suits, costs, charges, expenses or disbursements, of any kind
                  or nature whatsoever in accordance with the terms and
                  conditions of the Indenture except to the extent arising from
                  the Trustee's or such Holder's gross negligence, bad faith,
                  wilful misconduct or fraud.

         (B)      The Company agrees to indemnify the Trustee against and hold
                  it harmless from any and all present and future stamp,
                  transfer, or documentary taxes or any other excise or property
                  taxes, charges or similar levies which arise from any payment
                  made hereunder or from the execution, delivery, or
                  registration of, or otherwise with respect to, this Agreement.

         (C)      Any amounts payable to the Trustee and each Holder under this
                  Section 11.4 or otherwise under this Agreement if not paid
                  upon demand shall bear interest from the date of such demand
                  until paid in full, at the rate of interest set forth in the
                  Indenture for the Securities.

         11.5 BINDING EFFECT. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the Company and the Trustee, and their
respective successors and assigns; provided, that the Company may not assign any
of its rights hereunder or interests herein without the written consent of the
Trustee and the Majority Holders. The Company acknowledges that upon any
assignment or other transfer by the Trustee or any Holder of any of the Secured
Obligations, the Trustee or such Holder may transfer its interest herein, or any
part thereof, to the assignee or transferee, who shall thereupon become vested
with all the rights, remedies, powers, security interests and liens herein
granted to the Trustee or such Holder, or the transferred part thereof, subject,
however, to the restrictions contained herein. No Persons other than the
Company, the Holders, the Trustee and the respective assignees of the Holders
and the Trustee are intended to be benefited hereby or shall have any rights
hereunder, as third-party beneficiaries or otherwise.

         11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK; PROVIDED, THAT THE TRUSTEE
AND THE HOLDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

         11.7 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY AND THE TRUSTEE FOR
THE BENEFIT OF ITSELF AND THE HOLDERS EACH CONSENT, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE COMPANY AND
THE TRUSTEE FOR THE BENEFIT OF ITSELF AND THE HOLDERS EACH IRREVOCABLY WAIVE ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY AND THE TRUSTEE FOR THE
BENEFIT OF ITSELF AND THE HOLDERS, EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
NEW YORK LAW.

         11.8 WAIVER OF JURY TRIAL. THE COMPANY AND THE TRUSTEE FOR THE BENEFIT
OF ITSELF AND THE HOLDERS EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY AND THE
TRUSTEE FOR THE BENEFIT OF ITSELF AND THE HOLDERS EACH AGREE THAT ANY SUCH CLAIM
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION 11.8 AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.

         11.9 AMENDMENT. This Agreement shall not be amended except by the
written agreement of the parties as provided in the Indenture.

         11.10 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under all
applicable laws and regulations. If; however, any provision of this Agreement
shall be prohibited by or invalid under any such law or regulation in any
jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform
to the minimum requirements of such law or regulation, or, if for any reason it
is not deemed so modified, it shall be ineffective and invalid only to the
extent of such prohibition or invalidity without affecting the remaining
provisions of this Agreement, or the validity or effectiveness of such provision
in any other jurisdiction. This Agreement is to be read, construed and applied
together with the Indenture and the other Transaction Documents which, taken
together, set forth the complete understanding and agreement of the Trustee, the
Holders and the Company with respect to the matters referred to herein and
therein.

         11.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.

         11.12 NO INCONSISTENT REQUIREMENTS. The Company acknowledges that this
Agreement and the other Transaction Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms;
provided, in the event any terms or conditions contained herein conflict with
any term or condition set forth in the Indenture, such term or condition set
forth in the Indenture shall control.

         11.13 ENTIRE AGREEMENT. This Agreement (i) integrates all the terms and
conditions mentioned herein or incidental hereto, (ii) supersedes all oral
negotiations and prior writings with respect to the subject matter hereof and
(iii) is intended by the parties as the final expression of the Agreement with
respect to the terms and conditions set forth in this Agreement and as the
complete and exclusive statement of the terms agreed to by the parties.

         11.14 FURTHER ASSURANCES. The Company agrees upon the written request
of the Trustee or any Holder, to execute and deliver to the Trustee or such
Holder, from time to time, any additional instruments or documents reasonably
considered necessary by the Trustee or such Holder to cause this Agreement to
be, become or remain, valid and effective in accordance with its terms.

         11.15 THE INDENTURE. Anything in this Agreement to the contrary
notwithstanding, Section 5.02 of the Indenture is incorporated by reference
herein, mutatis mutandis.

         11.16 TERMINATION. Upon payment and performance in full of all Secured
Obligations, this Agreement and the security interests granted under this
Agreement shall terminate and the Trustee shall promptly execute and deliver to
the Company such documents and instruments reasonably requested by the Company
as shall be necessary to evidence termination of this Agreement and of all
security interests given by the Company to the Trustee hereunder; provided, that
the obligations of the Company under Section 11.4 shall survive such
termination.


                                    * * * * *

         Executed and delivered as of the date first above written.


                                     MFN FINANCIAL CORPORATION



                                     By:
                                     Name:
                                     Title:


                                     NORWEST BANK MINNESOTA, NATIONAL 
                                     ASSOCIATION, as Trustee



                                     By:
                                     Name:
                                     Title:


<PAGE>

                                   SCHEDULE A

                  LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER
                       LOCATIONS, INCLUDING OF COLLATERAL


         a. Chief Executive Office and Principal Place of Business:



         b. Other locations where Company conducts business or Collateral is
kept:



<PAGE>

                                   SCHEDULE B

               LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT



<PAGE>

                                   SCHEDULE C

 TRADE NAMES AND TRADE STYLES: OTHER CORPORATE, TRADE OR FICTITIOUS NAMES, ETC.




<PAGE>

                                   SCHEDULE D

         INVENTORY STORED WITH WAREHOUSEMEN OR ON LEASED PREMISES, ETC.





<PAGE>

                                   SCHEDULE E

                      PATENTS, COPYRIGHTS, TRADEMARKS, ETC.




<PAGE>

                                   SCHEDULE F

                                DEPOSIT ACCOUNTS


                                                                    Exhibit 4(E)

                            COMPANY PLEDGE AGREEMENT


         This Company Pledge Agreement dated as of March 23, 1999 (this
"Agreement"), is made by MFN Financial Corporation, a Delaware corporation (the
"Company"), in favor of Norwest Bank Minnesota, National Association, as trustee
for Holders under the Indenture described below (in such capacity, the
"Trustee").

                             PRELIMINARY STATEMENTS:

         1. The Company is a party to the Indenture of even date with this
Agreement (as amended, restated, supplemented or otherwise modified from time to
time, the "Indenture"), with the Trustee, under which the Company will issue its
senior secured notes to the holders thereof and their successors and assigns.

         2. It is a condition precedent to the issuance of the senior secured
notes that the Company enter into this Agreement and grant to the Trustee, for
the benefit of itself and the holders of such senior secured notes the security
interests provided in this Agreement to secure the obligations of the Company
described below.

                                   AGREEMENT:

         In consideration of the mutual agreements, provisions, covenants and
for other valuable consideration, the sufficiency of which is acknowledged, the
Company agrees as follows:

         SECTION 1.        DEFINITIONS; INTERPRETATION

         1.1 TERMS DEFINED IN THE INDENTURE. Unless otherwise defined in this
Agreement, capitalized terms used in this Agreement and not otherwise defined
have the meanings given to such terms from time to time in the Indenture.

         1.2 CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings:

                  "Agreement" has the meaning set forth in the preamble.

                  "Collateral" is defined in Section 2.1.

                  "Company" has the meaning set forth in the preamble.

                  "Distributions" means all stock dividends, liquidating
         dividends, shares of stock resulting from (or in connection with the
         exercise of) stock splits, reclassifications, warrants, options,
         non-cash dividends, mergers, consolidations, and all other
         distributions (whether similar or dissimilar to the foregoing) on or
         with respect to any Pledged Shares or other shares of capital stock
         constituting Collateral, but shall not include Dividends.

                  "Dividends" means cash dividends and cash distributions with
         respect to any Pledged Shares or other Pledged Property made in the
         ordinary course of business and not a liquidating dividend.

                   "Indenture" has the meaning set forth in the first
         preliminary statement.

                   "Insolvency Default" means a Default under Section
         9.01(a)(vii) or Section 9.01(a)(viii) of the Indenture.

                  "Pledged Property" means all Pledged Shares and all other
         pledged shares of capital stock, all assignments of any amounts due or
         to become due, all other instruments which are now being delivered by
         the Company to the Trustee or may from time to time hereafter be
         delivered by the Company to the Trustee for the purpose of pledge under
         this Agreement or any other Transaction Document, and all proceeds of
         any of the foregoing.

                  "Pledged Share Issuer" means each Person identified in
         Schedule I as the issuer of the Pledged Shares identified opposite the
         name of such Person; it being agreed that no insurance company shall be
         a Pledged Share Issuer.

                   "Pledged Shares" means all shares of capital stock of any
         Pledged Share Issuer.

                  "Company" is defined in the preamble.

                  "Transaction Documents" means the Indenture, the Collateral
         Security Documents and any and all other agreements, instruments and
         documents executed or delivered in connection therewith.

                  "Trustee" has the meaning set forth in the preamble.

                  "UCC" means the Uniform Commercial Code as the same may, from
         time to time, be in effect in the State of New York; provided, in the
         event that, by reason of mandatory provisions of law, any or all of the
         attachment, perfection or priority of the security interest in any
         Collateral is governed by the Uniform Commercial Code as in effect in a
         jurisdiction other than the State of New York, the term "UCC" shall
         mean the Uniform Commercial Code as in effect in such other
         jurisdiction for purposes of the provisions hereof relating to such
         attachment, perfection or priority and for purposes of definitions
         related to such provisions.

         1.3 TERMS DEFINED IN UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.

         SECTION 2.        PLEDGE

         2.1 GRANT OF SECURITY INTEREST. The Company pledges, hypothecates,
assigns, charges, mortgages, delivers, and transfers to the Trustee, for its
benefit and the ratable benefit of each of the Holders, and grants to the
Trustee, for its benefit and the ratable benefit of the Holders, a continuing
security interest in, all of the following property (the "Collateral"):

         (A)      all issued and outstanding shares of capital stock of each
                  Pledged Share Issuer identified on Schedule I;

         (B)      all other Pledged Shares issued from time to time;

         (C)      all other Pledged Property, whether now or hereafter delivered
                  to the Trustee in connection with this Agreement;

         (D)      all Dividends, Distributions, interest and other payments and
                  rights with respect to any Pledged Property; and

         (E)      all proceeds of any of the foregoing.

         2.2 SECURITY FOR INDENTURE OBLIGATIONS. This Agreement secures the
payment in full of all Indenture Obligations of the Company now or hereafter
existing under or in connection with the Indenture and each other Transaction
Document, including, without limitation, obligations for costs, fees and
expenses.

         2.3 DELIVERY OF PLEDGED PROPERTY. All certificates or instruments
representing or evidencing any Collateral, including all Pledged Shares, shall
be delivered to and held by or on behalf of the Trustee pursuant hereto, shall
be in suitable form for transfer by delivery, and shall be accompanied by all
necessary instruments of transfer or assignment, duly executed in blank.

         2.4 DIVIDENDS ON PLEDGED SHARES. Subject to Section 4.4, in the event
that any Dividend is to be paid on any Pledged Share, such Dividend or payment
shall be paid directly to the Trustee.

         2.5 CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing security interest in the Collateral and shall

         (A)      remain in full force and effect until payment in full of all
                  Indenture Obligations and the termination of the Indenture in
                  accordance with its terms,

         (B)      be binding upon the Company and its successors, transferees
                  and assigns, and

         (C)      inure, together with the rights and remedies of the Trustee
                  hereunder, to the benefit of the Trustee and each Holder.

Without limiting the foregoing clause (C) above, any Holder may assign or
otherwise transfer (in whole or in part) any Security held by it to any other
Person or entity, and such other Person or entity shall thereupon become vested
with all the rights and benefits in respect thereof granted to such Holder under
any Transaction Document (including this Agreement) or otherwise, subject,
however, to any contrary provisions in such assignment or transfer. Upon the
payment in full of all Indenture Obligations and the termination of the
Indenture in accordance with its terms, the security interest granted herein
shall terminate and all rights to the Collateral shall revert to the Company.
Upon any such termination, the Trustee will, at the Company's sole expense,
deliver to the Company, without any representations, warranties or recourse of
any kind whatsoever, all certificates and instruments representing or evidencing
all Pledged Shares, together with all other Collateral held by the Trustee
hereunder, and execute and deliver to the Company such documents as the Company
shall reasonably request to evidence such termination.

         SECTION 3.        REPRESENTATIONS AND WARRANTIES

         The Company represents and warrants unto each Holder and the Trustee,
as at the date of each pledge and delivery hereunder (including each pledge and
delivery of Pledged Shares) by the Company to the Trustee of any Collateral, as
set forth in this Section 3:

         3.1 OWNERSHIP, NO LIENS, ETC. The Company is the legal and beneficial
owner of, and has good and marketable title to (and has obtained full right and
authority to pledge and assign) such Collateral, free and clear of all liens,
security interests, options, or other charges or encumbrances, except any lien
or security interest granted pursuant hereto in favor of the Trustee. The
Company has obtained all comments and waivers necessary from other creditors to
avoid conflicts with other agreements.

         3.2 VALID SECURITY INTEREST. The delivery of such Collateral to the
Trustee is effective to create a valid, perfected, first priority security
interest in such Collateral and all proceeds thereof, securing the Indenture
Obligations. No filing or other action will be necessary to perfect or protect
such security interest.

         3.3 AS TO PLEDGED SHARES. In the case of any Pledged Shares
constituting such Collateral, all of such Pledged Shares are duly authorized and
validly issued, fully paid, and nonassessable, and constitute all of the issued
and outstanding shares of capital stock of each Pledged Share Issuer. The
Company has no Subsidiary other than the Pledged Share Issuers and insurance
companies.

         3.4 AUTHORIZATION, APPROVAL, ETC. No authorization, approval, or other
action by, and no notice to or filing with, any governmental authority,
regulatory body or any other Person is required either

         (A)      for the pledge by the Company of any Collateral pursuant to
                  this Agreement or for the execution, delivery, and performance
                  of this Agreement by the Company, or

         (B)      for the exercise by the Trustee of the voting or other rights
                  provided for in this Agreement, or, except with respect to any
                  Pledged Shares, as may be required in connection with a
                  disposition of such Pledged Shares by laws affecting the
                  offering and sale of securities generally, the remedies in
                  respect of the Collateral pursuant to this Agreement.

         3.5 COMPLIANCE WITH LAWS. The Company is in compliance with the
requirements of all applicable laws (including, without limitation, the
provisions of the Fair Labor Standards Act), rules, regulations and orders of
every governmental authority, the non-compliance with which could reasonably be
expected to have a Material Adverse Effect or materially adversely affect the
value of the Collateral or the worth of the Collateral as collateral security.

         SECTION 4.        COVENANTS

         4.1 PROTECT COLLATERAL: FURTHER ASSURANCES, ETC. The Company will not
sell, assign, transfer, pledge, or encumber in any other manner the Collateral
(except in favor of the Trustee hereunder). The Company will warrant and defend
the right and title herein granted unto the Trustee in and to the Collateral
(and all right, title, and interest represented by the Collateral) against the
claims and demands of all Persons whomsoever. The Company agrees that at any
time, and from time to time, at the expense of the Company, the Company will
promptly execute and deliver all further instruments, and take all further
action, that may be necessary or desirable, or that the Trustee may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Trustee to exercise and enforce
its rights and remedies hereunder with respect to any Collateral.

         4.2 STOCK POWERS, ETC. The Company agrees that all Pledged Shares (and
all other shares of capital stock constituting Collateral) delivered by the
Company pursuant to this Agreement will be accompanied by duly executed undated
blank stock powers, or other equivalent instruments of transfer acceptable to
the Trustee. The Company will, from time to time upon the request of the
Trustee, promptly deliver to the Trustee such stock powers, instruments, and
similar documents, satisfactory in form and substance to the Trustee, with
respect to the Collateral as the Trustee may reasonably request and will, from
time to time upon the request of the Trustee after the occurrence of any Event
of Default, promptly transfer any Pledged Shares or other shares of common stock
constituting Collateral into the name of any nominee designated by the Trustee.

         4.3 CONTINUOUS PLEDGE. The Company will, at all times, keep pledged to
the Trustee pursuant hereto all Pledged Shares and all other shares of capital
stock constituting Collateral, all Dividends and Distributions with respect
thereto, and all other Collateral and other securities, instruments, proceeds,
and rights from time to time received by or distributable to the Company in
respect of any Collateral.

         4.4      VOTING RIGHTS: DIVIDENDS, ETC.  The Company agrees:

         (A)      Dividends and Distributions may be paid to the Company in
                  respect of the Pledged Shares; provided, that the Company
                  shall not pay any Dividends or Distributions in respect of the
                  Company's capital stock; and

         (B)      after any Event of Default shall have occurred and be
                  continuing and the Trustee has notified the Company of the
                  Trustee's intention to exercise its voting power under this
                  Section 4.4(B):

                  (i)      the Trustee may exercise (to the exclusion of the
                           Company) the voting power and all other incidental
                           rights of ownership with respect to any Pledged
                           Shares or other shares of capital stock constituting
                           Collateral and the Company hereby grants the Trustee
                           an irrevocable proxy, exercisable under such
                           circumstances, to vote the Pledged Shares and such
                           other Collateral; and

                  (ii)     the Company shall promptly to deliver to the Trustee
                           such additional proxies and other documents as may be
                           necessary to allow the Trustee to exercise such
                           voting power.

All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by the Company but which the
Company is then obligated to deliver to the Trustee, shall, until delivery to
the Trustee, be held by the Company separate and apart from its other property
in trust for the Trustee. The Trustee agrees that unless an Insolvency Default
or an Event of Default shall have occurred and be continuing and the Trustee
shall have given the notice referred to in Section 4.4(B), the Company shall
have the exclusive voting power with respect to any shares of capital stock
(including any of the Pledged Shares) constituting Collateral and the Trustee
shall, upon the written request of the Company, promptly deliver such proxies
and other documents, if any, as shall be reasonably requested by the Company
which are necessary to allow the Company to exercise voting power with respect
to any such share of capital stock (including any of the Pledged Shares)
constituting Collateral; provided, that no vote shall be cast, or consent,
waiver, or ratification given, or action taken by the Company that would impair
any Collateral or be inconsistent with or violate any provision of the Indenture
or any other Transaction Document (including this Agreement).

         SECTION 5.        THE TRUSTEE

         5.1 TRUSTEE APPOINTED ATTORNEY-IN-FACT. The Company hereby irrevocably
appoints the Trustee the Company's attorney-in-fact, with full authority during
the continuance of an Insolvency Default or an Event of Default in the place and
stead of the Company and in the name of the Company or otherwise, from time to
time in the Trustee's discretion, to take any action and to execute any
instrument which the Trustee may deem necessary or advisable to accomplish the
purposes of this Agreement, including without limitation:

         (A)      to ask, demand, collect, sue for, recover, compromise, receive
                  and give acquittance and receipts for moneys due and to become
                  due under or in respect of any of the Collateral;

         (B)      to receive, endorse, and collect any drafts or other
                  instruments, documents and chattel paper, in connection with
                  clause (A) above; and

         (C)      to file any claims or take any action or institute any
                  proceedings which the Trustee may deem necessary or desirable
                  for the collection of any of the Collateral or otherwise to
                  enforce the rights of the Trustee with respect to any of the
                  Collateral.

The Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys. The
Company hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.

         5.2 TRUSTEE MAY PERFORM. If the Company fails to perform any agreement
contained herein, the Trustee may itself perform, or cause performance of, such
agreement, and the expenses of the Trustee incurred in connection therewith
shall be payable by the Company pursuant to Section 6.4.

         5.3 TRUSTEE HAS NO DUTY. The powers conferred on the Trustee hereunder
are solely to protect its interest (on behalf of the Holders) in the Collateral
and shall not impose any duty on it to exercise any such powers. Except for
reasonable care of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Trustee shall have no duty as to
any Collateral or responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Property, whether or not the Trustee has or is deemed to
have knowledge of such matters or (ii) taking any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral.

         5.4 REASONABLE CARE. The Trustee is required to exercise reasonable
care in the custody and preservation of any of the Collateral in its possession;
provided, that the Trustee shall be deemed to have exercised reasonable care in
the custody and preservation of any of the Collateral, if it takes such action
for that purpose as the Company reasonably requests in writing at times other
than upon the occurrence and during the continuance of any Event of Default, but
failure of the Trustee to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.

         SECTION 6.        REMEDIES

         6.1 CERTAIN REMEDIES. (A) If any Event of Default shall have occurred
and be continuing, the Trustee may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party on default under the UCC
(whether or not the UCC applies to the affected Collateral) and also may,
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Trustee's offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Trustee may deem commercially reasonable. The
Company agrees that, to the extent notice of sale shall be required by law, at
least ten days' prior notice to the Company of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Trustee shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Trustee may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.

         (B) If any Event of Default shall have occurred and be continuing, the
Trustee may:

                  (i)      transfer all or any part of the Collateral into the
                           name of the Trustee or its nominee, with or without
                           disclosing that such Collateral is subject to the
                           lien and security interest hereunder,

                  (ii)     notify the parties obligated on any of the Collateral
                           to make payment to the Trustee of any amount due or
                           to become due thereunder,

                  (iii)    enforce collection of any of the Collateral by suit
                           or otherwise, and surrender, release or exchange all
                           or any part thereof, or compromise or extend or renew
                           for any period (whether or not longer than the
                           original period) any obligations of any nature of any
                           party with respect thereto,

                  (iv)     endorse any checks, drafts, or other writings in the
                           Company's name to allow collection of the Collateral,

                  (v)      take control of any proceeds of the Collateral, and

                  (vi)     execute (in the name, place and stead of the Company)
                           endorsements. assignments, stock powers and other
                           instruments of conveyance or transfer with respect to
                           all or any of the Collateral.

         6.2 COMPLIANCE WITH RESTRICTIONS. The Company agrees that in any sale
of any of the Collateral whenever an Event of Default shall have occurred and be
continuing, the Trustee is hereby authorized to comply with any limitation or
restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law (including
compliance with such procedures as may restrict the number of prospective
bidders and purchasers, require that such prospective bidders and purchasers
have certain qualifications, and restrict such prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Company further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Trustee be liable nor accountable to the
Company for any discount allowed by the reason of the fact that such Collateral
is sold in compliance with any such limitation or restriction.

         6.3 APPLICATION OF PROCEEDS. All cash proceeds received by the Trustee
in respect of any sale of, collection from, or other realization upon, all or
any part of the Collateral may, in the discretion of the Trustee, be held by the
Trustee as additional collateral security for, or then or at any time thereafter
be applied (after payment of any amounts payable to the Trustee and any Holder
pursuant to Section 6.4) in whole or in part by the Trustee against, all or any
part of the Indenture Obligations in the order specified in Section 10.4 of the
Company Security Agreement of even date herewith made by the Company in favor of
the Trustee.

         6.4 INDEMNITY AND EXPENSES. The Company hereby indemnifies and holds
harmless the Trustee and each Holder from and against any and all claims,
losses, and liabilities arising out of or resulting from this Agreement
(including enforcement of this Agreement), except claims, losses, or liabilities
resulting from the Trustee's or such Holder's gross negligence, bad faith,
wilful misconduct or fraud. Upon demand, the Company will pay to the Trustee and
each Holder the amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel (which shall include the
allocated costs of in-house counsel fees and expenses) and of any experts and
Trustees, which the Trustee or such Holder may incur in connection with:

         (A)      the administration of this Agreement and each other
                  Transaction Document to which Company is a party;

         (B)      the custody, preservation, use, or operation of, or the sale
                  of, collection from, or other realization upon, any of the
                  Collateral;

         (C)      the exercise or enforcement of any of the rights of the
                  Trustee or any Holder hereunder; or

         (D)      the failure by the Company to perform or observe any of the
                  provisions hereof.

         SECTION 7.        MISCELLANEOUS

         7.1 PROTECTION OF COLLATERAL. The Trustee may from time to time, at its
option, perform any act which the Company agrees hereunder to perform and which
the Company shall fail to perform after being requested in writing so to perform
(it being understood that no such request need be given after the occurrence and
during the continuance of a Default or an Event of Default) and the Trustee may
from time to time take any other action which the Trustee reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.

         7.2 CERTAIN WAIVERS. The Company waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of marshaling of
the Collateral or other collateral or security for the Indenture Obligations,
(ii) any right to require the Trustee (a) to proceed against any Person, (b) to
exhaust any other collateral or security for any of the Indenture Obligations,
(c) to pursue any remedy in the Trustee's power or (d) to make or give any
presentments, demands for performance, notices of nonperformance, protests,
notices of protests or notices of dishonor in connection with any of the
Collateral and (iii) all claims, damages, and demands against the Trustee
arising out of the repossession, retention, sale or application of the proceeds
of any sale of the Collateral.

         7.3 NOTICES. All notices or other communications hereunder shall be
given in the manner and to the addresses specified in the Indenture. All such
notices and other communications shall be effective (i) if delivered by hand or
pre-paid courier service, when delivered, (ii) if sent by mail, upon the earlier
of the date of receipt or five Business Days after deposit in the mail, first
class, postage prepaid, (iii) if sent by telex, upon receipt by the sender of an
appropriate answerback and (iv) if sent by facsimile transmission, upon receipt
of electronic confirmation of receipt.

         7.4 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of the
Trustee to exercise, and no delay in exercising, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative
and not exclusive of any rights, remedies, powers and privileges that may
otherwise be available to the Trustee.

         7.5 BINDING EFFECT. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the Company and the Trustee, and their
respective successors and assigns; provided, that the Company may not assign any
of its rights hereunder or interests herein without the written consent of the
Trustee and the Holders having at least 25% in principal amount of the
Outstanding Securities. The Company acknowledges that upon any assignment or
other transfer by the Trustee or any Holder of any of the Indenture Obligations,
the Trustee or such Holder may transfer its interest herein, or any part
thereof, to the assignee or transferee, who shall thereupon become vested with
all the rights, remedies, powers, security interests and liens herein granted to
the Trustee or such Holder, or the transferred part thereof, subject, however,
to the restrictions contained herein. No Persons other than the Company, the
Holders, the Trustee and the respective assignees of the Holders and the Trustee
are intended to be benefited hereby or shall have any rights hereunder, as
third-party beneficiaries or otherwise.

         7.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK; PROVIDED, THAT THE TRUSTEE
AND THE HOLDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

         7.7 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY AND THE TRUSTEE FOR
THE BENEFIT OF ITSELF AND THE HOLDERS EACH CONSENT, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE COMPANY AND
THE TRUSTEE FOR THE BENEFIT OF ITSELF AND THE HOLDERS EACH IRREVOCABLY WAIVE ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY AND THE TRUSTEE FOR THE
BENEFIT OF ITSELF AND THE HOLDERS, EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
NEW YORK LAW.

         7.8 WAIVER OF JURY TRIAL. THE COMPANY AND THE TRUSTEE FOR THE BENEFIT
OF ITSELF AND THE HOLDERS EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY AND THE
TRUSTEE FOR THE BENEFIT OF ITSELF AND THE HOLDERS EACH AGREE THAT ANY SUCH CLAIM
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION 11.8 AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.

         7.9 AMENDMENT. This Agreement shall not be amended except by the
written agreement of the parties as provided in the Indenture.

         7.10 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under all
applicable laws and regulations. If; however, any provision of this Agreement
shall be prohibited by or invalid under any such law or regulation in any
jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform
to the minimum requirements of such law or regulation, or, if for any reason it
is not deemed so modified, it shall be ineffective and invalid only to the
extent of such prohibition or invalidity without affecting the remaining
provisions of this Agreement, or the validity or effectiveness of such provision
in any other jurisdiction. This Agreement is to be read, construed and applied
together with the Indenture and the other Transaction Documents which, taken
together, set forth the complete understanding and agreement of the Trustee, the
Holders and the Company with respect to the matters referred to herein and
therein.

         7.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.

         7.12 NO INCONSISTENT REQUIREMENTS. The Company acknowledges that this
Agreement and the other Transaction Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms;
provided, in the event any terms or conditions contained herein conflict with
any term or condition set forth in the Indenture, such term or condition set
forth in the Indenture shall control.

         7.13 ENTIRE AGREEMENT. This Agreement (i) integrates all the terms and
conditions mentioned herein or incidental hereto, (ii) supersedes all oral
negotiations and prior writings with respect to the subject matter hereof and
(iii) is intended by the parties as the final expression of the Agreement with
respect to the terms and conditions set forth in this Agreement and as the
complete and exclusive statement of the terms agreed to by the parties.

         7.14 FURTHER ASSURANCES. The Company agrees upon the written request of
the Trustee or any Holder, to execute and deliver to the Trustee or such Holder,
from time to time, any additional instruments or documents reasonably considered
necessary by the Trustee or such Holder to cause this Agreement to be, become or
remain, valid and effective in accordance with its terms.


                                    * * * * *

         Executed and delivered as of the date first above written.


                                     MFN FINANCIAL CORPORATION



                                     By:
                                     Name:
                                     Title:


                                     NORWEST BANK MINNESOTA, NATIONAL 
                                     ASSOCIATION, as Trustee



                                     By:
                                     Name:
                                     Title:


<PAGE>

                                   SCHEDULE I

<TABLE>

                                 PLEDGED SHARES

<CAPTION>

- ------------------------------------------- ------------------- -------------------------------- -------------------
                                                                 Common Stock
                                                                                                       % of
                                                   Share           Authorized     Outstanding        Outstanding
               Pledged Share Issuer            Certificate #         Shares           Shares       Shares Pledged
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
<S>                                                 <C>              <C>              <C>               <C>
Mercury Finance Corporation of Alabama              2                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Arizona                  2                250              250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Merc Finance Company of California                  2                250              250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Colorado                 1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Delaware                 1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Florida                  2                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Georgia                  2                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Idaho                    1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Illinois                 2                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Indiana                  2                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Iowa                     1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Kansas                   2                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Kentucky                 2                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Louisiana                2                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Michigan                 1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Mississippi              1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Missouri                 2                250              250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Nevada                   2                250              250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of New Mexico               1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of New York                 1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of North Carolina           2                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Ohio                     1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
MFC Finance Company of Oklahoma                     2                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Oregon                   1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Pennsylvania             1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of South Carolina           1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance of Tennessee                        1                250              250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
MFC Finance Company of Texas                        2                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Utah                     1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Virginia                 2                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Washington               1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Mercury Finance Company of Wisconsin                1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Filco Marketing Company                             1                1000             250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
MFC Financial Services, Inc.                        2                250              250               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Gulfco Finance Company                              1              300,000           1000               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Gulfco Investment, Inc.                             1             1,000,000          1000               100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------
Midland Finance Co.                                 1               10,000          1503.5              100
- ------------------------------------------- ------------------- --------------- ---------------- -------------------

</TABLE>


                                                                    Exhibit 4(F)

                         SUBSIDIARIES GUARANTY AGREEMENT


         This Subsidiaries Guaranty Agreement dated as of March 23, 1999 (this
"Guaranty"), is made by each of the corporations listed on Annex I
(collectively, the "Guarantors" and each individually, a "Guarantor"), in favor
of Norwest Bank Minnesota, National Association, as trustee for the Holders
under the Indenture described below (in such capacity, the "Trustee").

                             PRELIMINARY STATEMENTS:

         1. MFN Financial Corporation, a Delaware corporation (the "Company"),
is a party to the Indenture of even date with this Guaranty (as amended,
restated, supplemented or otherwise modified from time to time, the
"Indenture"), with the Trustee, under which the Company will issue its senior
secured notes to the holders thereof and their successors and assigns.

         2. It is a condition precedent to the issuance of the senior secured
notes that the Guarantors enter into this Guaranty.

         3. Each Guarantor is a direct or indirect subsidiary of the Company and
will derive substantial and direct benefits (which benefits are acknowledged by
each Guarantor) from the issuance of the senior secured notes and other benefits
to be provided to the Company under the Indenture.

                                   AGREEMENT:

         In consideration of the mutual agreements, provisions, covenants and
for other valuable consideration, the sufficiency of which is acknowledged, the
Guarantors, jointly and severally, issue this Guaranty and agree as follows:

         SECTION 1.        DEFINITIONS; INTERPRETATION

         1.1 TERMS DEFINED IN THE INDENTURE. Unless otherwise defined in this
Guaranty, capitalized terms used in this Guaranty and not otherwise defined have
the meanings given to such terms from time to time in the Indenture.

         1.2 CERTAIN DEFINED TERMS. As used in this Guaranty, the following
terms have the following meanings:

                  "Agreement" has the meaning set forth in the preamble.

                  "Company" has the meaning set forth in the first preliminary
         statement.

                  "Bankruptcy Code" means the United States Bankruptcy Code, 11
         U.S.C. ss.ss. 101-1330.

                  "Governmental Authority" means any nation or government, any
         state or other political subdivision thereof, any entity exercising
         executive, legislative, judicial, regulatory or administrative
         functions of or pertaining to government and any corporation or other
         entity owned or controlled, through stock or capital ownership or
         otherwise, by any of the foregoing.

                  "Indenture" has the meaning set forth in the first preliminary
         statement.

                  "Majority Holders" means Holders having at least 25% in
         principal amount of the Outstanding Securities.

                  "Transaction Documents" means the Indenture, the Collateral
         Security Documents and any and all other agreements, instruments and
         documents executed or delivered in connection therewith.

                  "Trustee" has the meaning set forth in the preamble.

         SECTION 2.        GUARANTY

         2.1 GUARANTY. Each Guarantor, jointly and severally, irrevocably,
absolutely and unconditionally guarantees to the Trustee for the benefit of
itself, the Holders and their respective successors, endorsees, transferees and
assigns, the full and punctual payment or performance when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise, of all of the Indenture Obligations, including Indenture Obligations
in respect of amounts that would become due but for the operation of the
automatic stay under section 362(a) of the Bankruptcy Code or the operation of
sections 502(b) and 506(b) of the Bankruptcy Code. This Guaranty constitutes a
guaranty of payment and performance when due and not of collection, and each
Guarantor specifically agrees that it shall not be necessary or required that
the Trustee or any Holder whatsoever proceed against the Company (or any other
Person) before or as a condition to the Indenture Obligations of such Guarantor
under this Guaranty.

         2.2 INDENTURE OBLIGATIONS INDEPENDENT. The obligations under this
Guaranty are independent of the Indenture Obligations of the Company, and a
separate action or actions may be brought and prosecuted against each Guarantor
whether action is brought against the Company or whether the Company be joined
in any such action or actions.

         2.3 WAIVER OF CERTAIN RIGHTS. Each Guarantor waives any and all rights
such Guarantor may have now or in the future under any statute, or at common
law, or at law or in equity, or otherwise, to require the Trustee or any Holder:

         (A)      to proceed against the Company or any other Person;

         (B)      to proceed against or exhaust any security for the Indenture
                  Obligations or any other indebtedness of the Company to the
                  Trustee or any Holder; or

         (C)      to pursue any other remedy in the Trustee's or any such
                  Holder's power whatsoever.

It is agreed among each Guarantor, Trustee and the Holders that the waivers
contained in this Section 2.3 are of the essence to the transactions
contemplated by the Transaction Documents and that, but for this Guaranty and
such waivers, the Trustee would decline to enter into the Indenture and the
Holders would decline to purchase the Securities.

         2.4 WAIVER OF CERTAIN DEFENSES. In addition to the waivers set forth in
Section 2.3, each Guarantor waives any defense arising by reason of any
disability or other defense of the Company, or the cessation from any cause
whatsoever of the liability of the Company, whether consensual or arising by
operation of law or any bankruptcy, insolvency or debtor relief proceeding, or
from any other cause, or any claim that such Guarantor's obligations hereunder
exceed or are more burdensome than those of the Company. Each Guarantor waives
any defense arising by reason of any statute of limitations affecting the
liability of the Company. Each Guarantor waives all rights and defenses arising
out of an election of remedies by the Trustee or any Holder, even though that
election of remedies, such as a nonjudicial foreclosure with respect to security
for the Indenture Obligations, has destroyed such Guarantor's rights of
subrogation and reimbursement against the Company by operation of Section 580d
of the California Code of Civil Procedure (if applicable) or other applicable
law, and all rights or defenses such Guarantor may have by reason of protection
afforded to the Company with respect to the Indenture Obligations pursuant to
the antideficiency laws or other laws of the State of California (or other
applicable jurisdiction) limiting or discharging the Indenture Obligations. Each
Guarantor waives any benefit of; and any right to participate in, any security
or other guaranty now or hereafter held by the Trustee or any Holder securing
the Indenture Obligations.

         2.5 WAIVER OF PRESENTMENTS, ETC. Each Guarantor waives all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor and notices of acceptance of this
Guaranty and of the existence, creation, or incurring of new or additional
Indenture Obligations or any other indebtedness of the Company to the Trustee or
any Holder.

         2.6 SUBORDINATION. Any obligations of the Company to any Guarantor, now
or hereafter existing, are hereby fully subordinated in time and priority of
payment to the Indenture Obligations and all other indebtedness of the Company
to the Trustee or any Holder; provided, that in no event shall this Section 2.6
be deemed to grant any Guarantor a right of subrogation contrary to the terms of
Section 2.10. Such obligations of the Company to such Guarantor if the Trustee
so requests shall be enforced and performance received by such Guarantor as
trustee for the Trustee and such Holders and the proceeds thereof shall be paid
over to the Trustee and the Holders on account of the Indenture Obligations, but
without reducing or affecting in any manner the liability of such Guarantor
under the other provisions of this Guaranty.

         2.7 REINSTATEMENT OF GUARANTY. If any payment or transfer of any
interest in property by the Company to the Trustee or any Holder in fulfillment
of any Indenture Obligation is rescinded or must at any time (including after
the return or cancellation of this Guaranty) be returned, in whole or in part,
by the Trustee or any Holder to the Company or any other Person, upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, this
Guaranty shall be reinstated with respect to any such payment or transfer,
regardless of any such prior return or cancellation.

         2.8 POWERS. It is not necessary for the Trustee or any Holder to
inquire into the powers of the Company or of the officers, directors, partners
or agents acting or purporting to act on its behalf, and any Indenture
Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.

         2.9      TAXES.

         (A)      Any and all payments by the Guarantors to each Holder or the
                  Trustee under this Agreement shall be made free and clear of,
                  and without deduction or withholding for, any and all present
                  or future taxes, levies, imposts, deductions, charges or
                  withholdings, and all liabilities with respect thereto,
                  excluding, in the case of each Holder and the Trustee, such
                  taxes (including income taxes or franchise taxes) as are
                  imposed on or measured by each Holder's net income by the
                  jurisdiction under the laws of which such Holder or the
                  Trustee, as the case may be, is organized or any political
                  subdivision thereof (all such non-excluded taxes, levies,
                  imposts, deductions, charges, withholdings and liabilities
                  being referred to as "Taxes"). -----

         (B)      In addition, the Guarantors shall pay any present or future
                  stamp or documentary taxes or any other excise or property
                  taxes, charges or similar levies which arise from any payment
                  made hereunder or from the execution, delivery or registration
                  of, or otherwise with respect to, this Agreement (hereinafter
                  referred to as "Other Taxes").

         (C)      The Guarantors shall indemnify and hold harmless each Holder
                  and the Trustee for the full amount of Taxes or Other Taxes
                  (including any Taxes or Other Taxes imposed by any
                  jurisdiction on amounts payable under this Section 2.9) paid
                  by the Holder or the Trustee and any liability (including
                  penalties, interest, additions to tax and expenses) arising
                  therefrom or with respect thereto, whether or not such Taxes
                  or Other Taxes were correctly or legally asserted. Payment
                  under this indemnification shall be made within 30 days from
                  the date the Holder or the Trustee makes written demand
                  therefor.

         (D)      If the Guarantors shall be required by law to deduct or
                  withhold any Taxes or Other Taxes from or in respect of any
                  sum payable hereunder to any Holder or the Trustee, then:

                  (i)      the sum payable shall be increased as necessary so
                           that after making all required deductions (including
                           deductions applicable to additional sums payable
                           under this Section 2.9) such Holder or the Trustee,
                           as the case may be, receives an amount equal to the
                           sum it would have received had no such deductions
                           been made;

                  (ii)     the Guarantors shall make such deductions, and

                  (iii)    the Guarantors shall pay the full amount deducted to
                           the relevant taxation authority or other authority in
                           accordance with applicable law.

         (E)      Within 30 days after the date of any payment by the Guarantors
                  of Taxes or Other Taxes, the Guarantors shall furnish to the
                  Trustee the original or a certified copy of a receipt
                  evidencing payment thereof, or other evidence of payment
                  satisfactory to the Trustee.

         2.10 WAIVER OF SUBROGATION. Notwithstanding anything to the contrary in
this Guaranty or in any other Transaction Document to which any Guarantor is a
party, so long as any of the Indenture Obligations remain unsatisfied, each
Guarantor hereby expressly waives any right of subrogation, reimbursement,
indemnification and contribution (contractual, statutory or otherwise), against
the Company arising from the existence or performance of this Guaranty and each
Guarantor hereby expressly waives any right to enforce any remedy which the
Trustee or any Holder now has or may hereafter have against the Company, and
waives any benefit of, and any right to participate in, any security now or
hereafter held by the Trustee or any Holder securing the Indenture Obligations.

         SECTION 3.        REPRESENTATIONS AND WARRANTIES

         Each Guarantor jointly and severally represents and warrants to the
Trustee and each Holder as follows, which representations and warranties survive
the execution and delivery of this Guaranty:

         3.1 CORPORATE EXISTENCE AND POWER. Each Guarantor (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) has the power and authority to own its
assets, carry on its business and execute, deliver, and perform its Indenture
Obligations under, this Guaranty and any other Transaction Document to which it
is a party, (iii) is duly qualified as a foreign corporation, and licensed and
in good standing, under the laws of each jurisdiction where its ownership, lease
or operation of property or the conduct of its business requires such
qualification or license except where failure to be so qualified or licensed
would not have a Material Adverse Effect and (iv) has all necessary governmental
licenses, authorizations, consents and approvals to own its assets and carry on
its business, and is in compliance with all applicable requirements of law of
any Governmental Authority except where failure to obtain such licenses,
authorizations, consents or approvals or comply with such laws would not have a
Material Adverse Effect.

         3.2 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery
and performance by each Guarantor of this Guaranty and any other Transaction
Document to which it is party have been duly authorized by all necessary
corporate action, and do not and will not (i) contravene the terms of any of
such Guarantor's constitutive documents, (ii) conflict with or result in any
breach or contravention of, or the creation of any lien under, any agreement to
which such Guarantor is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Guarantor or its Property is subject or
(iii) violate any requirement of law of any Governmental Authority.

         3.3 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, each Guarantor of
this Guaranty or any other Transaction Document to which it is a party or the
transactions contemplated hereby or thereby.

         3.4 BINDING EFFECT. This Guaranty and each other Transaction Document
to which each Guarantor is a party constitute the legal, valid and binding
obligations of each Guarantor, enforceable against each Guarantor in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability.

         3.5 REGULATED ENTITIES. No Guarantor, nor any Person controlling any
Guarantor or any Subsidiary of any Guarantor is (i) an "Investment Company"
within the meaning of the Investment Company Act of 1940 or (ii) subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur or
guarantee Indebtedness.

         SECTION 4.        MISCELLANEOUS

         4.1 APPLICATION OF PAYMENTS ON GUARANTY. All payments required to be
made by each Guarantor hereunder shall, unless otherwise expressly provided
herein, be made to the Trustee for the account of the Holders at the address of
the Trustee set forth in the Indenture. The Trustee will promptly distribute to
each Holder its pro rata share (or other applicable share as expressly provided
herein) of such payment in like funds as received. Payments received from the
Guarantors shall be applied by the Trustee as follows;

         First: to the payment of the costs and expenses due under this
         Guaranty, including reasonable compensation to the Trustee and its
         agents and attorneys, and of all other expenses, liabilities and
         advances made or incurred by the Trustee, together with interest on
         such costs, expenses and liabilities and on all advances made by the
         Trustee from the date any such cost, expense or liability is past due
         or unpaid or any such advance is made, in each case until paid in full;

         Second: to the payment of any other fees, costs or other expenses
         constituting Indenture Obligations under the Transaction Documents
         other than amounts payable under clause "First" above, together with
         interest on each such amount at the interest rate(s) applicable to the
         Indenture Obligations pursuant to and in accordance with the Indenture
         from and after the date such amount is due, owing or unpaid until paid
         in full;

         Third: to the payment of any interest then due, owing or unpaid in
         respect of any Security or any other Indenture Obligation together
         with, to the maximum extent permitted by law, interest thereon at the
         interest rate(s) applicable to the Indenture Obligations pursuant to
         and in accordance with the Indenture from the date such amount is due,
         owing or unpaid until paid in full to be applied in accordance with the
         Indenture;

         Fourth: to the payment of the whole amount of principal then due, owing
         or unpaid in respect of any Security or any other Indenture Obligation
         secured by this Guaranty to be applied in accordance with the
         Indenture; and

         Fifth: the surplus, if any, to be paid to the applicable Guarantor or
         to whomever lawfully may be entitled to receive such surplus.

         4.2 ASSIGNMENT. Any Holder may from time to time, without notice to the
Guarantors and without affecting each Guarantor's Indenture Obligations
hereunder, transfer its interest in the Indenture Obligations as provided in the
Indenture.

         4.3 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of the
Trustee to exercise, and no delay in exercising, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative
and not exclusive of any rights, remedies, powers and privileges that may
otherwise be available to the Trustee.

         4.4 BINDING EFFECT. This Guaranty shall be binding upon, inure to the
benefit of and be enforceable by the Guarantors and the Trustee, and their
respective successors and assigns; provided, that no Guarantor may assign any of
its rights hereunder or interests herein without the written consent of the
Trustee and the Majority Holders. Each Guarantor acknowledges that upon any
assignment or other transfer by the Trustee or any Holder of any of the
Indenture Obligations, the Trustee or such Holder may transfer its interest
herein, or any part thereof, to the assignee or transferee, who shall thereupon
become vested with all the rights, remedies, powers, security interests and
liens herein granted to the Trustee or such Holder, or the transferred part
thereof, subject, however, to the restrictions contained herein. No Persons
other than the Guarantors, the Holders, the Trustee and the respective assignees
of the Holders and the Trustee are intended to be benefited hereby or shall have
any rights hereunder, as third-party beneficiaries or otherwise.

         4.5 GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK; PROVIDED, THAT THE TRUSTEE
AND THE HOLDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

         4.6 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND BY EXECUTION AND DELIVERY OF THIS GUARANTY, THE GUARANTORS AND THE TRUSTEE
FOR THE BENEFIT OF ITSELF AND THE HOLDERS EACH CONSENT, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE
GUARANTORS AND THE TRUSTEE FOR THE BENEFIT OF ITSELF AND THE HOLDERS EACH
IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS GUARANTY OR ANY DOCUMENT RELATED HERETO. THE GUARANTORS AND THE TRUSTEE
FOR THE BENEFIT OF ITSELF AND THE HOLDERS, EACH WAIVE PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.

         4.7 WAIVER OF JURY TRIAL. THE GUARANTORS AND THE TRUSTEE FOR THE
BENEFIT OF ITSELF AND THE HOLDERS EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL
BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED
TO THIS GUARANTY, THE OTHER TRANSACTION DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
GUARANTORS AND THE TRUSTEE FOR THE BENEFIT OF ITSELF AND THE HOLDERS EACH AGREE
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION 4.7
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS GUARANTY OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY.

         4.8 AMENDMENT. This Guaranty shall not be amended except by the written
agreement of the parties as provided in the Indenture.

         4.9 SEVERABILITY. Whenever possible, each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under all
applicable laws and regulations. If, however, any provision of this Guaranty
shall be prohibited by or invalid under any such law or regulation in any
jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform
to the minimum requirements of such law or regulation, or, if for any reason it
is not deemed so modified, it shall be ineffective and invalid only to the
extent of such prohibition or invalidity without affecting the remaining
provisions of this Guaranty, or the validity or effectiveness of such provision
in any other jurisdiction. This Guaranty is to be read, construed and applied
together with the Indenture and the other Transaction Documents which, taken
together, set forth the complete understanding and Guaranty of the Trustee, the
Holders and the Guarantors with respect to the matters referred to herein and
therein.

         4.10 COUNTERPARTS. This Guaranty may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same Guaranty.

         4.11 NO INCONSISTENT REQUIREMENTS. Each Guarantors acknowledges that
this Guaranty and the other Transaction Documents may contain covenants and
other terms and provisions variously stated regarding the same or similar
matters, and agrees that all such covenants, terms and provisions are cumulative
and all shall be performed and satisfied in accordance with their respective
terms; provided, in the event any terms or conditions contained herein conflict
with any term or condition set forth in the Indenture, such term or condition
set forth in the Indenture shall control.

         4.12 ENTIRE GUARANTY. This Guaranty (i) integrates all the terms and
conditions mentioned herein or incidental hereto, (ii) supersedes all oral
negotiations and prior writings with respect to the subject matter hereof and
(iii) is intended by the parties as the final expression of the Guaranty with
respect to the terms and conditions set forth in this Guaranty and as the
complete and exclusive statement of the terms agreed to by the parties.

         4.13 FURTHER ASSURANCES. Each Guarantor agrees upon the written request
of the Trustee or any Holder, to execute and deliver to the Trustee or such
Holder, from time to time, any additional instruments or documents reasonably
considered necessary by the Trustee or such Holder to cause this Guaranty to be,
become or remain, valid and effective in accordance with its terms.

         4.14 TERMINATION. This Guaranty shall terminate and be of no further
force or effect upon the payment and performance in full of the Indenture
Obligations subject to the provisions of Section 2.9. Upon termination of this
Guaranty, the Trustee shall deliver to the Guarantors such documents as the
Guarantors may reasonably request to evidence such termination.

         4.15 LIMITATION ON GUARANTEED INDENTURE OBLIGATIONS. Notwithstanding
any provision herein contained to the contrary, each Guarantor's liability
hereunder shall be limited to an amount not to exceed the amount which could be
claimed by the Trustee and Holders from such Guarantor under this Guaranty
without rendering such claim voidable or avoidable under section 548 of Chapter
11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent
Transfer Act, Uniform Fraudulent Conveyance Act or similar statute of common
law. The right of a Guarantor to contribution from other Guarantors or any other
rights such Guarantor may have, contractual or otherwise, will be taken into
account in making any determination under this Section 4.15.

         4.16 CERTAIN ADDITIONAL CONSENTS AND WAIVERS (A) This Guaranty is
absolute, unconditional and irrevocable and is in no way conditioned or
contingent on the Company's performance of any obligation under the Indenture or
any other Transaction Document, any attempt to enforce in whole or in part any
of the Company's liabilities and Indenture Obligations to any Holder or the
existence or continuance of the Company or any other Person as a legal entity,
nor shall this Guaranty or each Guarantor's obligations hereunder be limited,
impaired, restricted or otherwise affected by the consolidation or merger of the
Company with or into any other entity, the sale, lease or other disposition by
the Company of all or substantially all of its assets to any other entity
(whether or not effected in compliance with the Transaction Documents), or the
bankruptcy or insolvency of the Company, the admission in writing by the Company
of its inability to pay its debts as they mature, or its making of a general
assignment for the benefit of, or entering into a composition or arrangement
with, creditors.

         (B) The Trustee and the Holders may, at any time and from time to time,
without the consent of or notice to any Guarantor, except such notice as may be
required by applicable statute which cannot be waived, without incurring
responsibility to such Guarantor, and without impairing or releasing the
obligations of such Guarantor hereunder, upon or without any terms or conditions
and in whole or in part, (i) to the extent permitted by the Indenture, change
the manner, place and terms of payment or change or extend the time of payment
of, renew or alter any obligation of the Company hereby guaranteed, or in any
manner modify, amend or supplement the terms of the Indenture or other
Transaction Documents (other than this Guaranty) or any documents, instruments
or agreements executed in connection therewith (other than this Guaranty), and
this Guaranty shall apply to the Indenture Obligations and liabilities of the
Company, as changed, extended, renewed, modified, amended, supplemented or
altered in any manner, (ii) exercise or refrain from exercising any rights
against the Company or others (including such Guarantor) or otherwise act or
refrain from acting, (iii) settle or compromise any Indenture Obligations and
liabilities herein guaranteed or any Indenture Obligations and liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and may subordinate the payment of all or any part thereof to
the payment of any Indenture Obligations and liabilities which may be due to the
Trustee, the Holders or others, (iv) sell, exchange, release, surrender, realize
upon or otherwise deal with in any manner or in any order any property pledged
or mortgaged by anyone to secure or in any manner securing the Indenture
Obligations, any liabilities or obligation (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof or any other
Indenture Obligations or liabilities of the Company or such Guarantor to the
Holders or any offset thereagainst, (v) take and hold security or additional
security for any or all of the Indenture Obligations, (vi) apply any sums by
whomsoever paid or howsoever realized to any Indenture Obligations and
liabilities of the Company to the Holders regardless of what Indenture
Obligations and liabilities remain unpaid and (vii) in accordance with the
Indenture, assign their rights and interests under this Guaranty, the Indenture
or the other Transaction Documents, in whole or in part. Without limiting the
generality of the foregoing, each Guarantor hereby specifically waives such
Guarantor's rights and benefits under any statute, regulation, judicial decision
or other law which purports to exonerate or reduce the liability of a surety if
the underlying obligation is altered in any respect or if the rights and
remedies of the creditor against the principal in respect of a secured
obligation are in any way altered, impaired or suspended and agrees that, by so
doing, such Guarantor's obligations hereunder shall continue even if the Holders
alter any Indenture Obligations under the Indenture or the other Transaction
Documents (other than this Guaranty) in any respect or the Holders' remedies or
rights against the Company are in any way impaired or suspended without such
Guarantor's consent.

         (C) No invalidity, irregularity or unenforceability of the Indenture
Obligations or liabilities of the Company under the Indenture or any other
Transaction Document shall affect, impair or be a defense to this Guaranty. Each
Guarantor hereby waives any and all benefits and defenses under any statute,
regulation, judicial decision or other law which purports to exonerate or reduce
the liability of a surety as a result of any disability or absence of liability
of the principal or any defense to liability or enforcement which the principal
may have and agrees that, by so doing, such Guarantor's obligations and the
guarantees granted hereunder shall continue even if the Company had no liability
at the time of execution of the Indenture or thereafter ceased or cease to be
liable. Each Guarantor also waives any and all benefits and defenses under any
statute, regulation, judicial decision or other law which purports to limit the
liability of a surety to that of the principal or to reduce the liability of a
surety in proportion to any reduction in the liability of the principal and
agrees that, by so doing, such Guarantor's obligations hereunder may be more
burdensome than that of the Company.

         (D) Each Guarantor, to the extent permitted under applicable law,
hereby waives any right, whether arising under any statute, regulation, judicial
decision or otherwise, to require the Trustee or any Holder to (i) proceed
against the Company or any other Person acting as surety, guaranteeing or
providing collateral or other credit support for the Company's Indenture
Obligations under the Indenture or any other Transaction Document (a "Third
Party Credit Support Provider"), (ii) proceed against or exhaust any security
received from the Company or any Third Party Credit Support Provider or (iii)
pursue any other right or remedy in the Trustee's or the Holders' power
whatsoever.

         (E) Each Guarantor further waives, to the extent permitted under
applicable law (i) any defense resulting from the absence, impairment or loss of
any right of reimbursement, subrogation, contribution or other right or remedy
of such Guarantor against the Company, any Third Party Credit Support Provider
or any security, whether resulting from an election by the Trustee and the
Holders to foreclose upon security by judicial or nonjudicial sale or otherwise,
(ii) any setoff or counterclaim of the Company or any defense of any kind
(including defenses resulting from any disability) or the cessation or stay of
enforcement from any cause whatsoever of the liability of the Company (including
without limitation the lack of validity or enforceability of the Indenture or
any other Transaction Document), (iii) any right to exoneration, in whole or in
part, of sureties or Third Party Credit Support Providers which would otherwise
be applicable, (iv) any right of subrogation or reimbursement, any right of
contribution, any right to enforce any remedy which the Trustee and the Holders
now have or may hereafter have against the Company, and any benefit of, and any
right to participate in, any security now or hereafter held or received by the
Holders (or the Trustee on their behalf), (v) except as required under the
Indenture, all presentments, demands for performance, notices of
non-performance, protests, notice of dishonor, notices of acceptance of this
Guaranty or of the existence, creation or incurring of new or additional
Indenture Obligations under the Indenture or the other Transaction Documents, or
any other notices of any kind and (vi) all valuation, appraisal, extension or
redemption laws now or hereafter in effect.

         (F) Each Guarantor further specifically waives any and all benefits,
rights and defenses arising out of an election of remedies by the Trustee or any
Holder even though that election of remedies (i) has destroyed such Guarantor's
rights of subrogation and reimbursement against the Company and all rights or
defenses such Guarantor may have by reason of protection afforded to the Company
with respect to the Indenture Obligations pursuant to antideficiency laws or
other laws limiting or discharging the Indenture Obligations or (ii) would
require the Trustee and the Holders to foreclosure on all collateral covered by
the other Transaction Documents in one action or would prevent the Trustee on
behalf of itself and the Holders from bringing more than one action to enforce
the Indenture Obligations. Each Guarantor agrees by so doing that (i) such
Guarantor's obligations hereunder shall continue even if the Company had no
liability at the time of execution of the Indenture and other Transaction
Documents or thereafter ceased or ceases to be liable, (ii) that such
Guarantor's obligations hereunder may be more burdensome than that of the
Company and (iii) such Guarantor's obligations hereunder shall continue even if
the Trustee or any Holder alters any obligations under the Indenture or the
other Transaction Documents (other than this Guaranty) in any respect or if the
Trustee's or the Holder's remedies or rights against the Company are in any way
impaired or suspended without such Guarantor's consent.

         (G) Each Guarantor acknowledges that it has the ability, and hereby
assumes the obligation and responsibility, to keep informed of the financial
condition of the Company and any Third Party Credit Support Provider and of
other matters or circumstances affecting the ability of any of them to pay or
perform their respective obligations thereunder or the risk of nonpayment and
nonperformance. Each Guarantor hereby waives any obligation on the part of the
Trustee or any Holder to inform such Guarantor of the financial condition, or
any changes in financial condition, of the Company or any Third Party Credit
Support Provider or of any other matter or circumstance which might effect the
ability of the Company to pay and perform under the Indenture or any other
Transaction Document, or the risk of nonpayment or nonperformance.

                                    * * * * *

         Executed and delivered as of the day and year first above written.


                                       MERCURY FINANCE COMPANY OF ALABAMA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF ARIZONA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF CALIFORNIA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF COLORADO



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF DELAWARE



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF FLORIDA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF GEORGIA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF IDAHO



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF ILLINOIS



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF INDIANA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF IOWA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF KANSAS



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF KENTUCKY



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF LOUISIANA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF MICHIGAN



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF MISSISSIPPI



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF MISSOURI



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF NEVADA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF NEW MEXICO



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF NEW YORK



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF NORTH CAROLINA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF OHIO



                                       By:
                                       Name:
                                       Title:


                                       MFC FINANCE COMPANY OF OKLAHOMA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF OREGON



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF PENNSYLVANIA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF SOUTH CAROLINA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF TENNESSEE



                                       By:
                                       Name:
                                       Title:


                                       MFC FINANCE COMPANY OF TEXAS



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF UTAH



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF VIRGINIA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF WASHINGTON



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF WISCONSIN



                                       By:
                                       Name:
                                       Title:


                                       FILCO MARKETING COMPANY



                                       By:
                                       Name:
                                       Title:


                                       MFC FINANCIAL SERVICES, INC.



                                       By:
                                       Name:
                                       Title:


                                       GULFCO FINANCE COMPANY



                                       By:
                                       Name:
                                       Title:


                                       GULFCO INVESTMENT COMPANY



                                       By:
                                       Name:
                                       Title:


                                       MIDLAND FINANCE COMPANY



                                       By:
                                       Name:
                                       Title:


                                       NORWEST BANK MINNESOTA, NATIONAL
                                       ASSOCIATION, as Trustee



                                       By:
                                       Name:
                                       Title:


<PAGE>

                                     ANNEX I

                                   Guarantors


                       Mercury Finance Company of Alabama
                       Mercury Finance Company of Arizona
                      Mercury Finance Company of California
                       Mercury Finance Company of Colorado
                       Mercury Finance Company of Delaware
                       Mercury Finance Company of Florida
                       Mercury Finance Company of Georgia
                        Mercury Finance Company of Idaho
                       Mercury Finance Company of Illinois
                       Mercury Finance Company of Indiana
                         Mercury Finance Company of Iowa
                        Mercury Finance Company of Kansas
                       Mercury Finance Company of Kentucky
                      Mercury Finance Company of Louisiana
                       Mercury Finance Company of Michigan
                     Mercury Finance Company of Mississippi
                       Mercury Finance Company of Missouri
                        Mercury Finance Company of Nevada
                      Mercury Finance Company of New Mexico
                       Mercury Finance Company of New York
                    Mercury Finance Company of North Carolina
                         Mercury Finance Company of Ohio
                         MFC Finance Company of Oklahoma
                        Mercury Finance Company of Oregon
                     Mercury Finance Company of Pennsylvania
                    Mercury Finance Company of South Carolina
                          Mercury Finance of Tennessee
                          MFC Finance Company of Texas
                         Mercury Finance Company of Utah
                       Mercury Finance Company of Virginia
                      Mercury Finance Company of Washington
                      Mercury Finance Company of Wisconsin
                             Filco Marketing Company
                          MFC Financial Services, Inc.
                             Gulfco Finance Company
                            Gulfco Investment Company
                             Midland Finance Company
                              MFN Insurance Company


                         SUBSIDIARIES SECURITY AGREEMENT


         This Subsidiaries Security Agreement dated as of March 23, 1999 (this
"Agreement"), is made by each of the corporations listed on Annex I
(collectively, the "Guarantors"), in favor of Norwest Bank Minnesota, National
Association, as trustee for the Holders under the Indenture described below (in
such capacity, the "Trustee").

                             PRELIMINARY STATEMENTS:

         1. MFN Financial Corporation, a Delaware corporation (the "Company"),
is a party to the Indenture of even date with this Agreement (as amended,
restated, supplemented or otherwise modified from time to time, the
"Indenture"), with the Trustee, under which the Company will issue its senior
secured notes to the holders thereof and their successors and assigns.

         2. The Guarantors have entered into the Subsidiaries Guaranty Agreement
of even date with this Agreement (the "Guaranty"), made in favor of the Trustee
under which the Guarantors jointly and severally guaranteed the obligations and
liabilities of the Company under the Indenture.

         3. It is a condition precedent to the issuance of the senior secured
notes that the Guarantors enter into this Agreement.

         4. Each Guarantor is a direct or indirect subsidiary of the Company and
will derive substantial and direct benefits (which benefits are acknowledged by
each Guarantor) from the issuance of the senior secured notes and other benefits
to be provided to the Company under the Indenture.

                                   AGREEMENT:

         In consideration of the mutual agreements, provisions, covenants and
for other valuable consideration, the sufficiency of which is acknowledged, each
Guarantor agrees as follows:

         SECTION 1.        DEFINITIONS; INTERPRETATION

         1.1 TERMS DEFINED IN THE INDENTURE. Unless otherwise defined in this
Agreement, capitalized terms used in this Agreement and not otherwise defined
have the meanings given to such terms from time to time in the Indenture.

         1.2 CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms have the following meanings:

                  "Accounts" means any and all "accounts," as such term is
         defined in the UCC, whether now existing or hereafter arising or
         acquired by a Guarantor, and in any event includes all accounts
         receivable, contract rights, rights to payment and other obligations of
         any kind owed to a Guarantor arising out of or in connection with the
         sale or lease of merchandise, goods or commodities or the rendering of
         services or arising from any other transaction, however evidenced, and
         whether or not earned by performance, all guaranties, indemnities and
         security with respect to the foregoing, and all letters of credit
         relating thereto, in each case whether now existing or hereafter
         acquired or arising.

                  "Agreement" has the meaning set forth in the preamble.

                  "Books" means all books, records and other written, electronic
         or other documentation in whatever form maintained now or hereafter by
         or for a Guarantor in connection with the ownership of its assets or
         the conduct of its business or evidencing or containing information
         relating to the Collateral, including (i) ledgers, (ii) records
         indicating, summarizing, or evidencing such Guarantor's assets
         (including Inventory and Rights to Payment), business operations or
         financial condition, (iii) computer programs and software, (iv)
         computer discs, tapes, files, manuals, spreadsheets, (v) computer
         printouts and output of whatever kind, (vi) any other computer prepared
         or electronically stored, collected or reported information and
         equipment of any kind and (vii) any and all other rights now or
         hereafter arising out of any contract or agreement between a Guarantor
         and any service bureau, computer or data processing company or other
         Person charged with preparing or maintaining any of such Guarantor's
         books or records or with credit reporting, including with regard to
         such Guarantor's Accounts.

                  "Chattel Paper" means any "chattel paper," as such term is
         defined in the UCC, whether now existing or hereafter arising or
         acquired by a Guarantor.

                  "Collateral" has the meaning specified in Section 2.1.

                  "Company" has the meaning set forth in the first preliminary
         statement.

                  "Deposit Account" means any demand, time, savings, passbook or
         like account now or hereafter maintained by or for the benefit of a
         Guarantor with a bank, savings and loan association, credit union or
         like organization and all funds and amounts therein, whether or not
         restricted or designated for a particular purpose.

                  "Documents" means any and all "documents," as such term is
         defined in the UCC, including without limitation all documents of
         title, bills of lading, dock warrants, dock receipts, warehouse
         receipts and other documents of a Guarantor, whether or not negotiable,
         and includes all other documents which purport to be issued by a bailee
         or agent and purport to cover goods in any bailee's or agent's
         possession which are either identified or are tangible portions of an
         identified mass, including such documents of title made available to a
         Guarantor for the purpose of ultimate sale or exchange of goods or for
         the purpose of loading, unloading, storing, shipping, transshipping,
         manufacturing, processing or otherwise dealing with goods in a manner
         preliminary to their sale or exchange, in each case whether now
         existing or hereafter acquired or arising.

                  "Equipment" means all "equipment," as such term is defined in
         the UCC, whether now existing or hereafter acquired by a Guarantor in
         all of its forms, wherever located, and in any event includes any and
         all machinery, furniture, equipment, furnishings and fixtures in which
         a Guarantor now or hereafter acquires any right, and all other goods
         and tangible personal property (other than Inventory), including tools,
         parts and supplies, computer and other electronic data processing
         equipment and other office equipment, computer programs and related
         data processing software, and all additions, substitutions,
         replacements, parts, accessories, and accessions to and for the
         foregoing, now owned or hereafter acquired, and including any of the
         foregoing which are or are to become fixtures on real property.

                  "Financing Statements" has the meaning specified in Section 3.

                  "Fixtures" shall mean any "fixtures" as such term is defined
         in the UCC, whether now owned or hereafter acquired by a Guarantor.

                  "General Intangibles" means any "general intangibles," as such
         term is defined in the UCC, whether now existing or hereafter arising
         or acquired by a Guarantor, and in any event includes (i) all tax and
         other refunds, rebates or credits of every kind and nature to which
         Guarantor is now or hereafter may become entitled, (ii) all goodwill,
         choses in action and causes of action, whether legal or equitable,
         whether in contract or tort and however arising, (iii) all Intellectual
         Property Collateral, (iv) all uncertificated securities and interests
         in limited and general partnerships and limited liability companies,
         (v) all rights of stoppage in transit, replevin and reclamation, (vi)
         all licenses, permits, consents, indulgences and rights of whatever
         kind issued in favor of or otherwise recognized as belonging to a
         Guarantor by any Governmental Authority and (vii) all indemnity
         agreements, guaranties, insurance policies and other contractual,
         equitable and legal rights of whatever kind or nature; in each case
         whether now existing or hereafter acquired or arising.

                  "Governmental Authority" means any nation or government, any
         state or other political subdivision thereof, any entity exercising
         executive, legislative, judicial, regulatory or administrative
         functions of or pertaining to government and any corporation or other
         entity owned or controlled, through stock or capital ownership or
         otherwise, by any of the foregoing.

                  "Guarantor" has the meaning set forth in the preamble.

                  "Guaranty" has the meaning set forth in the second preliminary
         statement.

                  "Indenture" has the meaning set forth in the first preliminary
         statement.

                  "Insolvency Default" means a Default under Section
         9.01(a)(vii) or Section 9.01(a)(viii) of the Indenture.

                  "Instruments" means any and all negotiable instruments,
         certificated securities and every other writing which evidences a right
         to the payment of money, in each case whether now existing or hereafter
         acquired by a Guarantor.

                  "Intellectual Property Collateral" means the following
         properties and assets owned or held by a Guarantor or in which a
         Guarantor otherwise has any interest, now existing or hereafter
         acquired or arising:

         (A)      all patents and patent applications, domestic or foreign, all
                  licenses relating to any of the foregoing and all income and
                  royalties with respect to any licenses (including without
                  limitation such patents, patent applications and patent
                  licenses as described in Schedule E), present or future
                  infringement thereof, all rights arising therefrom and
                  pertaining thereto and all reissues, divisions, continuations,
                  renewals, extensions and continuations-in-part thereof;

         (B)      all copyrights and applications for copyright, domestic or
                  foreign, together with the underlying works of authorship
                  (including titles), whether or not the underlying works of
                  authorship have been published and whether said copyrights are
                  statutory or arise under the common law, and all other rights
                  and works of authorship, all rights, claims and demands in any
                  way relating to any such copyrights or works, including
                  royalties and rights to sue for past, present or future
                  infringement, and all rights of renewal and extension of
                  copyright;

         (C)      all state (including common law), federal and foreign
                  trademarks, service marks and trade names, and applications
                  for registration of such trademarks, service marks and trade
                  names, all licenses relating to any of the foregoing and all
                  income and royalties with respect to any licenses (including
                  without limitation such marks, names, applications and
                  licenses as described in Schedule E), whether registered or
                  unregistered and wherever registered, all rights to sue for
                  past, present or future infringement or unconsented use
                  thereof, all rights arising therefrom and pertaining thereto
                  and all reissues, extensions and renewals thereof;

         (D)      all trade secrets, confidential information, customer lists,
                  license rights, advertising materials, operating manuals,
                  methods, processes, know-how, sales literature, drawings,
                  specifications, blue prints, descriptions, inventions name
                  plates and catalogs; and

         (E)      the entire goodwill of or associated with the businesses now
                  or hereafter conducted by a Guarantor connected with an
                  symbolized by any of the aforementioned properties and assets.

                  "Inventory" means any "inventory," as such term is defined in
         the UCC, wherever located, whether now owned or hereafter acquired by a
         Guarantor, and in any event includes all goods (including goods in
         transit) which are held for sale, lease or other disposition, including
         those held for display or demonstration or out on lease or consignment
         or to be furnished under a contract of service, or which are raw
         materials, work in process, finished goods or materials used or
         consumed in a Guarantor's business, and the resulting product or mass,
         and all repossessed, returned, rejected, reclaimed and replevied goods,
         together with all parts, components, supplies, packing and other
         materials used or usable in connection with the manufacture,
         production, packing, shipping, advertising, selling or furnishing of
         such goods; and all other items hereafter acquired by a Guarantor by
         way of substitution, replacement, return, repossession or otherwise,
         and all additions and accessions thereto, and any Document representing
         or relating to any of the foregoing at any time.

                  "Investment Property" shall have the meaning ascribed thereto
         in Section 9-115 of the UCC in those jurisdictions in which such
         definition has been adopted and shall include without limitation (i)
         all securities, whether certificated or uncertificated, stocks, bonds,
         interests in limited liability companies, partnership interests,
         treasuries, certificates of deposit, and mutual fund shares, (ii) all
         securities entitlements of a Guarantor including without limitation,
         the rights of a Guarantor to any securities account of a Guarantor and
         financial assets held by a securities intermediary in such securities
         account and any fee, credit balance or other money owing by any
         securities intermediary with respect to that account, (iii) all
         securities accounts held by a Guarantor, (iv) all commodity contracts
         held by the Company and (v) all commodity accounts held by a Guarantor.

                  "Lien" means any mortgage, deed of trust, pledge,
         hypothecation, assignment, collateral deposit arrangement, security
         interest, encumbrance for the payment of money, lien (statutory or
         other), preference, right of setoff, priority or other security
         agreement or preferential arrangement of any kind or nature whatsoever,
         including, without limitation, any conditional sale or other title
         retention agreement, the interest of a lessor under a capital lease,
         any financing lease having substantially the same economic effect as
         any of the foregoing, and the filing of any financing statement (other
         than a financing statement filed by a "true" lessor under Section 9-408
         of the UCC) naming the owner of the asset to which such Lien relates as
         debtor, under the UCC or other comparable law of any jurisdiction.

                  "Majority Holders" means Holders having at least 25% in
         principal amount of the Outstanding Securities.

                  "Permitted Liens" means, without duplication (i) Liens on new
         receivables securing any Working Capital Facility, (ii) Liens incurred
         and pledges and deposits made in the ordinary course of business in
         connection with liability insurance, workers' compensation,
         unemployment insurance, old-age pensions, and other social security
         benefits other than in respect of employee benefit plans subject to the
         Employee Retirement Income Security Act of 1974, as amended, (iii)
         Liens imposed by law, such as carriers', warehousemen's, mechanics',
         materialmen's, and vendor's Liens, incurred in the ordinary course of
         business and securing obligations which are not yet due or which are
         being contested in good faith by appropriate proceedings, (iv) Liens
         securing the payment of taxes, assessments, and governmental charges or
         levies, either (a) not delinquent or (b) being contested in good faith
         by appropriate legal or administrative proceedings and as to which
         adequate reserves shall have been established on the books of the
         relevant Person in conformity with GAAP, (v) zoning restrictions,
         easements, rights of way, reciprocal easement agreements, operating
         agreements, covenants, conditions, or restrictions on the use of any
         parcel of property that are routinely granted in real estate
         transactions or do not interfere in any material respect with the
         ordinary conduct of the business of the Guarantors or the value of such
         property for the purpose of such business, (vi) Liens on property
         existing at the time such property is acquired, (vii) purchase money
         Liens upon or in any property acquired or held in the ordinary course
         of business to secure Indebtedness incurred solely for the purpose of
         financing the acquisition of such property, (viii) Liens on the assets
         of any Subsidiary of a Guarantor at the time such Subsidiary is
         acquired, (ix) Liens with respect to obligations in outstanding amounts
         not to exceed $5,000,000 for the Company and the Guarantors on a
         consolidated basis at any particular time and that (a) are not incurred
         in connection with the borrowing of money or obtaining advances or
         credit (other than trade credit in the ordinary course of business) and
         (b) do not in the aggregate interfere in any material respect with the
         ordinary conduct of the business of the Company and the Guarantors, (x)
         deposits to secure the performance of bids, trade contracts (other than
         for borrowed money), leases, statutory obligations, surety and appeal
         bonds, performance bonds and other obligations of a like nature
         incurred in the ordinary course of the business of the Guarantors, (xi)
         Liens resulting from any judgment or award, the time for the appeal or
         petition for rehearing of which shall not have expired, or in respect
         of which (a) such Guarantor shall in good faith be prosecuting an
         appeal or proceeding for a review, (b) a stay of execution pending such
         appeal or proceeding for review shall be in effect and (c) such
         Guarantor shall have established on its books adequate reserves in
         accordance with GAAP, (xii) rights of banks to set off deposits against
         Indebtedness owed to such banks whether arising by law or pursuant to
         deposit, cash collateral or similar agreements and (xiii) any
         extension, renewal or replacement, in whole or in part, of any Lien
         described in the foregoing clauses; provided, that any such extension,
         renewal or replacement Lien is limited to the property or assets
         covered by the Lien extended, renewed or replaced or substitute
         property or assets, the value of which is not materially greater than
         the value of the property or assets for which the substitute property
         or assets are substituted.

                  "Proceeds" means "proceeds," as such term is defined in the
         UCC, and in any event, includes whatever is receivable or received from
         or upon the sale, lease, license, collection, use, exchange or other
         disposition, whether voluntary or involuntary, of any Collateral or
         other assets of a Guarantor, any and all proceeds of any insurance,
         indemnity, warranty or guaranty payable to or for the account of a
         Guarantor from time to time with respect to any of the Collateral, any
         and all payments (in any form whatsoever) made or due and payable to a
         Guarantor from time to time in connection with any requisition,
         confiscation, condemnation, seizure or forfeiture of all or any part of
         the Collateral by any Governmental Authority (or any Person acting
         under color of Governmental Authority), any and all other amounts from
         time to time paid or payable under or in connection with any of the
         Collateral or for or on account of any damage or injury to or
         conversion of any Collateral by any Person, any and all other tangible
         or intangible property received upon the sale or disposition of
         Collateral, and all proceeds of proceeds.

                  "Rights to Payment" means all Accounts, and any and all rights
         and claims to the payment or receipt of money or other forms of
         consideration of any kind in, to and under all Chattel Paper,
         Documents, General Intangibles, Instruments and Proceeds.

                  "Secured Obligations" means the obligations of each Guarantor
         under the Guaranty.

                  "Transaction Documents" means the Indenture, the Collateral
         Security Documents and any and all other agreements, instruments and
         documents executed or delivered in connection therewith.

                  "Trustee" has the meaning set forth in the preamble.

                  "UCC" means the Uniform Commercial Code as the same may, from
         time to time, be in effect in the State of New York; provided, in the
         event that, by reason of mandatory provisions of law, any or all of the
         attachment, perfection or priority of the security interest in any
         Collateral is governed by the Uniform Commercial Code as in effect in a
         jurisdiction other than the State of New York, the term "UCC" shall
         mean the Uniform Commercial Code as in effect in such other
         jurisdiction for purposes of the provisions hereof relating to such
         attachment, perfection or priority and for purposes of definitions
         related to such provisions.

         1.3 TERMS DEFINED IN UCC. Where applicable and except as otherwise
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.

         SECTION 2.        SECURITY INTEREST

         2.1 GRANT OF SECURITY INTEREST. As security for the payment and
performance of the Secured Obligations, and to induce the Trustee to enter into
the Indenture and the Holders to accept and exchange the Securities and to
authenticate the Securities as provided therein, each Guarantor grants, pledges,
assigns, transfers, hypothecates and sets over to the Trustee for the benefit of
itself and the Holders, a security interest in all of such Guarantor's right,
title and interest in, to and under the following property, wherever located and
whether now existing or owned or hereafter acquired or arising (collectively,
the "Collateral"): (i) all Accounts; (ii) all Chattel Paper; (iii) all Deposit
Accounts; (iv) all Documents; (v) all General Intangibles; (vi) all Instruments;
(vii) all Books; (viii) all Fixtures; (ix) all Investment Property; (x) all
Equipment, (xi) all Inventory, (xii) all money, cash or cash equivalents; and
(xiii) all products and Proceeds of any and all of the foregoing; provided, that
the Collateral will not include (a) General Intangibles which by their terms are
unassignable to the extent that consent to such an assignment is not obtained
and (b) intent to use trademark applications to the extent the pledge and
assignment hereunder renders such trademark applications void or voidable.

         2.2 GUARANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding, (i) each Guarantor shall remain liable under any contracts,
agreements and other documents included in the Collateral, to the extent set
forth therein, to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (ii) the exercise by the
Trustee of any of the rights hereunder shall not release any Guarantor from any
of its duties or obligations under such contracts, agreements and other
documents included in the Collateral and (iii) neither the Trustee nor any
Holder shall have any obligation or liability under any contracts, agreements
and other documents included in the Collateral by reason of this Agreement, nor
shall the Trustee or any Holder be obligated to perform any of the obligations
or duties of a Guarantor thereunder or to take any action to collect or enforce
any such contract, agreement or other document included in the Collateral
hereunder.

         2.3 CONTINUING SECURITY INTEREST. Each Guarantor agrees that this
Agreement shall create a continuing security interest in the Collateral which
shall remain in effect until terminated in accordance with Section 11.15.

         SECTION 3.        FINANCING STATEMENTS ETC.

         The Guarantors shall execute, deliver, file and record concurrently
with the execution of this Agreement, and at any time and from time to time
thereafter, all financing statements, continuation financing statements,
termination statements, security agreements, chattel mortgages, assignments,
patent, copyright and trademark collateral assignments, fixture filings, blocked
account agreements, warehouse receipts, documents of title, affidavits, reports,
notices, schedules of account, letters of authority and all other documents and
instruments, in form satisfactory to the Trustee (the "Financing Statements"),
and take all other action, at Guarantors' expense, to perfect and continue
perfected, maintain the priority of or provide notice of the Trustee's security
interest in the Collateral and to accomplish the purposes of this Agreement.

         SECTION 4.        REPRESENTATIONS AND WARRANTIES

         In addition to and not in limitation of the representations and
warranties of the Guarantors set forth in the Guaranty, each Guarantor
represents and warrants to the Trustee that:

         4.1 LOCATION OF CHIEF EXECUTIVE OFFICE AND COLLATERAL. Each Guarantor's
chief executive office, corporate office and principal place of business is
located at the address set forth in Schedule A, and all other locations where
such Guarantor conducts business or Collateral is kept are set forth in Schedule
A.

         4.2 LOCATIONS OF BOOKS. All locations where Books pertaining to the
Rights to Payment are kept, including all equipment necessary for accessing such
Books and the names and addresses of all service bureaus, computer or data
processing companies and other Persons keeping any Books or collecting Rights to
Payment for each Guarantor, are set forth in Schedule B.

         4.3 TRADE NAMES AND TRADE STYLES. All trade names and trade styles
under which each Guarantor presently conducts its business operations are set
forth in Schedule C, and, except as set forth in Schedule C, no Guarantor has,
at any time during the preceding five years (i) been known as or used any other
corporate, trade or fictitious name, (ii) changed its name, (iii) been the
surviving or resulting corporation in a merger or consolidation or (iv) acquired
through asset purchase or otherwise any business of any Person.

         4.4 OWNERSHIP OF COLLATERAL. Each Guarantor is, and, except as
permitted by Section 5.9, will continue to be, the legal and beneficial owner of
the Collateral (or, in the case of after-acquired Collateral, at the time such
Guarantor acquires rights in such Collateral, will be the legal and beneficial
owner thereof), and has good, indefeasible and merchantable title to the
Collateral free and clear of any and all Liens other than Permitted Liens.

         4.5 ENFORCEABILITY; PRIORITY OF SECURITY INTEREST. (i) This Agreement
creates a valid and continuing security interest which is enforceable against
the Collateral in which each Guarantor now has rights and will create a security
interest which is enforceable against the Collateral in which such Guarantor
hereafter acquires rights at the time such Guarantor acquires any such rights
and (ii) subject to Permitted Liens and assuming the filing by such Guarantor of
the Financing Statements, the possession of Instruments and the control over
Investment Property, the Trustee has a perfected and first priority security
interest in the Collateral in which each Guarantor now has rights, and will have
a perfected and first priority security interest in the Collateral in which such
Guarantor hereafter acquires rights at the time such Guarantor acquires any such
rights, in each case for the Trustee's own benefit or for the benefit of the
Holders, and in each case securing the payment and performance of the Secured
Obligations. All action necessary or desirable to protect and perfect such
security interest in the existing Collateral under the UCC has been duly taken.

         4.6 OTHER FINANCING STATEMENTS. Other than (i) financing statements or
similar filings naming the owner of the asset to which such lien relates as
debtor, under the UCC or any comparable law ("UCC Financing Statements")
disclosed to the Trustee and filed in connection with the Permitted Liens and
(ii) UCC Financing Statements in favor of the Trustee in its capacity as Trustee
for the benefit of itself and the Holders under the Indenture and any other
Transaction Documents, no effective UCC Financing Statement naming a Guarantor
as debtor, assignor, Guarantor, mortgagor, pledgor or the like and covering all
or any part of the Collateral is on file in any filing or recording office in
any jurisdiction.

         4.7 RIGHTS TO PAYMENT. The Rights to Payment represent valid, binding
and enforceable obligations of the account debtors or other Persons obligated
thereon, representing undisputed, bona fide transactions completed in accordance
with the terms and provisions contained in any documents related thereto, and
are and will be genuine, free from Liens other than Permitted Liens, and not
subject to any adverse claims, counterclaims, setoffs, defaults, disputes,
defenses, discounts, retainages, holdbacks or conditions precedent of any kind
of character, except to the extent permitted under the Indenture and for
ordinary course setoffs and asserted claims or to the extent, if any, that such
account debtors or other Persons may be entitled to normal and ordinary course
trade discounts, returns, adjustments and allowances in accordance with Section
5.15, or as otherwise disclosed to the Trustee in writing;

         (A)      no Guarantor has assigned any of its rights under the Rights
                  to Payment except as provided in this Agreement or as set
                  forth in the Indenture or other Transaction Documents; and

         (B)      no Guarantor has knowledge of any fact or circumstance which
                  would impair the validity or collectible of any of the Rights
                  to Payment.

         4.8 INVENTORY. With respect to any Inventory in which the Trustee is
granted a security interest pursuant to the terms of this Agreement, (i) such
Inventory is located at the locations set forth on Schedule A, (ii) no Inventory
is now, or shall at any time or times hereafter be stored with a bailee,
warehouseman or similar party (except as disclosed on Schedule D) without the
Trustee's prior written consent, and if the Trustee gives such written consent,
the Guarantors will concurrently therewith at the Trustee's reasonable request
use its best efforts to cause any such bailee, warehouseman or similar party to
issue and deliver to the Trustee in form and substance acceptable to the
Trustee, warehouse receipts therefor in the Trustee's name, (iii) such Inventory
is of good and merchantable quality, free from any material defects, (iv) such
Inventory is not subject to any licensing, patent, royalty, trademark, trade
name or copyright agreements with any third parties which would require any
consent of any third party upon sale or disposition of that Inventory or the
payment of any monies to any third party as a precondition of such sale or other
disposition and (v) the completion of manufacture, sale or other disposition of
such Inventory by the Trustee following a Default or an Event of Default will
not require the consent of any Person and will not constitute a breach or
default under any contract or agreement to which a Guarantor is a party or to
which such Inventory is subject.

         4.9 INTELLECTUAL PROPERTY. Except as set forth in Schedule E, the
Guarantors do not own, possess or use under any licensing arrangement any
patents, copyrights, trademarks, service marks or trade names, nor is there
currently pending before any Governmental Authority any application for
registration of any patent, copyright, trademark, service mark or trade name;

         (A)      all patents, copyrights, trademarks, service marks and trade
                  names are subsisting and none have been adjudged invalid or
                  unenforceable in whole or in part;

         (B)      all maintenance fees required to be paid on account of any
                  patents have been timely paid for maintaining such patents in
                  force, and, to the Guarantor's knowledge, each of the patents
                  is valid and enforceable;

         (C)      to the Guarantor's knowledge after due inquiry, no material
                  infringement or unauthorized use presently is being made of
                  any Intellectual Property Collateral by any Person;

         (D)      each Guarantor is the sole and exclusive owner of the
                  Intellectual Property Collateral identified on Schedule E
                  (other than Intellectual Property Collateral licensed by such
                  Guarantor) and the past, present and contemplated future use
                  of such Intellectual Property Collateral by the Guarantors has
                  not, does not and will not infringe or violate any right,
                  privilege or license agreement of or with any other Person;
                  and

         (E)      each Guarantor either owns, has material rights under, is a
                  party to, or an assignee of a party to all material licenses,
                  patents, patent applications, copyrights, service marks,
                  trademarks, trademark applications, trade names and all other
                  Intellectual Property Collateral necessary to continue to
                  conduct its business as heretofore conducted.

         4.10 EQUIPMENT. None of the Equipment or other Collateral is affixed to
real property, except Collateral with respect to which the Guarantors have made
all fixture filings required to perfect and protect the priority of the
Trustee's security interest in all such Collateral which may be fixtures as
against all Persons having an interest in the premises to which such property
may be affixed.

         4.11 DEPOSIT ACCOUNTS. The names and addresses of all financial
institutions at which the Guarantors maintain their respective Deposit Accounts,
and the account numbers and account names of such Deposit Accounts, are set
forth in Schedule F.

         4.12 CHATTEL PAPER AND INSTRUMENTS. All action necessary to protect and
perfect the security interest of the Trustee in all Instruments (including the
delivery of all originals thereof to the Trustee) has been duly taken. With
respect to Chattel Paper in which the Trustee is granted a security interests
under the terms of this Agreement:

         (A)      all action necessary to protect and perfect the security
                  interest in the specific goods underlying Chattel Paper has
                  been duly taken;

         (B)      all original documentation evidencing Chattel Paper is in the
                  possession of the Guarantors; and

         (C)      all original documentation evidencing Chattel Paper has been
                  marked with a legend as described in Section 5.13.

         SECTION 5.        COVENANTS

         In addition to and not in limitation of the covenants of the Guarantors
set forth in the Guaranty, so long as any of the Secured Obligations remain
unsatisfied, each Guarantor agrees that:

         5.1 DEFENSE OF COLLATERAL. Each Guarantor will defend the Collateral
against all claims and demands of all Persons at any time claiming the same or
any interest therein adverse to the Trustee other than holders of Permitted
Liens.

         5.2 PRESERVATION OF COLLATERAL. Each Guarantor shall maintain, preserve
and protect the Collateral which is used or useful in its business in good
working order and condition, ordinary wear and tear excepted and make all
necessary repairs thereto and renewals and replacements thereof except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, except as permitted by the Indenture.

         5.3 COMPLIANCE WITH LAWS, ETC. Each Guarantor will comply with all
requirements of law of any Governmental Authority having jurisdiction over it or
its business (including the Federal Fair Labor Standards Act) relating in a
material way to the possession, operation, maintenance and control of the
Collateral, except such as may be contested in good faith or as to which a bona
fide dispute may exist and except to the extent that noncompliance could not
reasonably be expected to materially adversely affect the value of the
Collateral or the worth of the collateral as collateral security or have a
Material Adverse Effect.

         5.4 LOCATION OF BOOKS AND CHIEF EXECUTIVE OFFICE. Each Guarantor will
(i) keep all Books pertaining to the Rights to Payment at the locations set
forth in Schedule B and (ii) give at least thirty days' prior written notice to
the Trustee of (a) any changes in any such location where Books pertaining to
the Rights to Payment are kept, including any change of name or address of any
service bureau, computer or data processing company or other Person preparing or
maintaining any Books or collecting Rights to Payment for such Guarantor or (b)
any changes in the location of such Guarantor's chief executive office or
principal place of business.

         5.5 LOCATION OF COLLATERAL AND DEPOSIT ACCOUNTS. Each Guarantor will
(i) keep the Collateral at the locations set forth in Schedule A or Schedule D
and not remove the Collateral from such locations (other than Collateral in
transit between locations listed in Schedule A or Schedule D in the ordinary
course of business and disposals of Collateral permitted by clause (i) below)
except upon at least thirty days' prior written notice of any removal to the
Trustee, (ii) give the Trustee at least thirty days' prior written notice of any
change in the locations set forth in Schedule A or Schedule D and (iii) give the
Trustee at least thirty days' prior written notice of the creation and
maintenance of any Deposit Account not set forth on Schedule F.

         5.6 CHANGE IN NAME, IDENTITY OR STRUCTURE. Each Guarantor will give the
Trustee at least thirty days' prior written notice of (i) any change in name,
(ii) any changes in, additions to or other modifications of its trade names and
trade styles set forth in Schedule C and (iii) any changes in its identity or
structure in any manner which might make any Financing Statement filed hereunder
incorrect or misleading in such a manner as would require the refiling of
Financing Statements under the UCC.

         5.7 MAINTENANCE OF RECORDS. Each Guarantor will keep accurate and
complete Books with respect to the Collateral, and such Guarantor shall legend
the Books pertaining to such Collateral with an appropriate disclosure of the
Trustee's security interest hereunder.

         5.8 DISPOSITION OF COLLATERAL. No Guarantor will surrender or lose
possession of (other than to the Trustee), sell, lease, rent, or otherwise
dispose of or transfer any of the Collateral or any right or interest therein,
except to the extent permitted by the Indenture.

         5.9 LIENS. Other than liens in favor of the Trustee in its capacity as
Trustee under the Indenture and Permitted Liens, each Guarantor will keep the
Collateral free of all Liens.

         5.10 EXPENSES. Each Guarantor will maintain, keep and preserve the
Collateral at its own cost and expense in accordance with its customary business
practices.

         5.11 LEASED PREMISES. At the Trustee's request, each Guarantor will use
its best efforts to obtain from each Person from whom such Guarantor leases any
premises at which any Collateral is at any time present such subordination,
waiver, consent and estoppel agreements as the Trustee may reasonably require,
in form and substance reasonably satisfactory to the Trustee.

         5.12     RIGHTS TO PAYMENT.  Each Guarantor will:

         (A)      with such frequency as the Trustee may reasonably require upon
                  the occurrence and during the continuance of an Insolvency
                  Default or an Event of Default, furnish to the Trustee (i)
                  master customer listings, including all names and addresses,
                  together with copies or originals (as requested by the
                  Trustee) of documents, customer statements, repayment
                  histories and present status reports relating to the Accounts,
                  (ii) accurate records and summaries of Accounts, including
                  detailed agings specifying the name, face value and date of
                  each invoice, and listings of Accounts that are disputed or
                  have been canceled and (iii) such other matters and
                  information relating to the Accounts as the Trustee shall from
                  time to time reasonably request;

         (B)      in accordance with its sound business judgment perform and
                  comply in all material respects with its obligations in
                  respect of the Accounts and other Rights to Payment;

         (C)      upon the request of the Trustee (i) at any time, notify all or
                  any designated portion of the account debtors and other
                  obligors on the Rights to Payment of the security interest
                  hereunder and (ii) if an Insolvency Default or an Event of
                  Default has occurred and is continuing, notify the account
                  debtors and other obligors on the Rights to Payment or any
                  designated portion thereof that payment shall be made directly
                  to the Trustee or to such other Person or location as the
                  Trustee shall specify; and

         (D)      establish such lockbox, blocked account or similar
                  arrangements for the payment of the Accounts and other Rights
                  to Payment as the Trustee shall require.

         5.13 DOCUMENTS ETC. Each Guarantor will (i) immediately deliver to the
Trustee, or an agent designated by it, appropriately endorsed or accompanied by
appropriate instruments of transfer or assignment, all Documents and Instruments
and all other Rights to Payment at any time evidenced by promissory notes, trade
acceptances or other instruments and (ii) mark all Documents and Chattel Paper
with the following legend: "This writing and the obligations evidenced or
secured hereby are subject to the security interest of Norwest Bank Minnesota,
National Association, as trustee, for the benefit of itself and certain
holders." With respect to Chattel Paper in which the Trustee is granted a
security interests under the terms of this Agreement, each Guarantor will

         (A)      take all action necessary to protect and perfect the security
                  interest in the specific goods underlying Chattel Paper;

         (B)      take possession of all original documentation evidencing
                  Chattel Paper; and

         (C)      not sell or transfer any Chattel Paper, whether in the
                  ordinary course of business or otherwise.

         5.14     INVENTORY.  Each Guarantor will:

         (A)      at such times as the Trustee shall reasonably request but in
                  any event not more than once each fiscal year, prepare and
                  deliver to the Trustee a report of all Inventory, in form and
                  substance satisfactory to the Trustee; and

         (B)      upon the request of the Trustee after an Insolvency Default or
                  an Event of Default has occurred and is continuing, take a
                  physical listing of the Inventory and promptly deliver a copy
                  of such physical listing to the Trustee.

         5.15     EQUIPMENT.  Each Guarantor will:

         (A)      upon the Trustee's reasonable request but in any event not
                  more than once each fiscal year, prepare and deliver to the
                  Trustee a report of each item of Equipment, in form and
                  substance satisfactory to the Trustee; and

         (B)      upon the request of the Trustee after an Insolvency Default or
                  an Event of Default has occurred and is continuing, take a
                  physical listing of the Equipment and promptly deliver a copy
                  of such physical listing to the Trustee.

         5.16     INTELLECTUAL PROPERTY COLLATERAL.  Each Guarantor will:

         (A)      not enter into any agreements or transactions (including any
                  license or royalty agreement) pertaining to any Intellectual
                  Property Collateral except in the ordinary course of business;

         (B)      if reasonably within such Guarantor's abilities, not allow or
                  suffer any Intellectual Property Collateral to become
                  abandoned, nor any registration thereof to be terminated,
                  forfeited, expired or dedicated to the public unless such
                  Intellectual Property Collateral is no longer useful or
                  necessary to the operation of its business;

         (C)      diligently prosecute all applications for patents, copyrights
                  and trademarks useful and necessary to the operation of its
                  business, and file and prosecute any and all continuations,
                  continuations-in-part, applications for reissue, applications
                  for certificate of correction and like matters as shall be
                  reasonable and appropriate in accordance with prudent business
                  practice, and promptly and timely pay any and all maintenance,
                  license, registration and other fees, taxes and expenses
                  incurred in connection with any Intellectual Property
                  Collateral; and

         (D)      provide the Trustee on a quarterly basis with a list of all
                  new applications and registrations for United States and
                  foreign patents, copyrights, trademarks, service marks or
                  trade names, which such new applications and registrations
                  shall be subject to the terms and conditions of the Indenture
                  and this Agreement.

         5.17 NOTICES, REPORTS AND INFORMATION. Each Guarantor will (i) furnish
to the Trustee such statements and schedules further identifying and describing
the Collateral and such other reports and other information in connection with
the Collateral as the Trustee may reasonably request, all in reasonable detail
and (ii) upon the reasonable request of the Trustee make such demands and
requests for information and reports as such Guarantor is entitled to make in
respect of the Collateral.

         5.18 FURTHER ASSURANCES; PLEDGE OF INSTRUMENTS. At any time and from
time to time and at the sole expense of the Guarantors, each Guarantor shall
promptly and duly execute and deliver any and all such further instruments and
documents and take such further actions as are necessary to obtain the full
benefits of this Agreement and of the rights and powers herein granted,
including without limitation (i) upon the written request of the Trustee, using
its best efforts to secure all consents and approvals necessary or appropriate
for the assignment to or for the benefit of the Trustee for the benefit of
itself and the Holders, of any license or contract held by such Guarantor or to
which such Guarantor has any rights not heretofore assigned, or any other
General Intangible which by its terms is unassignable, (ii) in accordance with
Section 5.02 of the Indenture, filing any financing or continuation statements
under the UCC with respect to the Liens and security interests granted hereunder
or under any other Transaction Document, (iii) transferring Collateral to the
Trustee's possession for the benefit of itself and the Holders (if a security
interest in such Collateral can be perfected only by possession, but not
including any Collateral consisting of Chattel Paper, which shall remain in such
Guarantor's possession in accordance with Section 4.12 hereof) and (iv) using
its best efforts to obtain waivers of Liens, if any exist, from landlords and
mortgagees in accordance with the Indenture. Each Guarantor also hereby
authorizes the Trustee, for the benefit of itself and the Holders to file any
such financing or continuation statements without the signature of such
Guarantor to the extent permitted by applicable law. If any amount payable under
or in connection with any of the collateral is or shall become evidenced by any
Instrument, such Instruments, other than checks and Securities received in the
ordinary course of business, shall be duly endorsed in a manner satisfactory to
the Trustee immediately upon such Guarantor's receipt thereof.

         5.19 RIGHT OF INSPECTION. The Trustee, or any agent or employee
designated by the Trustee in writing, has the right, from time to time after the
date of this Agreement, to call at the Guarantor's place or places of business
(or any other place where the Collateral or any information relating to the
Collateral is kept or located) during reasonable business hours and, without
unreasonable hindrance or delay, (i) to inspect, audit, check and make copies of
and extracts from the Guarantor's books, records, journals, orders, receipts and
any correspondence and other data relating to the Guarantor's business or to any
transactions between the parties thereto and (ii) to make such verification
concerning the Collateral as the Trustee may consider reasonable under the
circumstances.

         SECTION 6.        COLLECTION OF RIGHTS TO PAYMENT

         Until the Trustee exercises its rights hereunder to collect Rights to
Payment, each Guarantor shall endeavor in the first instance diligently to
collect all amounts due or to become due on or with respect to the Rights to
Payment. At the request of the Trustee, upon and after the occurrence of any
Default or Event of Default, all remittances received by the Guarantors shall be
held in trust for the Trustee and, in accordance with the Trustee's
instructions, remitted to the Trustee or deposited to an account with the
Trustee in the form received (with any necessary endorsements or instruments of
assignment or transfer).

         SECTION 7.        AUTHORIZATION; TRUSTEE APPOINTED ATTORNEY-IN-FACT
         Each Guarantor hereby irrevocably constitutes and appoints the Trustee,
for the benefit of itself, the Holders and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Guarantor and in
the name of such Guarantor or in its own name, from time to time in the
Trustee's sole discretion for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute and deliver any
and all documents which may be necessary or desirable to accomplish the purposes
of this Agreement and, without limiting the generality of the foregoing, hereby
grants to the Trustee, for the benefit of itself and the Holders, the power and
right, on behalf of such Guarantor, without notice to or assent by such
Guarantor, and at any time, to do the following:

         (A)      sign any of the Financing Statements which must be executed or
                  filed to perfect or continue perfected, maintain the priority
                  of or provide notice of the Trustee's security interest in the
                  Collateral;

         (B)      take possession of and endorse any securities, acceptances,
                  checks, drafts, money orders or other forms of payment or
                  security and collect any Proceeds of any Collateral;

         (C)      sign and endorse any invoice or bill of lading relating to any
                  of the Collateral, warehouse or storage receipts, drafts
                  against customers or other obligors, assignments, notices of
                  assignment, verifications and notices to customers or other
                  obligors;

         (D)      notify the United States Postal Service authorities to change
                  the address for delivery of mail addressed to such Guarantor
                  to such address as the Trustee may designate and, without
                  limiting the generality of the foregoing, establish with any
                  Person lockbox or similar arrangements for the payment of the
                  Rights to Payment;

         (E)      receive, open and dispose of all mail addressed to such
                  Guarantor;

         (F)      send requests for verification of Rights to Payment to the
                  customers or other obligors of such Guarantor;

         (G)      contact, or direct such Guarantor to contact, all account
                  debtors and other obligors on the Rights to Payment and
                  instruct such account debtors and other obligors to make all
                  payments directly to the Trustee;

         (H)      assert, adjust, sue for, compromise or release any claims
                  under any policies of insurance;

         (I)      exercise dominion and control over, and refuse to permit
                  further withdrawals from, Deposit Accounts maintained with the
                  Trustee;

         (J)      notify each Person maintaining lockbox or similar arrangements
                  for the payment of the Rights to Payment to remit all amounts
                  representing collections on the Rights to Payment directly to
                  the Trustee;

         (K)      ask, demand, collect, receive and give acquittances and
                  receipts for any and all Rights to Payment, enforce payment or
                  any other rights in respect of the Rights to Payment and other
                  Collateral, grant consents, agree to any amendments,
                  modifications or waivers of the agreements and documents
                  governing the Rights to Payment and other Collateral, and
                  otherwise file any claims, take any action or institute,
                  defend, settle or adjust any actions, suits or proceedings
                  with respect to the Collateral, as the Trustee may deem
                  necessary or desirable to maintain, preserve and protect the
                  Collateral, to collect the Collateral or to enforce the rights
                  of the Trustee with respect to the Collateral;

         (L)      execute any and all applications, documents, papers and
                  instruments necessary for the Trustee to use the Intellectual
                  Property Collateral and grant or issue any exclusive or
                  non-exclusive license or sublicense with respect to any
                  Intellectual Property Collateral;

         (M)      execute any and all endorsements, assignments or other
                  documents and instruments necessary to sell, lease, assign,
                  convey or otherwise transfer title in or dispose of the
                  Collateral;

         (N)      execute any and all such other documents and instruments, and
                  do any and all acts and things for and on behalf of such
                  Guarantor, which the Trustee may deem necessary or advisable
                  to maintain, protect, realize upon and preserve the
                  Collateral; and

         (O)      execute any and all such other documents and instruments, and
                  do any and all acts and things for and on behalf of such
                  Guarantor, which the Trustee may reasonably deem necessary or
                  advisable to maintain, protect and preserve the Trustee's
                  security interest in the Collateral.

The Trustee agrees that, except upon and during the occurrence of an Insolvency
Default or an Event of Default, it shall not exercise the power of attorney, or
any rights granted to the Trustee, pursuant to clauses (B) through (N) above.
The Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys. The
foregoing power of attorney is coupled with an interest and irrevocable so long
as the Secured Obligations have not been paid and performed in full. Each
Guarantor hereby ratifies, to the extent permitted by law, all that the Trustee
shall lawfully and in good faith do or cause to be done by virtue of and in
compliance with this Section 7.

         SECTION 8.        TRUSTEE  PERFORMANCE OF GUARANTOR OBLIGATIONS

         After a Default or an Event of Default has occurred and is continuing,
Trustee may perform or pay any obligation which a Guarantor has agreed to
perform or pay under or in connection with this Agreement, and the Guarantors
shall reimburse the Trustee on demand for any amounts paid by the Trustee
pursuant to this Section 8.

         SECTION 9.        TRUSTEE'S DUTIES

         Notwithstanding any provision contained in this Agreement, but subject
to the following sentence and Section 5.07 of the Indenture, the Trustee shall
have no duty to exercise any of the rights, privileges or powers afforded to it
and shall not be responsible to any Guarantor, the Company, any Holder (as
defined in the Indenture), subject to the Indenture and the Trust Indenture Act
(as defined in the Indenture) or any other Person for any failure to do so or
delay in doing so. Beyond the exercise of reasonable care to assure the safe
custody of Collateral in the Trustee's possession and the accounting for moneys
actually received by the Trustee hereunder, the Trustee shall have no duty or
liability to exercise or preserve any rights, privileges or powers pertaining to
the Collateral.

         SECTION 10.  REMEDIES

         10.1 REMEDIES. After an Event of Default has occurred and is
continuing, the Trustee shall have, in addition to all other rights and remedies
granted to it in this Agreement, the Indenture or any other Transaction
Document, all rights and remedies of a secured party under the UCC and other
applicable laws. Without limiting the generality of the foregoing, each
Guarantor agrees that the Trustee may:

         (A)      peaceably and without notice enter any premises of the
                  Guarantors, take possession of any the Collateral, remove or
                  dispose of all or part of the Collateral on any premises or
                  elsewhere, or, in the case of Equipment, render it
                  nonfunctional, and otherwise collect, receive, appropriate and
                  realize upon all or any part of the Collateral, and demand,
                  give receipt for, settle, renew, extend, exchange, compromise,
                  adjust, or sue for all or any part of the Collateral, as the
                  Trustee may determine;

         (B)      require the Guarantors to assemble all or any part of the
                  Collateral and make it available to the Trustee at any place
                  and time designated by the Trustee;

         (C)      use or transfer any of the Guarantor's rights and interests in
                  any Intellectual Property Collateral, by license, by
                  sublicense (to the extent permitted by an applicable license)
                  or otherwise, on such conditions and in such manner as the
                  Trustee may determine;

         (D)      secure the appointment of a receiver of the Collateral or any
                  part thereof to the extent and in the manner provided by
                  applicable law;

         (E)      withdraw (or cause to be withdrawn) any and all funds from
                  Deposit Accounts; and

         (F)      sell, resell, lease, use, assign, transfer or otherwise
                  dispose of any or all of the Collateral in its then condition
                  or following any commercially reasonable preparation or
                  processing (utilizing in connection therewith any of the
                  Guarantors' assets, without charge or liability to the Trustee
                  therefor) at public or private sale, by one or more contracts,
                  in one or more parcels, at the same or different times, for
                  cash or credit, or for future delivery without assumption of
                  any credit risk, all as the Trustee deems advisable; provided,
                  that the Guarantors shall be credited with the net proceeds of
                  sale only when such proceeds are finally collected by the
                  Trustee. The Trustee shall have the right upon any such public
                  sale, and, to the extent permitted by law, upon any such
                  private sale, to purchase the whole or any part of the
                  Collateral so sold, free of any right or equity of redemption,
                  which right or equity of redemption each Guarantor hereby
                  releases, to the extent permitted by law. Each Guarantor
                  hereby agrees that the sending of notice by ordinary mail,
                  postage prepaid, to the address of such Guarantor set forth in
                  the Indenture, of the place and time of any public sale or of
                  the time after which any private sale or other intended
                  disposition is to be made, shall be deemed reasonable notice
                  thereof if such notice is sent ten days prior to the date of
                  such sale or other disposition or the date on or after which
                  such sale or other disposition or the date on or after which
                  such sale or other disposition may occur; provided, that the
                  Trustee may provide the Guarantors shorter notice or no
                  notice, to the extent permitted by the UCC or other applicable
                  law.

         10.2 LICENSE. For the purpose of enabling the Trustee to exercise its
rights and remedies under this Section 10, the Company hereby grants, to the
extent it has the power and authority to do so, to the Trustee an irrevocable,
non-exclusive and assignable license (exercisable without payment or royalty or
other compensation to the Guarantors) to use, license or sublicense any
Intellectual Property Collateral.

         10.3 PROCEEDS ACCOUNT. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated at such time as there
may exist an Insolvency Default or an Event of Default, the Trustee may, at its
election, (i) retain the proceeds of any sale, collection, disposition or other
realization upon the Collateral (or any portion thereof) in a special purpose
non-interest bearing restricted deposit account (the "Proceeds Account") created
and maintained by the Trustee for such purpose (which shall constitute a Deposit
Account included within the Collateral hereunder) until such time as the Trustee
may elect to apply such proceeds to the Secured Obligations, and each Guarantor
agrees that such retention of such proceeds by the Trustee shall not be deemed
strict foreclosure with respect thereto, (ii) in any manner elected by the
Trustee, estimate the liquidated amount of any such contingent, unmatured or
unliquidated claims and apply the proceeds of the Collateral against such amount
or (iii) otherwise proceed in any manner permitted by applicable law. Each
Guarantor agrees that the Proceeds Account shall be a blocked account and that
upon the irrevocable deposit of funds into the Proceeds Account, such Guarantor
shall not have any right of withdrawal with respect to such funds. Accordingly,
such Guarantor irrevocably waives until the termination of the security
interests granted under this Agreement in accordance with Section 11.15 the
right to make any withdrawal from the Proceeds Account and the right to instruct
the Trustee to honor drafts against the Proceeds Account.

         10.4 APPLICATION OF PROCEEDS. Subject to Section 10.3, the cash
proceeds actually received from the sale or other disposition or collection of
Collateral upon the exercise of any remedy by the Trustee under this Section 10,
and any other amounts received in respect of the Collateral the application of
which is not otherwise provided for herein, shall be distributed to the Holders
pro rata and applied as follows:

         First: to the payment of the costs and expenses of such sale, including
         reasonable compensation to the Trustee and its agents and attorneys,
         and of any judicial or private proceedings in which such sale may be
         made, and of all other expenses, liabilities and advances made or
         incurred by the Trustee, together with interest on such costs, expenses
         and liabilities and on all advances made by the Trustee from the date
         any such cost, expense or liability is past due or unpaid or any such
         advance is made, in each case until paid in full;

         Second: to the payment of any other fees, costs or other expenses
         constituting obligations under the Transaction Documents other than
         amounts payable under clause "First" above, together with interest on
         each such amount at the interest rate(s) applicable to the Secured
         Obligations pursuant to and in accordance with the Indenture from and
         after the date such amount is due, owing or unpaid until paid in full;

         Third: to the payment of any interest then due, owing or unpaid in
         respect of any Security or any other Secured Obligation from the date
         such amount is due, owing or unpaid until paid in full to be applied in
         accordance with the Indenture;

         Fourth: to the payment of the whole amount of principal then due, owing
         or unpaid in respect of any Security or any other Secured Obligation
         secured by this Agreement, to be applied in accordance with the
         Indenture; and

         Fifth: the surplus, if any, to be paid to the Guarantors or to whomever
         lawfully may be entitled to receive such surplus.

The Guarantors shall remain liable to the Trustee for any deficiency which
exists after any sale or other disposition or collection of Collateral.

         SECTION 11.  MISCELLANEOUS

         11.1 CERTAIN WAIVERS. Each Guarantor waives, to the fullest extent
permitted by law, (i) any right of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of marshaling of
the Collateral or other collateral or security for the Secured Obligations, (ii)
any right to require the Trustee (a) to proceed against any Person, (b) to
exhaust any other collateral or security for any of the Secured Obligations, (c)
to pursue any remedy in the Trustee's power or (d) to make or give any
presentments, demands for performance, notices of nonperformance, protests,
notices of protests or notices of dishonor in connection with any of the
Collateral and (iii) all claims, damages, and demands against the Trustee
arising out of the repossession, retention, sale or application of the proceeds
of any sale of the Collateral.

         11.2 NOTICES. All notices or other communications hereunder shall be
given in the manner and to the addresses specified in the Indenture. All such
notices and other communications shall be effective (i) if delivered by hand or
pre-paid courier service, when delivered, (ii) if sent by mail, upon the earlier
of the date of receipt or five Business Days after deposit in the mail, first
class, postage prepaid, (iii) if sent by telex, upon receipt by the sender of an
appropriate answerback and (iv) if sent by facsimile transmission, upon receipt
of electronic confirmation of receipt.

         11.3 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of the
Trustee to exercise, and no delay in exercising, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative
and not exclusive of any rights, remedies, powers and privileges that may
otherwise be available to the Trustee.

         11.4     COSTS AND EXPENSES; INDEMNIFICATION; OTHER CHARGES.

         (A)      The Guarantors shall pay, indemnify, and hold the Trustee,
                  each Holder and each of their respective Affiliates, officers,
                  directors, employees, counsel, agents and attorneys-in-fact
                  harmless from and against any and all liabilities,
                  obligations, losses, damages, penalties, actions, judgments,
                  suits, costs, charges, expenses or disbursements, of any kind
                  or nature whatsoever in accordance with the terms and
                  conditions of the Indenture except to the extent arising from
                  the Trustee's or such Holder's gross negligence, bad faith,
                  wilful misconduct or fraud.

         (B)      The Guarantors agree to indemnify the Trustee against and hold
                  it harmless from any and all present and future stamp,
                  transfer, or documentary taxes or any other excise or property
                  taxes, charges or similar levies which arise from any payment
                  made hereunder or from the execution, delivery, or
                  registration of, or otherwise with respect to, this Agreement.

         (C)      Any amounts payable to the Trustee and each Holder under this
                  Section 11.4 or otherwise under this Agreement if not paid
                  upon demand shall bear interest from the date of such demand
                  until paid in full, at the rate of interest set forth in the
                  Indenture for the Securities.

         11.5 BINDING EFFECT. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the Guarantors and the Trustee, and their
respective successors and assigns; provided, that the Guarantors may not assign
any of its rights hereunder or interests herein without the written consent of
the Trustee and the Majority Holders. Each Guarantor acknowledges that upon any
assignment or other transfer by the Trustee or any Holder of any of the Secured
Obligations, the Trustee or such Holder may transfer its interest herein, or any
part thereof, to the assignee or transferee, who shall thereupon become vested
with all the rights, remedies, powers, security interests and liens herein
granted to the Trustee or such Holder, or the transferred part thereof, subject,
however, to the restrictions contained herein. No Persons other than the
Guarantors, the Holders, the Trustee and the respective assignees of the Holders
and the Trustee are intended to be benefited hereby or shall have any rights
hereunder, as third-party beneficiaries or otherwise.

         11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK; PROVIDED, THAT THE TRUSTEE
AND THE HOLDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

         11.7 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GUARANTORS AND THE TRUSTEE
FOR THE BENEFIT OF ITSELF AND THE HOLDERS EACH CONSENT, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE
GUARANTORS AND THE TRUSTEE FOR THE BENEFIT OF ITSELF AND THE HOLDERS EACH
IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE GUARANTORS AND THE TRUSTEE
FOR THE BENEFIT OF ITSELF AND THE HOLDERS, EACH WAIVE PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.

         11.8 WAIVER OF JURY TRIAL. THE GUARANTORS AND THE TRUSTEE FOR THE
BENEFIT OF ITSELF AND THE HOLDERS EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL
BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED
TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
GUARANTORS AND THE TRUSTEE FOR THE BENEFIT OF ITSELF AND THE HOLDERS EACH AGREE
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION 11.8
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

         11.9 AMENDMENT. This Agreement shall not be amended except by the
written agreement of the parties as provided in the Indenture.

         11.10 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under all
applicable laws and regulations. If; however, any provision of this Agreement
shall be prohibited by or invalid under any such law or regulation in any
jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform
to the minimum requirements of such law or regulation, or, if for any reason it
is not deemed so modified, it shall be ineffective and invalid only to the
extent of such prohibition or invalidity without affecting the remaining
provisions of this Agreement, or the validity or effectiveness of such provision
in any other jurisdiction. This Agreement is to be read, construed and applied
together with the Indenture and the other Transaction Documents which, taken
together, set forth the complete understanding and agreement of the Trustee, the
Holders and the Guarantors with respect to the matters referred to herein and
therein.

         11.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.

         11.12 NO INCONSISTENT REQUIREMENTS. Each Guarantor acknowledges that
this Agreement and the other Transaction Documents may contain covenants and
other terms and provisions variously stated regarding the same or similar
matters, and agrees that all such covenants, terms and provisions are cumulative
and all shall be performed and satisfied in accordance with their respective
terms; provided, in the event any terms or conditions contained herein conflict
with any term or condition set forth in the Indenture, such term or condition
set forth in the Indenture shall control.

         11.13 ENTIRE AGREEMENT. This Agreement (i) integrates all the terms and
conditions mentioned herein or incidental hereto, (ii) supersedes all oral
negotiations and prior writings with respect to the subject matter hereof and
(iii) is intended by the parties as the final expression of the Agreement with
respect to the terms and conditions set forth in this Agreement and as the
complete and exclusive statement of the terms agreed to by the parties.

         11.14 FURTHER ASSURANCES. Each Guarantor agrees upon the written
request of the Trustee or any Holder, to execute and deliver to the Trustee or
such Holder, from time to time, any additional instruments or documents
reasonably considered necessary by the Trustee or such Holder to cause this
Agreement to be, become or remain, valid and effective in accordance with its
terms.

         11.15 THE INDENTURE. Anything in this Agreement to the contrary
notwithstanding, Section 5.02 of the Indenture is incorporated by reference
herein, mutatis mutandis.

         11.16 TERMINATION. Upon payment and performance in full of all Secured
Obligations, this Agreement and the security interests granted under this
Agreement shall terminate and the Trustee shall promptly execute and deliver to
the Guarantors such documents and instruments reasonably requested by the
Guarantors as shall be necessary to evidence termination of this Agreement and
of all security interests given by the Guarantors to the Trustee hereunder;
provided, that the obligations of the each Guarantors under Section 11.4 shall
survive such termination.


                                    * * * * *

         Executed and delivered as of the date first above written.

                                       MERCURY FINANCE COMPANY OF ALABAMA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF ARIZONA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF CALIFORNIA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF COLORADO



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF DELAWARE



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF FLORIDA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF GEORGIA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF IDAHO



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF ILLINOIS



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF INDIANA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF IOWA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF KANSAS



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF KENTUCKY



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF LOUISIANA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF MICHIGAN



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF MISSISSIPPI



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF MISSOURI



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF NEVADA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF NEW MEXICO



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF NEW YORK



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF NORTH CAROLINA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF OHIO



                                       By:
                                       Name:
                                       Title:


                                       MFC FINANCE COMPANY OF OKLAHOMA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF OREGON



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF PENNSYLVANIA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF SOUTH CAROLINA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF TENNESSEE



                                       By:
                                       Name:
                                       Title:


                                       MFC FINANCE COMPANY OF TEXAS



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF UTAH



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF VIRGINIA



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF WASHINGTON



                                       By:
                                       Name:
                                       Title:


                                       MERCURY FINANCE COMPANY OF WISCONSIN



                                       By:
                                       Name:
                                       Title:


                                       FILCO MARKETING COMPANY



                                       By:
                                       Name:
                                       Title:


                                       MFC FINANCIAL SERVICES, INC.



                                       By:
                                       Name:
                                       Title:


                                       GULFCO FINANCE COMPANY



                                       By:
                                       Name:
                                       Title:


                                       GULFCO INVESTMENT COMPANY



                                       By:
                                       Name:
                                       Title:


                                       MIDLAND FINANCE COMPANY



                                       By:
                                       Name:
                                       Title:


                                       NORWEST BANK MINNESOTA, NATIONAL
                                       ASSOCIATION, as Trustee



                                       By:
                                       Name:
                                       Title:

<PAGE>

                                     ANNEX I

                                   Guarantors

                       Mercury Finance Company of Alabama
                       Mercury Finance Company of Arizona
                      Mercury Finance Company of California
                       Mercury Finance Company of Colorado
                       Mercury Finance Company of Delaware
                       Mercury Finance Company of Florida
                       Mercury Finance Company of Georgia
                        Mercury Finance Company of Idaho
                       Mercury Finance Company of Illinois
                       Mercury Finance Company of Indiana
                         Mercury Finance Company of Iowa
                        Mercury Finance Company of Kansas
                       Mercury Finance Company of Kentucky
                      Mercury Finance Company of Louisiana
                       Mercury Finance Company of Michigan
                     Mercury Finance Company of Mississippi
                       Mercury Finance Company of Missouri
                        Mercury Finance Company of Nevada
                      Mercury Finance Company of New Mexico
                       Mercury Finance Company of New York
                    Mercury Finance Company of North Carolina
                         Mercury Finance Company of Ohio
                         MFC Finance Company of Oklahoma
                        Mercury Finance Company of Oregon
                     Mercury Finance Company of Pennsylvania
                    Mercury Finance Company of South Carolina
                      Mercury Finance Company of Tennessee
                          MFC Finance Company of Texas
                         Mercury Finance Company of Utah
                       Mercury Finance Company of Virginia
                      Mercury Finance Company of Washington
                      Mercury Finance Company of Wisconsin
                             Filco Marketing Company
                          MFC Financial Services, Inc.
                             Gulfco Finance Company
                            Gulfco Investment Company
                             Midland Finance Company



<PAGE>

                                   SCHEDULE A

                  LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER
                       LOCATIONS, INCLUDING OF COLLATERAL


         a. Chief Executive Office and Principal Place of Business:



         b. Other locations where the Guarantors conduct business or Collateral
is kept:



<PAGE>

                                   SCHEDULE B

               LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT



<PAGE>

                                   SCHEDULE C

 TRADE NAMES AND TRADE STYLES: OTHER CORPORATE, TRADE OR FICTITIOUS NAMES, ETC.




<PAGE>

                                   SCHEDULE D

         INVENTORY STORED WITH WAREHOUSEMEN OR ON LEASED PREMISES, ETC.





<PAGE>

                                   SCHEDULE E

                      PATENTS, COPYRIGHTS, TRADEMARKS, ETC.




<PAGE>

                                   SCHEDULE F

                                DEPOSIT ACCOUNTS


                                                                    Exhibit 4(H)





                            MFN Financial Corporation

                                       and


                  Norwest Bank Minnesota, National Association,


                                     Trustee



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


                                    INDENTURE


                           Dated as of March 23, 1999


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


                            SENIOR SUBORDINATED NOTES





<PAGE>

                               Table of Contents*

                                                                            Page
Recitals 1
ARTICLE I.  Definitions........................................................1
 Section 1.01. Certain Terms Defined...........................................1
  Act..........................................................................1
  Affiliate....................................................................1
  Authenticating Agent.........................................................2
  Board of Directors...........................................................2
  Board Resolution.............................................................2
  Business Day.................................................................2
  Capital Lease................................................................2
  Capital Lease Obligations....................................................2
  Commission...................................................................3
  Common Stock.................................................................3
  Company  3
  Company Request or Company Order.............................................3
  Corporate Trust Office.......................................................3
  Covenant Defeasance..........................................................3
  Default  3
  Defaulted Interest...........................................................3
  Defeasance...................................................................4
  Defeasible Series............................................................4
  Depositary...................................................................4
  Event of Default.............................................................4
  Exchange Act.................................................................4
  GAAP     4
  Global Security..............................................................4
  Holder   4
  Indebtedness.................................................................5
  Indenture....................................................................5
  Interest 5
  Interest Payment Date........................................................5
  Material Adverse Effect......................................................5
  Maturity 6
  Notice of Default............................................................6
  Officer's Certificate........................................................6
  Opinion of Counsel...........................................................6
  Original Issue Discount Security.............................................6
  Outstanding..................................................................6
  Paying Agent.................................................................7
  Person   7
  Place of Payment.............................................................7
  Predecessor Security.........................................................7
  Redemption Date..............................................................8
  Redemption Price.............................................................8
  Regular Record Date..........................................................8
  Responsible Officer..........................................................8
  Securities...................................................................8
  Security Register and Security Registrar.....................................8
  Senior Indebtedness..........................................................8
  Special Record Date..........................................................9
  Stated Maturity..............................................................9
  Subsidiary...................................................................9
  Trust Indenture Act..........................................................9
  Trustee......................................................................9
  U.S. Government Obligation..................................................10
  Vice President..............................................................10
  Working Capital Facility....................................................10
ARTICLE II.  THE SECURITIES...................................................11
 Section 2.01. Designation and Amount of Securities...........................11
 Section 2.02. Form of Securities and Trustee's Certificate of Authentication.12
 Section 2.03. Date and Denominations.........................................13
 Section 2.04. Execution, Authentication, and Delivery of Securities..........14
 Section 2.05. Registration of Transfer and Exchange..........................15
 Section 2.06. Temporary Securities...........................................16
 Section 2.07. Mutilated, Destroyed, Lost, and Stolen Securities..............17
 Section 2.08. Cancellation of Surrendered Securities.........................18
 Section 2.09. Payment of Interest; Interest Rights Preserved.................18
 Section 2.10. Persons Deemed Owners..........................................19
 Section 2.11. Computation of Interest........................................19
 Section 2.12. CUSIP Numbers..................................................20
ARTICLE III.  REDEMPTION OF SECURITIES........................................20
 Section 3.01. Applicability of Article.......................................20
 Section 3.02. Election to Redeem; Notice to Trustee..........................20
 Section 3.03. Deposit of Redemption Price....................................21
 Section 3.04. Securities Payable on Redemption Date..........................21
 Section 3.05. Securities Redeemed in Part....................................22
ARTICLE IV.  SINKING FUNDS....................................................22
 Section 4.01. Applicability of Article.......................................22
 Section 4.02. Satisfaction of Sinking Fund Payments With Securities..........22
 Section 4.03. Redemption of Securities for Sinking Fund......................23
ARTICLE V.  DEFEASANCE AND COVENANT DEFEASANCE................................23
 Section 5.01. Company's Option to Effect Defeasance or Covenant Defeasance...23
 Section 5.02. Defeasance and Discharge.......................................23
 Section 5.03. Covenant Defeasance............................................24
 Section 5.04. Conditions to Defeasance or Covenant Defeasance................24
 Section 5.05. Deposited Money and U.S. Government Obligations to be Held in
               Trust; Other Miscellaneous Provisions..........................26
 Section 5.06. Reinstatement..................................................27
ARTICLE VI.  PARTICULAR COVENANTS OF THE COMPANY..............................27
 Section 6.01. Payment of Principal, Premium, and Interest on Securities......27
 Section 6.02. Maintenance of Office or Agency................................27
 Section 6.03. Money for Securities Payments to be Held in Trust..............28
 Section 6.04. Payment of Taxes and Other Claims..............................29
 Section 6.05. Existence......................................................29
 Section 6.06. Compliance with Laws...........................................29
 Section 6.07. Statement by Officers as to Default............................29
 Section 6.08. Waiver of Certain Covenants....................................30
 Section 6.09. Calculation of Original Issue Discount.........................30
ARTICLE VII.  SECURITIES HOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE
              TRUSTEE.........................................................30
 Section 7.01. Company to Furnish Trustee Names and Addresses of Holders......30
 Section 7.02. Preservation of Information; Communication to Holders..........31
 Section 7.03. Reports by Trustee.............................................31
 Section 7.04. Reports by Company.............................................31
ARTICLE VIII.  DEFAULT........................................................31
 Section 8.01. Event of Default...............................................32
 Section 8.02. Covenant of Company to Pay to Trustee Whole Amount Due on
               Securities on Default in Payment of Interest or Principal;
               Suits for Enforcement by Trustee...............................34
 Section 8.03. Application of Money Collected by Trustee......................35
 Section 8.04. Limitation on Suits by Holders of Securities...................36
 Section 8.05. Rights and Remedies Cumulative; Delay or Omission in Exercise
               of Rights not a Waiver of Event of Default.....................36
 Section 8.06. Rights of Holders of Majority in Principal Amount of
               Outstanding Securities to Direct Trustee.......................37
 Section 8.07. Requirement of an Undertaking to Pay Costs in Certain Suits
               Under the Indenture or Against the Trustee.....................37
 Section 8.08. Notice of Defaults.............................................37
 Section 8.09. Unconditional Right of Holders to Receive Principal, Premium,
               and Interest...................................................38
 Section 8.10. Restoration of Rights and Remedies.............................38
 Section 8.11. Trustee May File Proofs of Claims..............................38
ARTICLE IX  SUBORDINATION OF SECURITIES.......................................39
 Section 9.01 Securities Subordinate to Senior Indebtedness...................39
 Section 9.02 Payment Over of Proceeds Upon Dissolution, etc..................39
 Section 9.03 Prior Payment to Senior Indebtedness Upon Acceleration of
               Securities.....................................................40
 Section 9.04 Payment Limitation..............................................40
 Section 9.05 Payment Permitted...............................................41
 Section 9.06 Certain Limitations.............................................41
 Section 9.07 Subrogation to Rights of Holders of Senior Indebtedness.........41
 Section 9.08 Provisions Solely to Define Relative Rights.....................42
 Section 9.09 Agreement to Effectuate Subordination...........................42
 Section 9.10 No Waiver of Subordination Provisions...........................43
 Section 9.11 Reliance on Judicial Order or Certificate of Liquidating Agent..43
 Section 9.12 Prohibited Payments Held In Trust...............................43
ARTICLE X.  CONCERNING THE TRUSTEE............................................44
 Section 10.01. Certain Duties and Responsibilities...........................44
 Section 10.02. Certain Rights of Trustee.....................................44
 Section 10.03. Not Responsible for Recitals or Issuance of Securities........45
 Section 10.04. May Hold Securities...........................................45
 Section 10.05. Money Held in Trust...........................................45
 Section 10.06. Compensation and Reimbursement................................45
 Section 10.07. Disqualification; Conflicting Interests.......................46
 Section 10.08. Corporate Trustee Required Eligibility........................46
 Section 10.09. Resignation and Removal; Appointment of Successor.............47
 Section 10.10. Acceptance of Appointment by Successor........................48
 Section 10.11. Merger, Conversion, Consolidation, or Succession to Business..49
 Section 10.12. Preferential Collection of Claims Against Company.............49
 Section 10.13. Appointment of Authenticating Agent...........................50
ARTICLE XI.  SUPPLEMENTAL INDENTURES AND CERTAIN ACTIONS......................51
 Section 11.01. Purposes for Which Supplemental Indentures May Be Entered
               Into Without Consent of Holders................................51
 Section 11.02. Modification of Indenture With Consent of Holders of at Least
                a Majority in Principal Amount of Outstanding Securities......52
 Section 11.03. No Amendments to Article IX...................................53
 Section 11.04. Execution of Supplemental Indentures..........................53
 Section 11.05. Effect of Supplemental Indentures.............................54
 Section 11.06. Conformity with Trust Indenture Act...........................54
 Section 11.07. Reference in Securities to Supplemental Indentures............54
ARTICLE XII.  CONSOLIDATION, MERGER, SALE, OR TRANSFER........................54
 Section 12.01. Consolidations and Mergers of Company and Sales Permitted
                Only on Certain Terms.........................................54
ARTICLE XIII.  SATISFACTION AND DISCHARGE OF INDENTURE........................55
 Section 13.01. Satisfaction and Discharge of Indenture.......................55
 Section 13.02. Application of Trust Money....................................55
ARTICLE XIV.  MISCELLANEOUS PROVISIONS........................................56
 Section 14.01. Successors and Assigns of Company Bound by Indenture..........56
 Section 14.02. Service of Required Notice to Trustee and Company.............56
 Section 14.03. Service of Required Notice to Holders; Waiver.................56
 Section 14.04. Indenture and Securities to be Construed in Accordance with
                the Laws of the State of New York.............................57
 Section 14.05. Compliance Certificates and Opinions..........................57
 Section 14.06. Form of Documents Delivered to Trustee........................57
 Section 14.07. Payments Due on Non-Business Days.............................57
 Section 14.08. Provisions Required by Trust Indenture Act to Control.........58
 Section 14.09. Invalidity of Particular Provisions...........................58
 Section 14.10. Indenture May be Executed In Counterparts.....................58
 Section 14.11. Acts of Holders; Record Dates.................................58
 Section 14.12. Effect of Headings and Table of Contents......................60
 Section 14.13. Benefits of Indenture.........................................60



<PAGE>

                  THIS INDENTURE, DATED AS OF MARCH 23, 1999, BETWEEN MFN
FINANCIAL CORPORATION, a corporation duly organized and existing under the laws
of the State of Delaware (the "Company"), and Norwest Bank Minnesota, National
Association, a U.S. national banking association, as Trustee (the "Trustee").

                                    RECITALS

                  A. The Company has duly authorized the execution and delivery
of this Indenture to provide for the issuance from time to time of its senior
subordinated notes (the "Securities"), to be issued in one or more series as in
this Indenture provided.

                  B. All acts and things necessary to make the Securities, when
the Securities have been executed by the Company and authenticated by the
Trustee and delivered as provided in this Indenture, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
indenture and agreement according to its terms, have been done and performed,
and the execution and delivery by the Company of this Indenture and the issue
hereunder of the Securities have in all respects been duly authorized; and the
Company, in the exercise of legal right and power in it vested, is executing and
delivering this Indenture and proposes to make, execute, issue and deliver the
Securities.

                  NOW, THEREFORE, THIS INDENTURE WITNESSETH:

                  In order to declare the terms and conditions upon which the
Securities are authenticated, issued and delivered, and in consideration of the
premises and of the purchase and acceptance of the Securities by the Holders
thereof, it is mutually agreed, for the equal and proportionate benefit of the
respective Holders from time to time of the Securities or of a series thereof,
as follows:

                             ARTICLE I. DEFINITIONS

SECTION 1.01.       CERTAIN TERMS DEFINED

                  (a) The terms defined in this Section 1.01 for all purposes of
this Indenture and of any indenture supplemental hereto (except as herein or
therein otherwise expressly provided or unless the context of this Indenture
otherwise requires) have the respective meanings specified in this Section 1.01.
All other terms used in this Indenture that are defined in the Trust Indenture
Act, either directly or by reference therein (except as herein otherwise
expressly provided or unless the context of this Indenture otherwise requires),
have the respective meanings assigned to such terms in the Trust Indenture Act
as in force at the date of original execution of this Indenture.

Act:

                  The term "Act," when used with respect to any Holder, has the
meaning set forth in Section 14.11.

Affiliate:

                  The term "Affiliate" means, with respect to a particular
Person, any Person that, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, control of a Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative of the foregoing.

Authenticating Agent:

                  The term "Authenticating Agent" means any Person authorized by
the Trustee pursuant to Section 10.13 to act on behalf of the Trustee to
authenticate Securities of one or more series.

Board of Directors:

                  The term "Board of Directors" means the Board of Directors of
the Company or any duly authorized committee of such Board.

Board Resolution:

                  The term "Board Resolution" means a copy of a resolution
delivered to the Trustee and 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.

Business Day:

                  The term "Business Day," when used with respect to any Place
of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are authorized
or required by law or executive order to close.

Capital Lease:

                  The term "Capital Lease" means, with respect to any Person,
any lease of property (whether real, personal, or mixed) by such Person or any
of its Subsidiaries as lessee that would be capitalized on a balance sheet of
such Person or any of its Subsidiaries prepared in conformity with GAAP, other
than, in the case of such Person or any of its Subsidiaries, any such lease
under which such Person or any of its Subsidiaries is the lessor.

Capital Lease Obligations:

                  The term "Capital Lease Obligations" means, with respect to
any Person, the capitalized amount of all obligations of such Person and its
Subsidiaries under Capital Leases, as determined on a consolidated basis in
conformity with GAAP.

Commission:

                  The term "Commission" means the Securities and Exchange
Commission, as from time to time constituted, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

Common Stock:

                  The term "Common Stock" means the common stock of the Company.

Company:

                  The term "Company" means MFN Financial Corporation, a Delaware
corporation, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" will mean such
successor Person.

Company Request or Company Order:

                  The term "Company Request" or "Company Order" means a written
request or order signed in the name of the Company by one of its Responsible
Officers and delivered to the Trustee.

Corporate Trust Office:

                  The term "Corporate Trust Office" means the office of the
Trustee at which at any particular time its corporate trust business is
principally administered, which on the date hereof is Sixth Street and Marquette
Avenue, Minneapolis, Minnesota 55479.

Covenant Defeasance:

                  The term "Covenant Defeasance" has the meaning set forth in
Section 5.03.

Default:

                  The term "Default" means any event which, with notice or
passage of time or both, would constitute an Event of Default.

Defaulted Interest:

                  The term "Defaulted Interest" has the meaning set forth in
Section 2.09.

Defeasance:

                  The term "Defeasance" has the meaning set forth in Section
5.02.

Defeasible Series:

                  The term "Defeasible Series" has the meaning set forth in
Section 5.01.

Depositary:

                  The term "Depositary" means, with respect to Securities of any
series issuable in whole or in part in the form of one or more Global
Securities, a clearing agency registered under the Exchange Act that is
designated to act as Depositary for such Securities in accordance with Section
2.01.

Event of Default:

                  The term "Event of Default" has the meaning set forth in
Section 8.01(a).

Exchange Act:

                  The term "Exchange Act" means the Securities Exchange Act of
1934, as amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, as the same may be in effect from time to time.

GAAP:

                  The term "GAAP" means generally accepted accounting principles
in the United States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and The American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, or in such other statements by any
successor entity as may be in general use by significant segments of the
accounting profession, which are applicable to the circumstances as of the date
of determination.

Global Security:

                  The term "Global Security" means a Security that evidences all
or part of the Securities of any series and is authenticated and delivered to,
and registered in the name of, the Depositary for such Securities or a nominee
thereof.

Holder:

                  The term "Holder" means a person in whose name a particular
Security is registered in the Security Register.

Indebtedness:

                  The term "Indebtedness" means, as applied to any Person,
without duplication, (a) indebtedness for borrowed money, all indebtedness
evidenced by notes, bonds, debentures or other evidences of indebtedness, and
all indebtedness under purchase money mortgages or other purchase money liens or
conditional sales or similar title retention agreements, in each case where such
indebtedness has been created, incurred, assumed or guaranteed by such Person or
where such Person is otherwise liable therefor, and (b) indebtedness for
borrowed money secured by any mortgage, pledge or other lien or encumbrance upon
property owned by such Person even though such Person has not assumed or become
liable for the payment of such indebtedness; provided, however, that
indebtedness of the type referred to in clause (b) above shall be included
within the definition of "Indebtedness" only to the extent of the lesser of: (i)
the amount of the underlying indebtedness referred to in the clause (b) above
and (ii) the aggregate value of the security for such indebtedness.

Indenture:

                  The term "Indenture" means this Indenture, as this Indenture
may be amended, supplemented or otherwise modified from time to time, including,
for all purposes of this Indenture and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" will also include the terms of particular series of Securities
established in accordance with Section 2.01.

Interest:

                  The term "interest," (i) when used with respect to an Original
Issue Discount Security, which by its terms bears interest only after Maturity,
means interest which accrues from and after and is payable after Maturity and
(ii) when used with respect to any Security, means the amount of all interest
accruing on such Security, including any default interest and any interest that
would have accrued after any Event of Default but for the occurrence of such
Event of Default, whether or not a claim for such interest would be otherwise
allowable under applicable law.

Interest Payment Date:

                  The term "Interest Payment Date," when used with respect to
any Security, means the Stated Maturity of an installment of interest on such
Security.

Material Adverse Effect:

                  The term "Material Adverse Effect" means a material adverse
effect on the business, assets, financial condition or results of operations of
the Company (taken together with its Subsidiaries as a whole).

Maturity:

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

Notice of Default:

                  The term "Notice of Default" means a written notice of the
kind set forth in Section 8.01(a)(iv).

Officer's Certificate:

                  The term "Officer's Certificate" means a certificate executed
on behalf of the Company by a Responsible Officer and delivered to the Trustee.

Opinion of Counsel:

                  The term "Opinion of Counsel" means an opinion in writing
signed by legal counsel, who, subject to any express provisions hereof, may be
an employee of or counsel to the Company or any Subsidiary, reasonably
acceptable to the Trustee.

Original Issue Discount Security:

                  The term "Original Issue Discount Security" means any Security
which provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 8.01(b).

Outstanding:

                  The term "Outstanding" means, when used with reference to
Securities as of a particular time, all Securities theretofore issued by the
Company and authenticated and delivered by the Trustee under this Indenture,
except (a) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation, (b) Securities in respect of which (i) notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made, and (ii) money in the amount required
for the redemption thereof has been deposited with the Trustee or any Paying
Agent (other than the Company) in trust for the Holders of such Securities, (c)
Securities paid pursuant to Section 2.07(c), and (d) Securities in exchange for
or in lieu of which other Securities have been authenticated and delivered
pursuant to this Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof satisfactory to it that
such Securities are held by a bona fide purchaser in whose hands such Securities
are valid obligations of the Company; provided, however, that in determining
whether the Holders of the requisite principal amount of the Outstanding
Securities have given any request, demand, authorization, direction, notice,
consent, or waiver hereunder, (x) the principal amount of an Original Issue
Discount Security that will be deemed to be Outstanding will be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon acceleration of the Maturity thereof to such date pursuant to
Section 8.01(b), (y) the principal amount of a Security denominated in one or
more foreign currencies or currency units will be the U.S. dollar equivalent,
determined in the manner contemplated by Section 2.01 on the date of original
issuance of such Security, of the principal amount (or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent on the date of
original issuance of such Security of the amount determined as provided in
clause (i) above) of such Security, and (z) Securities owned by the Company or
any other obligor upon the Securities or any Affiliate of the Company or of such
other obligor will be disregarded and deemed not to be Outstanding, except that,
in determining whether the Trustee will be protected in relying upon any such
request, demand, authorization, direction, notice, consent, or waiver, only
Securities which a Responsible Officer of the Trustee actually knows to be so
owned will be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.

Paying Agent:

                  The term "Paying Agent" means any Person authorized by the
Company to pay the principal of or any premium or interest on any Securities on
behalf of the Company.

Person:
                  The term "Person" means any individual, partnership,
corporation, limited liability company, limited liability partnership, joint
stock company, business trust, trust, unincorporated association, joint venture,
or other entity, or a governmental or political subdivision or agency thereof.

Place of Payment:

                  The term "Place of Payment," when used with respect to the
Securities of any series, means the place or places for the payment of the
principal of and any premium and interest on the Securities of that series
established in accordance with Section 2.01.

Predecessor Security:

                  The term "Predecessor Security," when used with respect to any
particular Security, means every previous Security evidencing all or a portion
of the same debt as that evidenced by such Security; and, for the purposes of
this definition, any Security authenticated and delivered under Section 2.07 in
exchange for or in lieu of a mutilated, destroyed, lost, or stolen Security will
be deemed to evidence the same debt as the mutilated, destroyed, lost, or stolen
Security.

Redemption Date:

                  The term "Redemption Date," when used with respect to any
Security to be redeemed, means the date fixed for such redemption by or pursuant
to this Indenture.

Redemption Price:

                  The term "Redemption Price," when used with respect to any
Security to be redeemed, means the price (including premium, if any) at which it
is to be redeemed pursuant to this Indenture.

Regular Record Date:

                  The term "Regular Record Date" for the interest payable on any
Interest Payment Date on the Securities of any series means the date established
for that purpose in accordance with Section 2.01.

Responsible Officer:

                  The term "Responsible Officer," when used (a) with respect to
the Company, means the Chief Executive Officer, the President, the Chief
Financial Officer or the Secretary of the Company and (b) with respect to the
Trustee, means any Vice President, any Assistant Vice President, any Assistant
Secretary, any Assistant Treasurer, any trust officer or assistant trust
officer, or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
are such officers, respectively, or to whom any corporate trust matter is
referred because of his knowledge of and familiarity with the particular
subject.

Securities:

                  The term "Securities" has the meaning set forth in the first
recital of this Indenture and more particularly means any Securities
authenticated and delivered under this Indenture.

Security Register and Security Registrar:

                  The terms "Security Register" and "Security Registrar" have
the respective meanings set forth in Section 2.05.

Senior Indebtedness:

                  The term "Senior Debt" means (a) the Company's 10% Senior
Secured Notes, Series A issued under the Indenture dated as of March 23, 1999
(the "Senior Secured Notes Indenture") between the Company and the trustee
thereunder, (b) the Company's Senior Secured Notes, Series B issued under the
Senior Secured Notes Indenture, (c) any senior secured notes issued in the
future under the Senior Secured Notes Indenture, (d) Indebtedness with respect
to any Working Capital Facility and (e) any other Indebtedness which is not
expressed to be subordinate or junior in right of payment to any other
Indebtedness.

Special Record Date:

                  The term "Special Record Date" for the payment of any
Defaulted Interest means a date fixed by the Trustee pursuant to Section 2.09.

Stated Maturity:

                  The term "Stated Maturity," when used with respect to any
Security, any installment of interest thereon, or any other amount payable under
this Indenture or the Securities, means the date specified in this Indenture or
such Security as the regularly scheduled date on which the principal of such
Security, such installment of interest, or such other amount, is due and
payable.

Subsidiary:

                  The term "Subsidiary" means, as applied with respect to any
Person, any corporation, partnership, or other business entity of which, in the
case of a corporation, more than 50% of the issued and outstanding capital stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation has or might have voting power upon the
occurrence of any contingency), or, in the case of any partnership or other
legal entity, more than 50% of the ordinary equity capital interests, is at the
time directly or indirectly owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries, or by one or more of such Person's
other Subsidiaries. Unless the context of this Indenture or any indenture
supplemental hereto otherwise expressly requires, the term "Subsidiary" shall
refer to a Subsidiary of the Company.

Trust Indenture Act:

                  The term "Trust Indenture Act" means the Trust Indenture Act
of 1939, as amended, as in force at the date as of which this instrument was
executed, together with all the rules and regulations of the Commission
promulgated pursuant thereto; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means,
to the extent required by any such amendment, the Trust Indenture Act of 1939,
as so amended.

Trustee:

                  The term "Trustee" means the Person named as the "Trustee" in
the first paragraph of this Indenture until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture and,
thereafter, "Trustee" will mean or include each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, "Trustee" as
used with respect to the Securities of any series will mean each Trustee with
respect to Securities of that series.

U.S. Government Obligation:

                  The term "U.S. Government Obligation" means (a) any security
that is (i) a direct obligation of the United States of America for the payment
of which the full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of which
is unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof and (b) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933,
as amended) as custodian with respect to any U.S. Government Obligation
specified in clause (a), which U.S. Government Obligation is held by such
custodian for the account of the holder of such depositary receipt, or with
respect to any specific payment of principal of or interest on any such U.S.
Government Obligation, provided that (except as required by law) such custodian
is not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of principal or interest
evidenced by such depositary receipt. Vice President:

                  The term "Vice President," when used with respect to the
Company or the Trustee, means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president."

Working Capital Facility:

                  The term "Working Capital Facility" means one or more funding
arrangements in an aggregate principal amount not to exceed at any one time $40
million with a financial institution or other lender or purchaser to finance or
refinance the purchase or origination of Receivables by the Company or any
Subsidiary or to otherwise provide funding for the general working capital needs
of the Company and its Subsidiaries in each case in the ordinary course of the
Finance Business.

                  (b) The words "Article" and "Section" refer to an Article and
Section, respectively, of this Indenture. 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. Certain terms
used principally in Articles V, VI, and IX are defined in those Articles. Terms
in the singular include the plural and terms in the plural include the singular.

                           ARTICLE II. THE SECURITIES

SECTION 2.01.       DESIGNATION AND AMOUNT OF SECURITIES

                  (a) The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited.

                  (b) The Securities may be issued in one or more series. There
will be established in or pursuant to a Board Resolution and, subject to Section
2.04, set forth or determined in the manner provided in an Officer's
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series: (i) the title of the Securities of
the series (which will distinguish the Securities of the series from Securities
of any other series); (ii) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in the exchange for, or in lieu of, other Securities of the
series pursuant to Section 2.05, 2.06, 2.07, 3.05, or 11.07 and except for any
Securities which, pursuant to Section 2.04, are deemed never to have been
authenticated and delivered hereunder); (iii) the Person to whom any interest on
a Security of the series will be payable, if other than the Person in whose name
that Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest; (iv) the date or dates
on which the principal of the Securities of the series is payable; (v) the rate
or rates at which the Securities of the series will bear interest, if any, the
date or dates from which such interest will accrue, the Interest Payment Dates
on which any such interest will be payable, and the Regular Record Date for any
interest payable on any Interest Payment Date; (vi) the place or places where
the principal of and any premium and interest on Securities of the series will
be payable; (vii) the period or periods within which, the price or prices at
which, and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company; (viii) the
obligation, if any, of the Company to redeem or purchase Securities of the
series pursuant to any sinking fund or analogous provisions or at the option of
a Holder thereof and the period or periods within which, the price or prices at
which, and the terms and conditions upon which Securities of the series will be
redeemed or purchased, in whole or in part, pursuant to such obligation; (ix) if
other than denominations of $1,000 and integral multiples thereof, the
denominations in which Securities of the series will be issuable; (x) the
currency, currencies, or currency units in which payment of the principal of and
any premium and interest on any Securities of the series will be payable if
other than the currency of the United States of America and the manner of
determining the equivalent thereof in the currency of the United States of
America for purposes of the definition of "Outstanding" in Section 1.01; (xi) if
the amount of payments of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index, based
upon a formula, or in some other manner, the manner in which such amounts will
be determined; (xii) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the Company or a
Holder thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency,
currencies, or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which such election is
made will be payable, and the periods within which and the terms and conditions
upon which such election is to be made; (xiii) if other than the principal
amount thereof, the portion of the principal amount of Securities of the series
which will be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 8.01(b); (xiv) if applicable, that the Securities of the
series will be subject to either or both of Defeasance or Covenant Defeasance as
provided in Article V, provided that no series of Securities that is convertible
into Common Stock pursuant to Section 2.01(b)(xvi) or convertible into or
exchangeable for any other securities pursuant to Section 2.01(b)(xvii) will be
subject to Defeasance pursuant to Section 5.02; (xv) if and as applicable, that
the Securities of the series will be issuable in whole or in part in the form of
one or more Global Securities and, in such case, the Depositary or Depositaries
for such Global Security or Global Securities and any circumstances other than
those set forth in Section 2.05 in which any such Global Security may be
transferred to, and registered and exchanged for Securities registered in the
name of, a Person other than the Depositary for such Global Security or a
nominee thereof and in which any such transfer may be registered; (xvi) the
terms and conditions, if any, pursuant to which the Securities are convertible
into Common Stock; (xvii) the terms and conditions, if any, pursuant to which
the Securities are convertible into or exchangeable for any other securities,
including (without limitation) securities of Persons other than the Company; and
(xviii) any other terms of, or provisions, covenants, rights or other matters
applicable to, the series (which terms, provisions, covenants, rights or other
matters will not be inconsistent with the provisions of this Indenture, except
as permitted by Section 11.01(d)).

                  (c) All Securities of any one series will be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to below and (subject to Section
2.04) set forth or determined in the manner provided in the Officer's
Certificate referred to above or in any such indenture supplemental hereto.

                  (d) If any of the terms of the series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action will be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee concurrently with or prior to the delivery
of the Officer's Certificate setting forth the terms of the series.

SECTION 2.02.     FORM OF SECURITIES AND TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  (a) The Securities of each series will be in such form as may
be established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, and may have such letters, numbers, or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If the form of Securities of
any series is established by action taken pursuant to a Board Resolution, a copy
of an appropriate record of such action will be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee concurrently
with or prior to the delivery of the Company Order contemplated by Section 2.04
for the authentication and delivery of such Securities.

                  (b) The definitive Securities will be printed, lithographed,
or engraved on steel engraved borders or may be produced in any other manner
permitted by the rules of any securities exchange on which the Securities may be
listed, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.

                  (c) The Trustee's certificate of authentication will be in
substantially the following form:

        [Form of Trustee's Certificate of Authentication for Securities]

                     Trustee's Certificate of Authentication

                  This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.




                                                                    ,
                                                 as Trustee


                                     By:
                                            Authorized Signatory

                  (d) Every Global Security authenticated and delivered
hereunder will bear a legend in substantially the following form:

                     [Form of Legend for Global Securities]

                  This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than the
Depositary or a nominee thereof, and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, this Security will be a Global Security subject to the
foregoing, except in such limited circumstances.

SECTION 2.03.       DATE AND DENOMINATIONS

                  Each Security will be dated the date of its authentication.
The Securities of each series will be issuable only in registered form without
coupons in such denominations as may be specified in accordance with Section
2.01. In the absence of any such specified denomination with respect to the
Securities of any series, the Securities of such series will be issuable in
denominations of $1,000 and integral multiples thereof.

SECTION 2.04.       EXECUTION, AUTHENTICATION, AND DELIVERY OF SECURITIES

                  (a) The Securities will be executed on behalf of the Company
by the Chief Executive Officer or the President of the Company and attested by
the Treasurer or the Secretary of the Company under its corporate seal. The
signature of any of these officers on the Securities may be manual or facsimile.
The seal of the Company may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted, or otherwise reproduced on the Securities.

                  (b) Only such Securities bearing the Trustee's certificate of
authentication, signed manually by the Trustee, will be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. Such execution of
the certificate of authentication by the Trustee upon any Securities executed by
the Company will be conclusive evidence that the Securities so authenticated
have been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 2.08, for all
purposes of this Indenture such Security will be deemed never to have been
authenticated and delivered hereunder and will never be entitled to the benefits
of this Indenture.

                  (c) Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company will bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.

                  (d) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order will authenticate and make such
Securities available for delivery. If the form or terms of the Securities of the
series have been established in or pursuant to one or more Board Resolutions as
permitted by Sections 2.01 and 2.02, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee will be entitled to receive, and (subject to
Section 10.01) will be fully protected in relying upon, an Opinion of Counsel
stating (i) if the form of such Securities has been established by or pursuant
to a Board Resolution as permitted by Section 2.02, that such form has been
established in conformity with the provisions of this Indenture, (ii) if the
terms of such Securities have been established by or pursuant to a Board
Resolution as permitted by Section 2.01, that such terms have been established
in conformity with the provisions of this Indenture, and (iii) that such
Securities, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and binding obligations of the Company
enforceable in accordance with their terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium, or other
laws of general applicability relating to or affecting creditors' rights and by
general principles of equity.

                  (e) Notwithstanding the provisions of Sections 2.01 and
2.04(d), if all Securities of a series are not to be originally issued at one
time, it will not be necessary to deliver the Officer's Certificate otherwise
required pursuant to Section 2.01 or the Company Order and Opinion of Counsel
otherwise required pursuant to Section 2.04(d) at or prior to the time of
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.

SECTION 2.05.       REGISTRATION OF TRANSFER AND EXCHANGE

                  (a) The Company will cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company will provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

                  (b) Upon surrender for registration of transfer of any
Security of any series at the office or agency in a Place of Payment for that
series, the Company will execute, and the Trustee will authenticate and make
available for delivery, in the name of the designated transferee or transferees,
one or more new Securities of the same series, of any authorized denominations
and of a like aggregate principal amount and tenor.

                  (c) At the option of the Holder, Securities of any series may
be exchanged for other Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company will execute, and the
Trustee will authenticate and make available for delivery, the Securities which
the Holder making the exchange is entitled to receive.

                  (d) Every Security presented or surrendered for registration
of transfer or exchange will (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument or instruments of
transfer, in form reasonably satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing. No service charge will be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 2.06, 3.05, or 11.06 not involving any transfer.
The Company will not be required (i) to issue, register the transfer of, or
exchange Securities of any series during a period beginning at the opening of
business 15 calendar days before the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 3.02(c) and
ending at the close of business on the day of such mailing or (ii) to register
the transfer of or exchange any Security so selected for redemption in whole or
in part, except, in the case of any Securities to be redeemed in part, the
portion thereof not being redeemed.

                  (e) All Securities issued upon any registration of transfer or
exchange of Securities will be valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.

                  (f) Notwithstanding any other provision in this Indenture, no
Global Security may be transferred to, or registered or exchanged for Securities
registered in the name of, any Person other than the Depositary for such Global
Security or any nominee thereof, and no such transfer may be registered, unless
(i) such Depositary (A) notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or (B) ceases to be a clearing
agency registered under the Exchange Act, (ii) the Company executes and delivers
to the Trustee a Company Order that such Global Security shall be so
transferable, registrable, and exchangeable, and such transfers shall be
registrable, (iii) there shall have occurred and be continuing an Event of
Default with respect to the Securities evidenced by such Global Security or (iv)
there shall exist such other circumstances, if any, as have been specified for
this purpose in accordance with Section 2.01. Notwithstanding any other
provision in this Indenture, a Global Security to which the restriction set
forth in the preceding sentence shall have ceased to apply may be transferred
only to, and may be registered and exchanged for Securities registered only in
the name or names of, such Person or Persons as the Depositary for such Global
Security shall have directed and no transfer thereof other than such a transfer
may be registered. Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security to which the
restriction set forth in the first sentence of this Section 2.05(f) shall apply,
whether pursuant to this Section 2.05, Section 2.06, 2.07, 3.05, or 11.06 or
otherwise, will be authenticated and delivered in the form of, and will be, a
Global Security.

SECTION 2.06.       TEMPORARY SECURITIES

                  Pending the preparation of definitive Securities of any
series, the Company may execute and register and upon Company Order the Trustee
will authenticate and make available for delivery temporary Securities (printed,
lithographed, or typewritten), of any authorized denomination, and substantially
in the form of the definitive Securities but with such omissions, insertions,
and variations as may be appropriate for temporary Securities, all as may be
determined by the officers executing such Securities as evidenced by their
execution of such Securities; provided, however, that the Company will use
reasonable efforts to have definitive Securities of that series available at the
times of any issuance of Securities under this Indenture. Every temporary
Security will be executed and registered by the Company and be authenticated by
the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Securities. The Company will execute and
register and furnish definitive Securities of such series as soon as practicable
and thereupon any or all temporary Securities of such series may be surrendered
in exchange therefor at the office or agency of the Company in the Place of
Payment for that series, and the Trustee will authenticate and make available
for delivery in exchange for such temporary Securities of such series one or
more definitive Securities of the same series, of any authorized denominations,
and of a like aggregate principal amount and tenor. Such exchange will be made
by the Company at its own expense and without any charge to the Holder therefor.
Until so exchanged, the temporary Securities of any series will be entitled to
the same benefits under this Indenture as definitive Securities of the same
series authenticated and delivered hereunder.

SECTION 2.07.       MUTILATED, DESTROYED, LOST, AND STOLEN SECURITIES

                  (a) If any mutilated Security is surrendered to the Trustee,
the Company will execute and the Trustee will authenticate and make available
for delivery in exchange therefor a new Security of the same series and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.

                  (b) If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss, or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company will execute and the Trustee will authenticate
and make available for delivery, in lieu of any such destroyed, lost, or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

                  (c) In case any such mutilated, destroyed, lost, or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security.

                  (d) Upon the issuance of any new Security under this Section
2.07, 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 (including the fees and expenses of the Trustee) connected
therewith.

                  (e) Every new Security of any series issued pursuant to this
Section 2.07 in exchange for any mutilated Security or in lieu of any destroyed,
lost, or stolen Security will constitute an original additional contractual
obligation of the Company, whether or not the mutilated, destroyed, lost, or
stolen Security shall be at any time enforceable by anyone, and will be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Securities of that series duly issued hereunder.

                  (f) The provisions of this Section 2.07 are exclusive and will
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost, or stolen Securities.

SECTION 2.08.       CANCELLATION OF SURRENDERED SECURITIES

                  All Securities surrendered for payment, redemption,
registration of transfer or exchange, or for credit against any sinking fund
payment will, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and will be promptly canceled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered will be promptly canceled by the Trustee. No Securities will be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section 2.08, except as expressly permitted by this Indenture. All
canceled Securities held by the Trustee will be disposed of as directed by a
Company Order, provided, however, that the Trustee will not be required to
destroy canceled Securities except in accordance with its established policies.

SECTION 2.09.       PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED

                  (a) Except as otherwise provided in accordance with Section
2.01 with respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date will be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest.

                  (b) Any interest on any Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") will forthwith cease to be
payable to the Holder on the relevant regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company
together with interest thereon (to the extent permitted by law) at the rate of
interest applicable to such Security, at its election in each case, as provided
in clause (i) or (ii) below:

                           (i) The Company may elect to make payment of any
         Defaulted Interest (and interest thereon, if any) to the Persons in
         whose names the Securities of such series (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
         will be fixed in the following manner. The Company will notify the
         Trustee in writing of the amount of Defaulted Interest (and interest
         thereon, if any) proposed to be paid on each Security of such series
         and the date of the proposed payment, and at the same time the Company
         will deposit with the Trustee an amount of money equal to the aggregate
         amount proposed to be paid in respect of such Defaulted Interest (and
         interest thereon, if any) or will 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 (and interest thereon, if
         any) as in this clause (i) provided. Thereupon the Trustee will fix a
         Special Record Date for the payment of such Defaulted Interest (and
         interest thereon, if any) which will be not more than 15 calendar days
         and not less than 10 calendar days prior to the date of the proposed
         payment and not less than 10 calendar days after the receipt by the
         Trustee of the notice of the proposed payment. The Trustee will
         promptly notify the Company of such Special Record Date and, in the
         name and at the expense of the Company, will 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 Holder of
         Securities of such series at such Holder's address as it appears in the
         Security Register, not less than 10 calendar days prior to such Special
         Record Date. Notice of the proposed payment of such Defaulted Interest
         (and interest thereon, if any) and the Special Record Date therefor
         having been so mailed, such Defaulted Interest will be paid to the
         Persons in whose names the Securities of such series (or their
         respective Predecessor Securities) are registered at the close of
         business on such Special Record Date and will no longer be payable
         pursuant to the following clause (ii).

                           (ii) The Company may make payment of any Defaulted
         Interest (and interest thereon, if any) on the Securities of any series
         in any other lawful manner not inconsistent with the requirements of
         any securities exchange on which such Securities may be listed, and
         upon such notice as may be required by such exchange, if, after notice
         given by the Company to the Trustee of the proposed payment pursuant to
         this clause (ii), such manner of payment shall be deemed practicable by
         the Trustee.

                  (c) Subject to the foregoing provisions of this Section 2.09,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security will carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.

SECTION 2.10.       PERSONS DEEMED OWNERS

                  Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee, and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 2.09) any interest on such Security and for all
other purposes whatsoever, whether or not such Security shall be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
will be affected by notice to the contrary.

SECTION 2.11.       COMPUTATION OF INTEREST

                  Except as otherwise specified in accordance with Section 2.01
for Securities of any series, interest on the Securities of each series will be
computed on the basis of a 360-day year consisting of 12 30-day months.

SECTION 2.12.       CUSIP NUMBERS

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


                      ARTICLE III. REDEMPTION OF SECURITIES

SECTION 3.01.       APPLICABILITY OF ARTICLE

                  Securities of any series which are redeemable before their
Stated Maturity will be redeemable in accordance with their terms and (except as
otherwise specified in accordance with Section 2.01 for Securities of any
series) in accordance with this Article III.

SECTION 3.02.       ELECTION TO REDEEM; NOTICE TO TRUSTEE

                  (a) The election of the Company to redeem any Securities will
be evidenced by a Board Resolution. In case of any redemption at the election of
the Company, the Company will, at least 60 calendar days prior to the Redemption
Date fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company will furnish the Trustee with an Officer's Certificate evidencing
compliance with such restriction.

                  (b) Notice of redemption of Securities to be redeemed at the
election of the Company will be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company and will
be irrevocable. Notice of redemption will be given by mail, first-class postage
prepaid, not less than 30 or more than 60 calendar days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register. All notices of redemption will identify the Securities to
be redeemed (including the CUSIP numbers thereof, if applicable) and will state
(i) the Redemption Date, (ii) the Redemption Price, (iii) if less than all the
Outstanding Securities of any series are to be redeemed, the identification
(and, in the case of partial redemption of any Securities, the principal
amounts) of the particular Securities to be redeemed, (iv) that on the
Redemption Date the Redemption Price will become due and payable upon each such
Security to be redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date, (v) the place or places where such Securities are
to be surrendered for payment of the Redemption Price, (vi) that the redemption
is for a sinking fund, if such is the case, and (vii) the specific provision of
this Indenture pursuant to which such Securities are to be redeemed.

                  (c) If less than all the Securities of any series are to be
redeemed, the particular Securities to be redeemed will be selected not more
than 60 calendar days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption, by
such method as the Trustee may deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. The Trustee
will promptly notify the Company in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.

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

SECTION 3.03.       DEPOSIT OF REDEMPTION PRICE

                  At or prior to 10:00 a.m., New York City time, on any
Redemption Date, the Company will deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 6.03) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) any accrued interest on, all of the Securities that are to be
redeemed on that date.

SECTION 3.04.       SECURITIES PAYABLE ON REDEMPTION DATE

                  (a) Notice of redemption having been given as aforesaid, the
Securities so to be redeemed will, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company defaults in the payment of the Redemption Price and accrued
interest) such Securities will cease to accrue interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security will
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified in
accordance with Section 2.01, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates in accordance with their terms
and the provisions of Section 2.09.

                  (b) If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium will, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.

SECTION 3.05.       SECURITIES REDEEMED IN PART

                  Any Security that is to be redeemed only in part will be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company will execute, and
the Trustee will authenticate and make available for delivery to the Holder of
such Security without service charge, a new Security or Securities of the same
series and of like tenor, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.

                            ARTICLE IV. SINKING FUNDS

SECTION 4.01.       APPLICABILITY OF ARTICLE

                  The provisions of this Article IV will be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified in accordance with Section 2.01 for Securities of such series. The
minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
amount of any sinking fund payment may be subject to reduction as provided in
Section 4.02. Each sinking fund payment with respect to Securities of a
particular series will be applied to the redemption of Securities of such series
as provided for by the terms of Securities of such series.

SECTION 4.02.       SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES

                  The Company (a) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (b) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series, provided that such Securities have not been previously so credited. Such
Securities will be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment will be reduced
accordingly.

SECTION 4.03.       REDEMPTION OF SECURITIES FOR SINKING FUND

                  Not less than 60 calendar days prior to each sinking fund
payment date for any series of Securities, the Company will deliver to the
Trustee an Officer's Certificate specifying the amount of the next ensuing
sinking fund payment for that series pursuant to the terms of that series, the
portion thereof, if any, that is to be satisfied by payment of cash and the
portion thereof, if any, that is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 4.02 and will also deliver to the
Trustee any Securities to be so delivered. Not less than 30 calendar days before
each such sinking fund payment date, the Trustee will select the Securities to
be redeemed upon such sinking fund payment date in the manner specified in
Section 3.02(c) and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner provided in Section
3.02(b). Such notice having been duly given, the redemption of such Securities
will be made upon the terms and in the manner stated in Sections 3.04 and 3.05.

                  ARTICLE V. DEFEASANCE AND COVENANT DEFEASANCE

SECTION 5.01.       COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE

                  The Company may elect, at its option by Board Resolution at
any time, to have either Section 5.02 or Section 5.03 applied to the Outstanding
Securities of any series designated pursuant to Section 2.01 as being defeasible
pursuant to this Article V (hereinafter called "Defeasible Series"), upon
compliance with the conditions set forth below in this Article V, provided that
Section 5.02 will not apply to any series of Securities that is convertible into
Common Stock pursuant to Section 2.01(b)(xvi) or convertible into or
exchangeable for any other securities pursuant to Section 2.01(b)(xvii).

SECTION 5.02.       DEFEASANCE AND DISCHARGE

                  Upon the Company's exercise of the option provided in Section
5.01 to have this Section 5.02 applied to the Outstanding Securities of any
Defeasible Series and subject to the proviso to Section 5.01, the Company will
be deemed to have been discharged from its obligations with respect to the
Outstanding Securities of such series as provided in this Section 5.02 on and
after the date the conditions set forth in Section 5.04 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means that
the Company will be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Securities of such series and to have satisfied
all its other obligations under the Securities of such series and this Indenture
insofar as the Securities of such series are concerned (and the Trustee, at the
expense of the Company, will execute proper instruments acknowledging the same),
subject to the following which will survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of Securities of such series to
receive, solely from the trust fund described in Section 5.04 and as more fully
set forth in Section 5.04, payments in respect of the principal of and any
premium and interest on such Securities of such series when payments are due,
(b) the Company's obligations with respect to the Securities of such series
under Sections 2.05, 2.06, 2.07, 6.02, 6.03, and 11.06, (c) the rights, powers,
trusts, duties, and immunities of the Trustee hereunder, and (d) this Article V.
Subject to compliance with this Article V, the Company may exercise its option
provided in Section 5.01 to have this Section 5.02 applied to the Outstanding
Securities of any Defeasible Series notwithstanding the prior exercise of its
option provided in Section 5.01 to have Section 5.03 applied to the Outstanding
Securities of such series.

SECTION 5.03.       COVENANT DEFEASANCE

                  Upon the Company's exercise of the option provided in Section
5.01 to have this Section 5.03 applied to the Outstanding Securities of any
Defeasible Series, (a) the Company will be released from its obligations under
Sections 6.04 through 6.07, inclusive, Section 12.01, and such provisions of any
Supplemental Indenture as may be specified in such Supplemental Indenture, and
(b) the occurrence of any event specified in Sections 8.01(a)(iii), 8.01(a)(iv)
(with respect to any of Sections 6.04 through 6.07, inclusive, Section 12.01,
and such provisions of any Supplemental Indenture as may be specified in such
Supplemental Indenture), 8.01(a)(v), 8.01(a)(vi), and 8.01(a)(ix) will be deemed
not to be or result in an Event of Default, in each case with respect to the
Outstanding Securities of such series as provided in this Section on and after
the date the conditions set forth in Section 5.04 are satisfied (hereinafter
called "Covenant Defeasance"). For this purpose, such Covenant Defeasance means
that the Company may omit to comply with and will have no liability in respect
of any term, condition, or limitation set forth in any such specified Section or
provision (to the extent so specified in the case of Section 8.01(a)(iv)),
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or provision or by reason of any reference in any such Section
or provision to any other provision herein or in any other document, but the
remainder of this Indenture and the Securities of such series will be unaffected
thereby.

SECTION 5.04.       CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE

                  The following will be the conditions to application of either
Section 5.02 or Section 5.03 to the Outstanding Securities of any Defeasible
Series:

                  (a) The Company shall irrevocably have deposited or caused to
         be deposited with the Trustee (or another trustee that satisfies the
         requirements contemplated by Section 10.08 and agrees to comply with
         the provisions of this Article V applicable to it) as trust funds in
         trust for the benefit of the Holders of Outstanding Securities of such
         series (i) money in an amount, or (ii) U.S. Government Obligations that
         through the scheduled payment of principal and interest in respect
         thereof in accordance with their terms will provide, without
         reinvestment, not later than one day before the due date of any
         payment, money in an amount, or (iii) a combination thereof, in each
         case sufficient to pay and discharge, and which will be applied by the
         Trustee (or any such other qualifying trustee) to pay and discharge,
         the principal of and any premium and interest on the Securities of such
         series on the respective Stated Maturities or on any earlier date or
         dates on which the Securities of such series shall be subject to
         redemption and the Company shall have given the Trustee irrevocable
         instructions satisfactory to the Trustee to give notice to the Holders
         of the redemption of the Securities of such series, all in accordance
         with the terms of this Indenture and the Securities of such series.

                  (b) In the case of an election under Section 5.02, the Company
         shall have delivered to the Trustee an Opinion of Counsel (from a
         counsel who shall not be an employee of the Company) to the effect that
         (i) the Company has received from, or there has been published by, the
         Internal Revenue Service a ruling, or (ii) since the date of this
         Indenture there has been a change in the applicable federal income tax
         law, in either case to the effect that, and based thereon such opinion
         shall confirm that, the Holders of the Outstanding Securities of such
         series will not recognize gain or loss for federal income tax purposes
         as a result of the deposit, Defeasance, and discharge to be effected
         with respect to the Securities of such series and will be subject to
         federal income tax on the same amount, in the same manner, and at the
         same times as would be the case if such deposit, Defeasance, and
         discharge were not to occur.

                  (c) In the case of an election under Section 5.03, the Company
         shall have delivered to the Trustee an Opinion of Counsel (from a
         counsel who shall not be an employee of the Company) to the effect that
         the Holders of the Outstanding Securities of such series will not
         recognize gain or loss for federal income tax purposes as a result of
         the deposit and Covenant Defeasance to be effected with respect to the
         Securities of such series and will be subject to federal income tax on
         the same amount, in the same manner, and at the same times as would be
         the case if such deposit and Covenant Defeasance were not to occur.

                  (d) The Company shall have delivered to the Trustee an Opinion
         of Counsel (from a counsel who shall not be an employee of the Company)
         stating that the defeasance trust does not violate the Investment
         Company Act of 1940.

                  (e) The Company shall have delivered to the Trustee the
         opinion of a nationally recognized independent public accounting firm
         certifying the sufficiency of the amount of the moneys, U.S. Government
         Obligations, or a combination thereof, placed on deposit to pay,
         without regard to any reinvestment, the principal of and any premium
         and interest on the Securities on the Stated Maturity thereof or on any
         earlier date on which the Securities shall be subject to redemption as
         to which the Company has given irrevocable instructions satisfactory to
         the Trustee to give notice to the Holders of the redemption of the
         Securities of such series, all in accordance with the terms of this
         Indenture and the Securities of such series.

                  (f) The Company shall have delivered to the Trustee an
         Officer's Certificate (i) stating that the deposit was not made by the
         Company with the intent of preferring the holders of the Securities
         over the other creditors of the Company or with the intent of
         defeating, hindering, delaying or defrauding creditors of the Company
         or others, and (ii) to the effect that the Securities of such series,
         if then listed on any securities exchange, will not be delisted solely
         as a result of such deposit.

                  (g) No Default or Event of Default shall have occurred and be
         continuing at the time of such deposit or, with regard to any Event of
         Default or any such event specified in Sections 8.01(a)(vii) and
         (viii), at any time on or prior to the 124th calendar day after the
         date of such deposit (it being understood that this condition will not
         be deemed satisfied until after such 124th calendar day).

                  (h) Such Defeasance or Covenant Defeasance will not cause the
         Trustee to have a conflicting interest within the meaning of the Trust
         Indenture Act (assuming all Securities are in default within the
         meaning of such Act).

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

                  (j) The Company shall have delivered to the Trustee an
         Officer's Certificate and an Opinion of Counsel, each stating that all
         conditions precedent with respect to such Defeasance or Covenant
         Defeasance have been complied with.

SECTION 5.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
              TRUST; OTHER MISCELLANEOUS PROVISIONS

                  (a) Subject to the provisions of Section 6.03(e), all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section
5.05 and Section 5.06, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 5.04 in respect of the
Securities of any Defeasible Series will be held in trust and applied by the
Trustee, in accordance with the provisions of the Securities of such series and
this Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of Securities of such series, of all sums due and to
become due thereon in respect of principal and any premium and interest, but
money so held in trust need not be segregated from other funds except to the
extent required by law.

                  (b) The Company will pay and indemnify the Trustee against any
tax, fee, or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 5.04 or the principal and interest
received in respect thereof other than any such tax, fee, or other charge that
by law is for the account of the Holders of Outstanding Securities.

                  (c) Notwithstanding anything in this Article V to the
contrary, the Trustee will deliver or pay to the Company from time to time upon
a Company Request any money or U.S. Government Obligations held by it as
provided in Section 5.04 with respect to Securities of any Defeasible Series
that are in excess (in the opinion of the nationally recognized independent
public accounting firm rendering an opinion pursuant to Section 5.04(e)) of the
amount thereof that would then be required to be deposited to effect an
equivalent Defeasance or Covenant Defeasance with respect to the Securities of
such series.

SECTION 5.06.       REINSTATEMENT

                  If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article V with respect to the Securities of any
series by reason of any order or judgment of any court or governmental authority
enjoining, restraining, or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Securities of such series
will be revived and reinstated as though no deposit had occurred pursuant to
this Article V with respect to Securities of such series until such time as the
Trustee or Paying Agent is permitted to apply all money held in trust pursuant
to Section 5.05 with respect to Securities of such series in accordance with
this Article V; provided, however, that if the Company makes any payment of
principal of or any premium or interest on any Security of such series following
the reinstatement of its obligations, the Company will be subrogated to the
rights of the Holders of Securities of such series to receive such payment from
the money so held in trust.

                 ARTICLE VI. PARTICULAR COVENANTS OF THE COMPANY

SECTION 6.01.       PAYMENT OF PRINCIPAL, PREMIUM, AND INTEREST ON SECURITIES

                  The Company, for the benefit of each series of Securities,
will duly and punctually pay the principal of and any premium and interest on
the Securities of that series in accordance with the terms of the Securities and
this Indenture.

SECTION 6.02.       MAINTENANCE OF OFFICE OR AGENCY

                  (a) The Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices, and demands may be made or served at
the Corporate Trust Office, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands.

                  (b) The Company may also from time to time designate one or
more other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission will in any manner relieve the Company of its obligation to maintain
an office or agency in each Place of Payment for Securities of any series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.

SECTION 6.03.       MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST

                  (a) If the Company shall at any time act as its own Paying
Agent with respect to any series of Securities, it will, on or before each due
date of the principal of or any premium or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its action or
failure so to act.

                  (b) Whenever the Company shall have one or more Paying Agents
for any series of Securities, it will, prior to each due date of the principal
of or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.

                  (c) The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent will agree with the Trustee, subject to
the provisions of this Section 6.03, that such Paying Agent will (i) comply with
the provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(ii) during the continuance of any default by the Company (or any other obligor
upon the Securities of that series) in the making of any payment in respect of
the Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.

                  (d) The Company may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent will be released from all further liability with
respect to such money.

                  (e) Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the principal of or any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium, or interest has become due and payable
will be paid to the Company upon a Company Request (or, if then held by the
Company, will be discharged from such trust); and the Holder of such Security
will thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, will thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which will not
be less than 30 calendar days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

SECTION 6.04.       PAYMENT OF TAXES AND OTHER CLAIMS

                  The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary of
the Company or upon the income, profits, or property of the Company or any
Subsidiary of the Company, and (b) all lawful claims for labor, materials and
supplies, in each case which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary of the Company and would have a
Material Adverse Effect; provided, however, that (x) the Company will not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge, or claim the amount, applicability, or validity of which is
being contested in good faith by appropriate proceedings, and (y) any failure to
pay any such tax, assessment, charge, or claim shall not constitute a breach of
this Section 6.04 if such failure (i) was not willful and (ii) does not and will
not result in any Material Adverse Effect.

SECTION 6.05.       EXISTENCE

                  Subject to Article XI, the Company will, and will cause each
of its Subsidiaries to, do or cause to be done all things necessary to preserve
and keep in full force and effect its existence, rights (charter and statutory),
and franchises; provided, however, that, except with respect to the preservation
of the Company's existence, nothing in this Section 6.06 will (i) require the
Company to take any action that it determines in good faith to be contrary to
its best interests, so long as the failure to take such action will not have a
Material Adverse Effect, or (ii) prevent the Company from taking any action that
it determines in good faith to be in its best interests, so long as the taking
of such action will not have a Material Adverse Effect.

SECTION 6.06.       COMPLIANCE WITH LAWS

                  The Company will, and will cause each of its Subsidiaries to,
comply with all applicable federal, state, local, or foreign laws, rules,
regulations, or ordinances, including without limitation such laws, rules,
regulations, or ordinances relating to pension, environmental, employee, and tax
matters, to the extent that, in the aggregate, the failure so to comply would
have a Material Adverse Effect.

SECTION 6.07.       STATEMENT BY OFFICERS AS TO DEFAULT

                  The Company will deliver to the Trustee, within 120 calendar
days after the end of each fiscal year of the Company ending after the date
hereof, an officer's certificate signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company
stating whether or not to the knowledge of such person after due inquiry the
Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company is in
default, specifying all such defaults and the nature and status thereof of which
such person may have such knowledge.

SECTION 6.08.       WAIVER OF CERTAIN COVENANTS

                  The Company may omit in any particular instance to comply with
any term, provision, or condition set forth in Sections 6.04 and 6.06 and such
provisions of any Supplemental Indenture as may be specified in such
Supplemental Indenture, with respect to the Securities of any series if the
Holders of a majority in principal amount of the Outstanding Securities of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision, or condition,
but no such waiver will extend to or affect such term, provision, or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision, or condition will remain in full force and
effect.

SECTION 6.09.       CALCULATION OF ORIGINAL ISSUE DISCOUNT

                   The Company will, to the extent applicable, file with the
Trustee promptly at the end of each calendar year (i) a written notice
specifying the amount of original issue discount (including daily rates and
accrual periods) accrued on Outstanding Securities as of the end of such year
and (ii) such other specific information relating to such original issue
discount as may then be required under the Internal Revenue Code of 1986, as
amended from time to time.

               ARTICLE VII. SECURITIES HOLDERS' LISTS AND REPORTS
                         BY THE COMPANY AND THE TRUSTEE

SECTION 7.01.       COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS

                  The Company will furnish or cause to be furnished to the
Trustee (a) semi-annually, not more than 15 calendar days after the applicable
Regular Record Date, a list for each series of Securities, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Securities of such series as of such Regular Record Date and (b) at such other
times as the Trustee may request in writing, within 30 calendar 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 calendar days prior to the time such list is
furnished; excluding from any such list names and addresses received by the
Trustee in its capacity as Security Registrar.

SECTION 7.02.       PRESERVATION OF INFORMATION; COMMUNICATION TO HOLDERS

                  (a) The Trustee will preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 7.01 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.

                  (b) The rights of the Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the Trustee, will be
as provided by the Trust Indenture Act.

                  (c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them will be held accountable by reason of
any disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.

SECTION 7.03.       REPORTS BY TRUSTEE

                  The Trustee will transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided therein. If
required by Section 313(a) of the Trust Indenture Act, the Trustee will, within
sixty days after each May 15 following the date of this Indenture, deliver to
Holders a brief report, dated as of such May 15, which complies with the
provisions of such Section 313(a). A copy of each such report will, at the time
of such transmission to Holders, be filed by the Trustee with each stock
exchange upon which any Securities are listed, with the Commission, and with the
Company. The Company will promptly notify the Trustee when any Securities are
listed on any stock exchange.

SECTION 7.04.       REPORTS BY COMPANY

                  The Company will file with the Trustee and the Commission, and
transmit to Holders, such information, documents, and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided therein; provided that any such information,
documents, or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act will be filed with the Trustee within 15
calendar days after the same is so required to be filed with the Commission.
Delivery of such reports, information, and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such will not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).

                              ARTICLE VIII. DEFAULT

SECTION 8.01.       EVENT OF DEFAULT

                  (a) "Event of Default," wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it may 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):

                           (i) default in the payment of any interest on any
         Security of that series when it becomes due and payable, and
         continuance of such default for a period of [30] calendar days;

                           (ii) default in the payment of principal of (or
         premium, if any, on) any Security of that series when it becomes due
         and payable, whether by redemption, repurchase, or otherwise;

                           (iii) default in the making of any sinking fund
         payment when and as due by the terms of a Security of that series;

                           (iv) default in the performance, or breach, of any
         covenant or warranty of the Company in this Indenture (other than a
         covenant or warranty, a default in the performance or breach of which
         is elsewhere in this Section 8.01 specifically dealt with or which has
         expressly been included in this Indenture solely for the benefit of one
         or more series of Securities other than that series), and continuance
         of such default or breach for a period of 30 calendar 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 principal amount of the Outstanding Securities of that series 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;

                           (v) any default in the payment at maturity of
         principal of any Indebtedness of the Company or any Subsidiary of the
         Company in an aggregate principal amount of $25.0 million or more,
         which, in any such case, (A) continues beyond any period of grace
         provided with respect thereto and (B) results in such Indebtedness
         becoming due prior to its stated maturity or occurs at the final
         maturity of such Indebtedness; provided, however, that, subject to the
         provisions of Section 10.01 and 8.08, the Trustee will not be deemed to
         have knowledge of such nonpayment or other default unless either (1) a
         Responsible Officer of the Trustee has actual knowledge of nonpayment
         or other default or (2) the Trustee has received written notice thereof
         from the Company, from any Holder, from the holder of any such
         Indebtedness or from the trustee under the agreement or instrument
         relating to such Indebtedness;

                           (vi) the entry of one or more judgments or orders for
         the payment of money against the Company, which judgments and orders
         create a liability of $25.0 million or more in excess of insured
         amounts and have not been stayed (by appeal or otherwise), vacated,
         discharged, or otherwise satisfied within 60 calendar days of the entry
         of such judgments and orders;

                           (vii) the entry by a court having jurisdiction in the
         premises of (A) a decree or order for relief in respect of the Company
         or any Subsidiary in an involuntary case or proceeding under any
         applicable federal or state bankruptcy, insolvency, reorganization, or
         other similar law or (B) a decree or order adjudging the Company or any
         Subsidiary a bankrupt or insolvent, or approving as properly filed a
         petition seeking reorganization, arrangement, adjustment, or
         composition of or in respect of the Company or any Subsidiary under any
         applicable federal or state law, or appointing a custodian, receiver,
         liquidator, assignee, trustee, sequestrator, or other similar official
         of the Company or any Subsidiary or of any substantial part of its
         property, or ordering the winding up or liquidation of its affairs, and
         the continuance of any such decree or order for relief or any such
         other decree or order unstayed and in effect for a period of 60
         calendar days;

                           (viii) the commencement by the Company or any
         Subsidiary of a voluntary case or proceeding under any applicable
         federal or state bankruptcy, insolvency, reorganization, or other
         similar law or of any other case or proceeding to be adjudicated a
         bankrupt or insolvent, or the consent by it to the entry of a decree or
         order for relief in respect of the Company or any Subsidiary in an
         involuntary case or proceeding under any applicable federal or state
         bankruptcy, insolvency, reorganization, or other similar law or to the
         commencement of any bankruptcy or insolvency case or proceeding against
         it, or the filing by it of a petition or answer or consent seeking
         reorganization or relief with respect to the Company under any
         applicable federal or state bankruptcy, insolvency, reorganization, or
         other similar law, or the consent by it to the filing of such petition
         or to the appointment of or taking possession by a custodian, receiver,
         liquidator, assignee, trustee, sequestrator, or other similar official
         of the Company or any Subsidiary or of any substantial part of its
         property pursuant to any such law, or the making by it of an assignment
         for the benefit of creditors, or the admission by it in writing of its
         inability to pay its debts generally as they become due, or the taking
         of corporate action by the Company or any Subsidiary in furtherance of
         any such action; or

                           (ix) any other Event of Default provided in an
         indenture supplemental hereto with respect to Securities of that series
         created thereunder.

                  (b) If an Event of Default (other than an Event of Default
arising under Section 8.01(a)(vii) or (viii)) with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in
the terms thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) will become immediately due and payable. If an Event of Default under
Section 8.01(a)(vii) or (viii) occurs, then the principal of, premium, if any,
and accrued interest on the Securities shall become immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.

                  (c) At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article VIII provided, the Holders of a majority in
principal amount of the outstanding Securities of that series, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if (i) the Company has paid or deposited with the Trustee a sum
sufficient to pay (A) all overdue interest on all Securities of that series, (B)
the principal of (and premium, if any, on) any Securities of that series which
have become due otherwise than by such declaration of acceleration and any
interest thereon at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue
interest at the rate or rates prescribed therefor in such Securities, and (D)
all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements, and advances of the Trustee and its
agents and counsel and (ii) all Events of Default with respect to Securities of
that series, other than the non-payment of the principal of Securities of that
series that has become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 8.01(d). No such rescission will affect
any subsequent default or impair any right consequent thereon.

                  (d) The Holders of a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default (i) in the payment of the
principal of or any premium or interest on any Security of such series or (ii)
in respect of a covenant or provision hereof which under Article X cannot be
modified or amended without the consent of the Holder of each Outstanding
Security of such series affected. Upon any such waiver, such default will cease
to exist, and any Event of Default arising therefrom will be deemed to have been
cured, for every purpose of this Indenture, but no such waiver will extend to
any subsequent or other default or impair any right consequent thereon.

SECTION 8.02. COVENANT OF COMPANY TO PAY TO TRUSTEE WHOLE AMOUNT DUE ON 
              SECURITIES ON DEFAULT IN PAYMENT OF INTEREST OR PRINCIPAL; SUITS
              FOR ENFORCEMENT BY TRUSTEE

                  (a) The Company covenants that if (i) default is made in the
payment of any interest on any Security when such interest becomes due and
payable and such default continues for a period of 30 calendar days or (ii)
default is made in the payment of the principal of (or premium, if any, on) any
Security when it becomes due and payable, the Company will, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such Securities, the whole
amount then due and payable on such Securities for principal and any premium and
interest and, to the extent that payment of such interest will be legally
enforceable, interest on any overdue principal and premium and on any overdue
interest, at the rate or rates prescribed therefor in such Securities, and, in
addition thereto, such further amount as will be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel.

                  (b) If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

                  (c) In case of any judicial proceeding relative to the Company
(or any other obligor upon the Securities), its property or its creditors, the
Trustee will be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee will be authorized to collect and receive
any money or other property payable or deliverable on any such claims and to
distribute the same, and any custodian, receiver, assignee, trustee, liquidator,
sequestrator, or other similar official in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee consents to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements, and advances of the Trustee and its
agents and counsel, and any other amounts due the Trustee under Section 10.06.

                  (d) No provision of this Indenture will be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment, or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding;
provided, however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors' or other similar committee.

                  (e) All rights of action and claims under this Indenture or
the Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee will be
brought in its own name as trustee of an express trust, and any recovery of
judgment will, after provision for the payment of the reasonable compensation,
expenses, disbursements, and advances of the Trustee and its agents and counsel,
be for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.

SECTION 8.03.       APPLICATION OF MONEY COLLECTED BY TRUSTEE

                  Any money collected by the Trustee pursuant to this Article
VIII will be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or any premium or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:

                  FIRST: To the payment of all amounts due the Trustee under
                  Section 10.06; and

                  SECOND: To the payment of the amounts then due and unpaid for
                  interest on the Securities in respect of which or for the
                  benefit of which such money has been collected, ratably,
                  without preference or priority of any kind, according to the
                  amounts due and payable on such Securities for interest
                  thereon.

                  THIRD: To the payment of the amounts then due and unpaid for
                  principal of and any premium on the Securities in respect of
                  which or for the benefit of which such money has been
                  collected, ratably, without preference or priority of any
                  kind, according to the amounts due and payable on such
                  Securities for principal and any premium, respectively.

SECTION 8.04.       LIMITATION ON SUITS BY HOLDERS OF SECURITIES

                  Except as otherwise provide in Section 316(b) of the Trust
Indenture Act, no Holder of any Security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of that
series, (b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder, (c) such Holder or Holders have offered to the
Trustee reasonable indemnity against the costs, expenses, and liabilities to be
incurred in compliance with such request, (d) the Trustee for 60 calendar days
after its receipt of such notice, request, and offer of indemnity has failed to
institute any such proceeding, and (e) no direction inconsistent with such
written request has been given to the Trustee during such 60-day period by the
Holders of a majority in principal amount of the Outstanding Securities of that
series, it being understood and intended that no one or more of such Holders
will have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb, or prejudice the rights of any
other of such Holders, or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all of such Holders.

SECTION 8.05. RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION IN EXERCISE OF 
              RIGHTS NOT A WAIVER
 .             OF EVENT OF DEFAULT

                  (a) Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost, or stolen Securities in
the last paragraph of Section 2.07, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy will, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, will not
prevent the concurrent assertion or employment of any other appropriate right or
remedy.

                  (b) No delay or omission of the Trustee or of any Holder of
any Securities to exercise any right or remedy accruing upon any Event of
Default will 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 VIII or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.

SECTION 8.06.       RIGHTS OF HOLDERS  OF  MAJORITY  IN  PRINCIPAL  AMOUNT OF
                    OUTSTANDING  SECURITIES  TO DIRECT TRUSTEE

                  The Holders of a majority in principal amount of the
Outstanding Securities of any series will have the right to direct the Trustee
with respect to the time, method, and place of conducting any proceeding for any
remedy available to the Trustee and the exercise of any trust or power conferred
on the Trustee, in each case with respect to the Securities of such series,
provided that (a) such direction will not be in conflict with any rule of law or
with this Indenture and (b) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction.

SECTION 8.07.       REQUIREMENT  OF AN  UNDERTAKING  TO PAY COSTS IN CERTAIN
                    SUITS UNDER THE INDENTURE OR AGAINST THE TRUSTEE

                  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,
suffered, or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs, including legal fees and expenses, against any such party litigant, in
the manner and to the extent provided in the Trust Indenture Act; provided that
neither this Section 8.07 nor the Trust Indenture Act will be deemed to
authorize any court to require such an undertaking or to make such an assessment
in any suit instituted by the Trustee or by the Company.

SECTION 8.08.       NOTICE OF DEFAULTS

                  If a Default occurs hereunder with respect to Securities of
any series, the Trustee will give the Holders of Securities of such series
notice of such Default actually known to it as and to the extent provided by the
Trust Indenture Act; provided, however, that in the case of any Default of the
character specified in Section 8.01(a)(iv) with respect to Securities of such
series no such notice to Holders will be given until at least 30 calendar days
after the occurrence thereof. The Company will give the Trustee notice of any
uncured Event of Default within 10 days after any Responsible Officer of the
Company becomes aware of or receives actual notice of such Event of Default.

SECTION 8.09.       UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
                    PREMIUM, AND INTEREST

                  Notwithstanding any other provision in this Indenture, the
Holder of any Security will have the right, which is absolute and unconditional,
to receive payment of the principal of, premium, if any, and (subject to Section
2.09) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights may not
be impaired without the consent of such Holder.

SECTION 8.10.       RESTORATION OF RIGHTS AND REMEDIES

                  If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee, and the Holders will
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders will continue
as though no such proceeding had been instituted.

SECTION 8.11.       TRUSTEE MAY FILE PROOFS OF CLAIMS

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

                     ARTICLE IX SUBORDINATION OF SECURITIES

SECTION 9.01        SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS

                  To the extent and in the manner hereinafter set forth in this
Article IX, the payment of principal of, premium, if any, and interest on and
all other payments in respect of the Securities of any series issued under this
Indenture shall be subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness, including (without limitation) all
principal thereof and all premium, if any, and interest thereon.

SECTION 9.02        PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.

                  In the event of (a) any insolvency or bankruptcy case or
proceeding or other similar case or proceeding under any Federal or state
bankruptcy or similar law, or any receivership, liquidation, arrangement,
relief, reorganization or other similar case or proceeding in connection
therewith, relative to the Company or to its assets, or (b) any liquidation,
dissolution, reorganization, compromise, arrangement, adjustment, protection,
composition, relief or other winding up of the Company or its debts, whether
voluntary or involuntary and whether or not involving any insolvency or
bankruptcy or any case or proceeding of any kind, or (c) any assignment for the
benefit of creditors or any other marshaling of assets and liabilities of the
Company, then, and in each such event, the holders of Senior Indebtedness shall
be entitled to receive payment in full of all amounts due or to become due on or
in respect of all Senior Indebtedness, before the Company may make, and before
any Holder of Securities is entitled to receive or retain, any payment or
distribution of any kind or character (whether in cash, property or securities)
on account of Securities, and to that end the Holders of Securities agree to
promptly pay over, or cause to be paid over, to the holders of Senior
Indebtedness (pro rata to each such holder on the basis of the respective
amounts of such Senior Indebtedness held by such holder) any payment or
distribution of any kind or character, whether in cash, property or securities,
received from the Company to the extent necessary to pay or prepay in full the
Senior Indebtedness.

         Each Holder of Securities shall duly and promptly take such action as
is reasonably necessary to file appropriate claims or proofs of claims in any
such proceedings referred to in this Section 9.02 and to execute and deliver
such other instruments and take such other actions as may be reasonably
necessary to prove or realize upon such claims and to have the proceeds of such
claims paid as provided in this Section 9.02, and, in the event any Holder of
Securities shall not have made any such filing on or prior to the date 30 days
before the expiration of the time for such filing or shall not have timely
executed or delivered any such other instruments and taken such other actions,
the holders of not less than 25% of any series of Senior Indebtedness, acting
through a trustee, agent or otherwise, are hereby irrevocably authorized and
empowered (but shall have no obligation) to, as the agent and attorney-in-fact
for such holder for the specific and limited purpose set forth in this
paragraph, file such proof of claim for or on behalf of such holder, execute and
deliver such other instrument for or on behalf of such holder and take such
other action necessary under applicable law to collect any amounts due in
respect of such claim in such proceeding. Anything contained in this paragraph
notwithstanding, the right to vote any claim or claims in respect of any
Securities in connection with any proceedings referred to in this Section 9.02
is exclusively reserved to the holder of such Securities.

SECTION 9.03 PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON ACCELERATION OF 
             SECURITIES

                  In the event that Securities of any series are declared due
and payable before their Stated Maturity, then and in such event the holders of
Senior Indebtedness outstanding at the time such Securities so become due and
payable shall be entitled to receive payment in full on all amounts due or to
become due on or in respect of such Senior Indebtedness before the Company may
make, and before any Holder of such Securities is entitled to receive or retain,
any payment or distribution of assets of the Company or any Subsidiary of any
kind or character, whether in cash, property or securities on account of any
such Securities.

SECTION 9.04        PAYMENT LIMITATION

                  (a) In the event and during the continuance of any Senior
Default (as hereinafter in this paragraph defined) and prior to the declaration
of such Senior Indebtedness to be due and payable prior to its stated maturity,
the holders of not less than 25% of the aggregate principal amount of such
series of Senior Indebtedness, acting through a trustee, agent or otherwise may
give to both the Company and each Holder of Securities written notice referring
to the Securities and this Indenture and specifying that it is a notice of a
Senior Default (a "Senior Default Notice") and, thereafter, no payment or
distribution of any kind or character (whether in cash, property or securities)
shall be made on or in respect of any Securities, and no Holder of Securities
shall take or receive or retain from the Company or any Subsidiary, directly or
indirectly, in cash, property or securities, or by way of set-off or in any
other manner, payment of all or any of the Securities during the period (a
"Senior Default Blockage Period") commencing on the date of receipt by both the
Company and the Trustee of such notice and ending on the earliest of (i) the
date of the repayment in full of such Senior Indebtedness, (ii) the date on
which such Senior Indebtedness shall have been declared due and payable prior to
its stated maturity (in which case Section 9.04(b) shall govern), (iii) the date
on which such Senior Default shall have been cured or waived, (iv) the date on
which the holders of not less than 25% of the aggregate outstanding principal
amount of such series of Senior Indebtedness, acting through a trustee, agent or
otherwise, shall have delivered to the Company and the Trustee a notice
referring to the Securities and the immediately preceding Senior Default Notice
and stating that such Senior Default Notice has been withdrawn, or (v) the 180th
day following the receipt by both the Company and the Trustee of such Senior
Default Notice pursuant to this clause (a). Any number of Senior Default Notices
may be given, provided that (A) only one Senior Default Notice may be given with
respect to any single occurrence of a Senior Default and (B) no Senior Default
Notice shall be effective at any time to prevent any payment from being made by
or on behalf of the Company or any Subsidiary for or on account of any
Securities (and any such Senior Default Notice shall be or become null and void
ab initio) if, within the 360-day period next preceding the date on which such
Senior Default Notice shall have been delivered to the Company and the Trustee,
a Senior Default Blockage Period was in effect for all or part of such period.
All payments in respect of Securities postponed during any Senior Default
Blockage Period shall be immediately due and payable upon the termination
thereof (together with such additional interest as is provided herein, any
indentures supplemental hereto and in the Securities for late payment of
principal, premium or interest). As used herein, the term "Senior Default" means
any default with respect to any Senior Indebtedness which as of such time
permits the holders of not less than 25% of the aggregate outstanding principal
amount of such Senior Indebtedness to cause such Senior Indebtedness to become
due prior to its scheduled maturity.

                  (b) In the event that the holders of not less than 25% of the
aggregate outstanding principal amount of any series of Senior Indebtedness
shall declare such series of Senior Indebtedness to be due and payable prior to
its stated maturity as a result of the occurrence of a Senior Default in respect
thereof, no payment or distribution of any kind or character (whether in cash,
property or securities) shall be made on or in respect of any Securities, and no
Holder of Securities shall take or receive or retain from the Company or any
Subsidiary, directly or indirectly, in cash, property or securities, or by way
of set-off or in any other manner, payment of all or any of the Securities until
the earlier of (i) the payment in full of such series of Senior Indebtedness or
(ii) the rescission or termination of such declaration.

                  (c) The provisions of this Section 9.04 shall not apply to any
payment with respect to which Section 9.02 or Section 9.03 would be applicable.

SECTION 9.05        PAYMENT PERMITTED

                  Nothing contained in this Article IX or elsewhere in this
Indenture, any indenture supplemental hereto or in any Securities issued
hereunder shall prevent the Company at any time, except as expressly provided in
Section 9.02, Section 9.03, Section 9.04 or Section 9.06, from making payments
of principal of or premium, if any, or interest on Securities of any series in
accordance with the terms thereof.

SECTION 9.06        CERTAIN LIMITATIONS

                  As long as any Senior Indebtedness remains outstanding, no
Holder of Securities shall (a) exchange all or part of such for any equity
security of the Company, except as provided in Section 9.02, (b) forgive all or
any part of such Securities, except as provided in Section 9.02 or (c) accept
any optional prepayment with respect to such Securities if, after receipt of
written notice from the Company, such prepayment would constitute an event of
default under, and as defined in, any agreement or agreements with respect to
any Senior Indebtedness.

SECTION 9.07        SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS

                  Holders of Securities of each series hereunder shall be
subrogated equally and ratably to the rights of the holders of Senior
Indebtedness at the time outstanding to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness; provided,
however, that no payment or distribution to any holder or owner of Senior
Indebtedness pursuant to this Article IX shall entitle any Holder of Securities
to exercise any rights of subrogation in respect thereof until all Senior
Indebtedness shall have been paid in full. For purposes of such subrogation, no
payments or distributions to the holders of Senior Indebtedness of any cash,
property or securities to which the Holders of Securities would be entitled
except for the provisions of this Article IX, shall, as among the Company, its
creditors other than holders of Senior Indebtedness and the holders of Senior
Indebtedness and the Holders of Securities, be deemed to be a payment or
distribution by the Company to or on account of Senior Indebtedness.

SECTION 9.08        PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS

                  The provisions of this Article IX are and are intended solely
for the purpose of defining the relative rights of the Holders of Securities on
the one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article IX or elsewhere in this Indenture, any indenture
supplemental hereto or in the Securities issued hereunder is intended to or
shall (a) impair, as among the Company, its creditors (other than holders of
Senior Indebtedness) and the Holders of Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of
Securities the principal of, premium, if any, and interest on, and all other
amounts payable with respect to, the Securities as and when the same shall
become due and payable in accordance with their respective terms, (b) affect the
relative rights against the Company of the Holders of Securities and creditors
of the Company (other than the holders of Senior Indebtedness), (c) prevent the
Holder of any Securities from exercising all remedies otherwise permitted by
applicable law upon a Default or Event of Default under this Indenture, subject
to the rights under the provisions of Section 9.02, Section 9.03 and Section
9.04 hereof of the holders of Senior Indebtedness to receive cash, property or
securities otherwise payable or deliverable to the Holders of Securities or (d)
restrict or otherwise impair the right of the Holders of Securities to, in
accordance with the terms of this Indenture, declare the Securities of any
series to be due and payable prior to their respective stated maturity upon the
occurrence of an Event of Default.

SECTION 9.09        AGREEMENT TO EFFECTUATE SUBORDINATION

                  (a) Each Holder of Securities by its acceptance thereof agrees
to take such action as may be reasonably necessary or appropriate to effectuate,
as between the holders of Senior Indebtedness and such Holder of Securities, the
subordination provided in this Article IX.

                  (b) The provisions of this Article IX (including, without
limitation, this Section 9.09) may not be amended, modified or waived without
the prior written consent of all the holders of Senior Indebtedness which is at
the time outstanding. The provisions set forth in Article IX constitute a
continuing agreement and shall (i) be and remain in full force and effect at any
time, and from time to time, during which any Senior Indebtedness shall remain
outstanding, (ii) be binding upon the Holders of Securities and the Company and
its successors, transferees and assigns, and (iii) inure to the benefit of, and
be enforceable, in accordance with the terms hereof, directly by, each of the
holders of the Senior Indebtedness and their respective successors, transferees
and assigns, against the Holders of Securities and the Company and their
successors, transferees and assigns.

SECTION 9.10        NO WAIVER OF SUBORDINATION PROVISIONS

                  (a) No right of any present or future holder of any Senior
Indebtedness to enforce its rights under this Indenture 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 non-compliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof any such holder may have or
be otherwise charged with.

                  (b) 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 any Holder of Securities,
without incurring responsibility to any Holder of Securities and without
impairing or releasing the subordination provided in this Article IX or the
obligations hereunder of any Holder of Securities to the holders of 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, all or
any of the Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) sell, exchange, release, not
perfect or otherwise deal with any property pledged, assigned or mortgaged to
secure, or otherwise securing, Senior Indebtedness; (iii) as holders of Senior
Indebtedness, exercise or refrain from exercising any rights against the Company
and any other Person; and (iv) apply any sums from time to time received to the
payment of the Senior Indebtedness.

SECTION 9.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT

                  Upon any payment or distribution of assets of the Company
referred to in this Article IX, the Holders of Securities shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which any insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
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 IX.

SECTION 9.12        PROHIBITED PAYMENTS HELD IN TRUST

                  In the event that, notwithstanding the provisions of this
Article IX, the Company or any Subsidiary shall make, or any Holder of
Securities shall receive or retain, any payment or distribution of the Company's
or such Subsidiary's assets of any kind or character, whether in cash, property
or securities, then and in such event such payment or distribution shall be
received and held by such Holder of Securities in trust for the benefit of the
holders of Senior Indebtedness, shall be paid over or delivered, in the same
form as so received (with any necessary endorsement) forthwith to such holders
of Senior Indebtedness (pro rata to each such holder on the basis of the
respective amounts of such Senior Indebtedness held by such holder) for
application to the payment or prepayment in full of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.

                        ARTICLE X. CONCERNING THE TRUSTEE

SECTION 10.01.      CERTAIN DUTIES AND RESPONSIBILITIES

                  The duties and responsibilities of the Trustee will be as
provided herein and by the Trust Indenture Act and will be performed in
accordance with Section 315(c) of the Trust Indenture Act. Notwithstanding the
foregoing, no provision of this Indenture will require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee will be subject to the provisions of this
Section 10.01.

SECTION 10.02.      CERTAIN RIGHTS OF TRUSTEE

                  Subject to the provisions of Section 10.01: (a) the Trustee
may conclusively rely and will be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness, 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 or direction of the Company mentioned herein will be sufficiently
evidenced by a Company Request or Company Order and any resolution of the Board
will be sufficiently evidenced by a Board Resolution; (c) whenever in the
administration of this Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering, or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an Officer's
Certificate; (d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel will be full and complete
authorization and protection in respect of any action taken, suffered, or
omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee
will be under no obligation to exercise any of the rights or powers vested in it
by this Indenture at the request or direction of any of the Holders pursuant to
this Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses, and liabilities which might
be incurred by it in compliance with such request or direction; (f) the Trustee
will not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it will be entitled to examine the books, records, and premises
of the Company, personally or by agent or attorney; (g) the Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee will not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder; (h) the Trustee will not be
liable for any action taken, suffered, or omitted to be taken by it in good
faith and reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture, unless it shall be proved
that the Trustee acted, or failed to act, in a negligent manner; and (i) the
Trustee will not be deemed to have notice of any Default or Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event or circumstance which is in fact such a
Default or Event of Default is received by the Trustee at the Corporate Trust
Office of the Trustee, and such notice references the Securities (or the
applicable series thereof) and this Indenture.

SECTION 10.03.      NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES

                  The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, may be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. The Trustee
or any Authenticating Agent will not be accountable for the use or application
by the Company of Securities or the proceeds thereof.

SECTION 10.04.      MAY HOLD SECURITIES

                  The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar, or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 10.07 and 10.12, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar, or such other agent.

SECTION 10.05.      MONEY HELD IN TRUST

                  Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required herein or by law. The
Trustee will be under no liability for interest on any money received by it
hereunder except as otherwise agreed in writing with the Company. SECTION 10.06.
COMPENSATION AND REIMBURSEMENT

                  (a) The Company will (i) pay to the Trustee from time to time
such compensation as shall be agreed to in writing between the Company and the
Trustee for all services rendered by it hereunder (which compensation will not
be limited to any provision of law in regard to the compensation of a trustee of
an express trust); (ii) except as otherwise expressly provided herein, reimburse
the Trustee upon its request for all reasonable expenses, disbursements, and
advances incurred or made by the Trustee in accordance with provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of agents and counsel), except any such expense, disbursement, or
advance as may be attributable to its negligence or bad faith; and (iii)
indemnify the Trustee and any predecessor Trustee for, and hold them harmless
against, any and all losses, liabilities, damages, claims and expenses,
including taxes (other than taxes based on the income of the Trustee or
predecessor Trustee and other taxes relating to the Trustee's or predecessor
Trustee's overall business and operations) incurred without negligence or bad
faith on its part arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.

                  (b) The Trustee will have a lien prior to the Securities as to
all property and funds held by it hereunder for any amount owed to it or any
predecessor Trustee pursuant to this Section 10.06, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.

                  (c) When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 8.01(a)(vii) or Section
8.01(a)(viii), such expenses (including the reasonable fees and expenses of its
counsel) and the Trustee's compensation for such services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency, or other similar law.

                  (d) The provisions of this Section 10.06 will survive the
termination of this Indenture.

SECTION 10.07.      DISQUALIFICATION; CONFLICTING INTERESTS

                  If the Trustee has or acquires a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee will either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and Sections 10.09 and 10.10 of this
Indenture.

SECTION 10.08.      CORPORATE TRUSTEE REQUIRED ELIGIBILITY

                  There will at all times be one or more Trustees hereunder with
respect to the Securities of each series, at least one of which will be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $100,000,000 and its Corporate Trust
Office or principal office in New York City, or any other major city in the
United States that is acceptable to the Company. If such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of a supervising or examining state or federal authority, then for the purposes
of this Section 10.08, the combined capital and surplus of such Person 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 the Trustee shall cease to be
eligible in accordance with the provisions of this Section 10.08, or the terms
of the Trust Indenture Act, it will resign immediately in the manner and with
the effect hereinafter specified in this Article X.

SECTION 10.09.      RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR

                  (a) Unless otherwise required under the Trust Indenture Act,
no resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article X will become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 10.10.

                  (b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 10.10 shall not have been delivered to the Trustee within 30 calendar
days after the giving of such notice of resignation, the resigning Trustee may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

                  (c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 10.10 shall not have been delivered to the Trustee within 30 calendar
days after the giving of such notice of removal, the Trustee being removed may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

                  (d) If, at any time, (i) the Trustee fails to comply with
Section 10.07 after written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Security for at least six months, (ii) the
Trustee ceases to be eligible under Section 10.08 and fails to resign after
written request therefor by the Company or by any such Holder, or (iii) the
Trustee becomes incapable of acting or is adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property is appointed or any public officer
takes 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,
(A) the Company by a Board Resolution may remove the Trustee with respect to all
Securities or (B) subject to Section 8.07, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.

                  (e) If the Trustee resigns, is removed, or becomes incapable
of acting, or if a vacancy occurs in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company by a Board
Resolution will promptly appoint a successor Trustee or Trustees with respect to
the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there will be only one Trustee with
respect to the Securities of any particular series) and will comply with the
applicable requirements of Section 10.10. If, within one year after such
resignation, removal, or incapability or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series is appointed by
Act of the Holders of a majority in principal amount of the Outstanding
Securities of such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed will, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 10.10,
become the successor Trustee with respect to the Securities of such series and
to that extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 10.10, any Holder who has been a bona fide Holder of
a Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

                  (f) The Company will give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to all holders of Securities of such series in the manner provided in Section
14.03. Each notice will include the name of the successor Trustee with respect
to the Securities of such series and the address of its Corporate Trust Office.

SECTION 10.10.      ACCEPTANCE OF APPOINTMENT BY SUCCESSOR

                  (a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee so
appointed will execute, acknowledge, and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee will become effective and such
successor Trustee, without any further act, deed, or conveyance, will become
vested with all the rights, powers, trusts, and duties of the retiring Trustee,
but, on the request of the Company or the successor Trustee, such retiring
Trustee will, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers, and duties of the
retiring Trustee and will duly assign, transfer, and deliver to such Trustee all
property and money held by such retiring Trustee hereunder.

                  (b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee, and each successor Trustee with respect to the
Securities of one or more series will execute and deliver an indenture
supplemental hereto wherein such successor Trustee will accept such appointment
and which (i) will contain such provisions as may be necessary or desirable to
transfer and confirm to, and to vest in, each successor Trustee all the rights,
powers, trusts, and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (ii) if the retiring Trustee is not retiring with respect to
all Securities, will contain such provisions as may be deemed necessary or
desirable to confirm that all the rights, powers, trusts, and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring will continue to be vested in the
retiring Trustee, and (iii) will add to or change any of the provisions of this
Indenture as may be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture will constitute such Trustees
co-trustees of the same trust and that each such Trustee will be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustees and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
will become effective to the extent provided therein and each such successor
Trustee, without any further act, deed, or conveyance, will become vested with
all the rights, powers, trusts, and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but on request of the Company or any successor
Trustee, such retiring Trustee will duly assign, transfer, and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.

                  (c) Upon request of any such successor Trustee, the Company
will execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all applicable rights, powers, and trusts
referred to in the preceding paragraphs of this Section 10.10.

                  (d) No successor Trustee will accept its appointment unless at
the time of such acceptance such successor Trustee is qualified and eligible
under this Article IX.

SECTION 10.11.      MERGER, CONVERSION, CONSOLIDATION, OR SUCCESSION TO BUSINESS

                  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 may be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, will be the successor of the Trustee hereunder,
provided such corporation is otherwise qualified and eligible under this Article
IX, without the execution or filing of any paper or any further act on the part
of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion, or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.

SECTION 10.12.      PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY

                  If and when the Trustee is or becomes a creditor, directly or
indirectly, secured or unsecured, of the Company (or any other obligor upon the
Securities) within the meaning of the Trust Indenture Act, the Trustee will
comply with the relevant provisions of the Trust Indenture Act regarding the
collection of claims against the Company (or any such other obligor).

SECTION 10.13.      APPOINTMENT OF AUTHENTICATING AGENT

                  (a) The Trustee may appoint an Authenticating Agent or Agents
with respect to one or more series of Securities which will be authorized to act
on behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer, or partial
redemption thereof or pursuant to Section 2.07, and Securities so authenticated
will be entitled to the benefits of this Indenture and will be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference will be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any state thereof, or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by federal or state authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section 10.13,
the combined capital and surplus of such Authenticating Agent will 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 10.13, such
Authenticating Agent will resign immediately in the manner and with the effect
specified in this Section 10.13.

                  (b) Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion, or consolidation to which such
Authenticating Agent may be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, will
continue to be an Authenticating Agent, provided such corporation is otherwise
eligible under this Section 10.13, without the execution or filing of any paper
or any further act on the part of the Trustee or the Authenticating Agent.

                  (c) An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof 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 such
Authenticating Agent shall cease to be eligible in accordance with the
provisions this Section 10.13, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and will mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
will become vested with all the rights, powers, and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent will be appointed unless eligible under the
provisions of this Section 10.13.

                  (d) The Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under this Section
10.13, and the Trustee will be entitled to be reimbursed for such payments,
subject to the provisions of Section 10.06.

                  (e) If an appointment with respect to one or more series of
Securities is made pursuant to this Section 10.13, the Securities of such series
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative form of certificate of authentication in the
following form:

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.


                                                                    ,
                                            as Trustee


                                            By:
                                                     As Authenticating Agent


                                            By:
                                                     Authorized Signatory


             ARTICLE XI. SUPPLEMENTAL INDENTURES AND CERTAIN ACTIONS

SECTION 11.01. PURPOSES FOR WHICH SUPPLEMENTAL INDENTURES MAY BE ENTERED INTO 
               WITHOUT CONSENT OF HOLDERS

                  Without the consent of or notice to any Holders, the Company,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

                  (a) to evidence the succession of another Person to the
         Company and the assumption by any such successor of the covenants of
         the Company herein and in the Securities, all to the extent otherwise
         permitted hereunder;

                  (b) to make any change to the provisions of this Indenture
         that would provide any additional rights or benefits to the Holders of
         the Securities;

                  (c) to add to or change any of the provisions of this
         Indenture to such extent as may be necessary to permit or facilitate
         the issuance of Securities in bearer form, registrable or not
         registrable as to principal, and with or without interest coupons, or
         to permit or facilitate the issuance of Securities in uncertificated
         form;

                  (d) to add to, change, or eliminate any of the provisions of
         this Indenture in respect of one or more series of Securities, provided
         that any such addition, change, or elimination (i) will neither (A)
         apply to any Security of any series created prior to the execution of
         such supplemental indenture and entitled to the benefit of such
         provision nor (B) modify the rights of the Holder of any such Security
         with respect to such provision or (ii) will become effective only when
         there is no such Security Outstanding;

                  (e) to establish the form or terms of Securities of any series
         as permitted by Sections 2.01 and 2.02;

                  (f) to evidence and provide for the acceptance of appointment
         hereunder by a successor Trustee with respect to the Securities of one
         or more series and to add to or change any of the provisions of this
         Indenture as may be necessary to provide for or facilitate the
         administration of the trusts hereunder by more than one Trustee,
         pursuant to the requirements of Section 10.10; or

                  (g) to cure any ambiguity, to correct or supplement any
         provision herein which may be defective or inconsistent with any other
         provision herein, or to make any other provisions with respect to
         matters or questions arising under this Indenture, provided that such
         action pursuant to this clause (g) will not adversely affect the
         interests of the Holders of Securities of any series in any material
         respect.

SECTION 11.02. MODIFICATION OF INDENTURE WITH CONSENT OF HOLDERS OF AT LEAST A 
               MAJORITY IN PRINCIPAL AMOUNT OF OUTSTANDING SECURITIES

                  (a) With the consent of the Holders of a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
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 modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture will, without the consent of the Holder of
each Outstanding Security affected thereby:

                  (i) change the Stated Maturity of the principal of, or any
         installment of principal of or interest on, any Security, or reduce the
         principal amount thereof or the rate of interest thereon or any premium
         payable upon the redemption thereof, or reduce the amount of the
         principal of an Original Issue Discount Security that would be due and
         payable upon a declaration of acceleration of the Maturity thereof
         pursuant to Sections 8.01(b), or change any Place of Payment where, or
         the coin or currency in which, any Security or any premium or interest
         thereon is payable, or impair the right to institute suit for the
         enforcement of any such payment on or after the Stated Maturity thereof
         (or, in the case of redemption, on or after the Redemption Date);

                  (ii) reduce the percentage in principal amount of the
         Outstanding Securities of any series, the consent of the Holders of
         which is required for any such supplemental indenture, or the consent
         of the Holders of which is required for any waiver (of compliance with
         certain provisions of this Indenture or certain defaults hereunder and
         their consequences) provided for in this Indenture; or

                  (iii) modify any of the provisions of this Section 11.02,
         Section 8.01(d) or Section 6.08, except to increase the percentage in
         principal amount of Holders required under any such Section or to
         provide that certain other provisions of this Indenture cannot be
         modified or waived without the consent of the Holder of each
         Outstanding Security affected thereby, provided, however, that this
         clause (c) will not be deemed to require the consent of any Holder with
         respect to changes in the references to "the Trustee" and concomitant
         changes in this Section 11.02 and Section 6.08, or the deletion of this
         proviso, in accordance with the requirements of Sections 10.10 and
         11.01(f).

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

                  (c) It will not be necessary for any Act of Holders under this
Section 11.02 to approve the particular form of any proposed supplemental
indenture, but it will be sufficient if such Act approves the substance thereof.

SECTION 11.03.      NO AMENDMENTS TO ARTICLE IX

                  Notwithstanding the provisions of Sections 11.01 and 11.02, no
amendments shall be made to the provisions of Article IX and this Section 11.03
without the unanimous consent of the holders of Outstanding Senior Indebtedness.

SECTION 11.04.      EXECUTION OF SUPPLEMENTAL INDENTURES

                  In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article X or the modifications
thereby of the trusts created by this Indenture, the Trustee will be entitled to
receive, and (subject to Section 10.01) will be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but will not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, or immunities under this Indenture or otherwise.

SECTION 11.05.      EFFECT OF SUPPLEMENTAL INDENTURES

                  Upon the execution of any supplemental indenture under this
Article X, this Indenture will be modified in accordance therewith, and such
supplemental indenture will form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder will be bound thereby.

SECTION 11.06.      CONFORMITY WITH TRUST INDENTURE ACT

                  Every supplemental indenture executed pursuant to this Article
X will conform to the requirements of the Trust Indenture Act.

SECTION 11.07.      REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES

                  Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article X may, and will
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

              ARTICLE XII. CONSOLIDATION, MERGER, SALE, OR TRANSFER

SECTION 12.01. CONSOLIDATIONS AND MERGERS OF COMPANY AND SALES PERMITTED ONLY ON
               CERTAIN TERMS

                  (a) The Company shall not consolidate with or merge with or
into any other Person, or transfer (by lease, assignment, sale, or otherwise)
its properties and assets substantially as an entirety to another Person unless
(i) either (A) the Company shall be the continuing or surviving Person in such a
consolidation or merger or (B) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or to which the
properties and assets of the Company are transferred substantially as an
entirety (the Company or such other Person being referred to as the "Surviving
Person") shall be a corporation organized and validly existing under the laws of
the United States, any state thereof, or the District of Columbia, and shall
expressly assume, by an indenture supplement, all the obligations of the Company
under the Securities and the Indenture, (ii) immediately after the transaction
and the incurrence or anticipated incurrence of any Indebtedness to be incurred
in connection therewith, no Default will exist, and (iii) an Officer's
Certificate has been delivered to the Trustee to the effect that the conditions
set forth in the preceding clauses (i) and (ii) have been satisfied and an
Opinion of Counsel (from a counsel who shall not be an employee of the Company)
has been delivered to the Trustee to the effect that the conditions set forth in
the preceding clause (i) have been satisfied.

                  (b) The Surviving Person will succeed to and be substituted
for the Company with the same effect as if it had been named herein as a party
hereto, and thereafter the predecessor corporation (if it is not the Surviving
Person) will be relieved of all obligations and covenants under this Indenture
and the Securities.

              ARTICLE XIII. SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 13.01.      SATISFACTION AND DISCHARGE OF INDENTURE

                  This Indenture will upon a Company Request cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense the Company, will execute proper instruments acknowledging satisfaction
and discharge of this Indenture, when: (a) either (i) all Securities theretofore
authenticated and delivered (other than (A) Securities which have been
destroyed, lost, or stolen and which have been replaced or paid as provided in
Section 2.07 and (B) Securities for the payment of which money has theretofore
been deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as provided in
Section 6.03) have been delivered to the Trustee for cancellation or (ii) all
such Securities not theretofore delivered to the Trustee for cancellation (A)
have become due and payable, (B) will become due and payable at their Stated
Maturity within one year, or (C) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company, and
the Company, in the case of clause (A), (B), or (C) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for such purpose
an amount sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be; (b) the Company has paid or caused to be
paid all other sums payable hereunder by the Company; and (c) the Company has
delivered to the Trustee an Officer's 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 satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 10.06, the obligations
of the Company to any Authenticating Agent under Section 10.13, and, if money
shall have been deposited with the Trustee pursuant to subclause (ii) of clause
(a) of this Section 13.01, the obligations of the Trustee under Sections 6.03(e)
and 13.02, will survive.

SECTION 13.02.      APPLICATION OF TRUST MONEY

                  Subject to provisions of Section 6.03(e), all money deposited
with the Trustee pursuant to Section 13.01 will be held in trust and applied by
it, in accordance with the provisions of the Securities and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal and any premium and interest for whose
payment such money has been deposited with the Trustee.

                      ARTICLE XIV. MISCELLANEOUS PROVISIONS

SECTION 14.01.      SUCCESSORS AND ASSIGNS OF COMPANY BOUND BY INDENTURE

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

SECTION 14.02.      SERVICE OF REQUIRED NOTICE TO TRUSTEE AND COMPANY

                  Any request, demand, authorization, direction, notice,
consent, waiver, Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with (a) the Trustee
by any Holder or by the Company will be sufficient for every purpose hereunder
if made, given, furnished, or filed in a writing received by the Trustee at its
Corporate Trust Office (addressed to the attention of: Corporate Trust Trustee
Administration) or (b) the Company by the Trustee or by any Holder will be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished, or filed in a writing received by the
Company at its principal executive offices (addressed to the attention of both
its Chief Financial Officer and its General Counsel). All such notices and other
communications shall be effective (i) if delivered by hand or prepaid courier
service, when delivered, (ii) if sent by mail, upon the earlier of the date of
receipt or five Business Days after deposit in the mail, first class, postage
prepaid, (iii) if sent by telex, upon receipt by the sender of an appropriate
answerback and (iv) if sent by facsimile transmission, upon receipt of
electronic confirmation of receipt.

SECTION 14.03.      SERVICE OF REQUIRED NOTICE TO HOLDERS; WAIVER

                  Where this Indenture provides for notice to Holders of any
event, such notice will be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder will affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver will be the equivalent of such notice. Waivers of notice by Holders
will be filed with the Trustee, but such filing will not be a condition
precedent to the validity of any action taken in reliance upon such waiver. In
case by reason of the suspension of regular mail service or by reason of any
other cause it will be impracticable to give such notice by mail, then such
notification as may be made with the approval of the Trustee will constitute a
sufficient notification for every purpose hereunder.

SECTION 14.04. INDENTURE AND  SECURITIES TO BE CONSTRUED IN ACCORDANCE WITH THE 
               LAWS OF THE STATE OF NEW YORK

                  This Indenture and the Securities will be deemed to be a
contract made under the laws of the State of New York, and for all purposes will
be construed in accordance with the laws of said State without giving effect to
principles of conflict of laws of such State.

SECTION 14.05.      COMPLIANCE CERTIFICATES AND OPINIONS

                  Upon any application or request by the Company to the Trustee
to take any action under any of the provisions of this Indenture, the Company
will furnish to the Trustee such certificates and opinions as may be required
under the Trust Indenture Act. Each such certificate or opinion will be given in
the form of an Officer's Certificate, if to be given by an officer of the
Company, or an Opinion of Counsel, if to be given by counsel, and will comply
with the requirements of the Trust Indenture Act and any other requirements set
forth in this Indenture.

SECTION 14.06.      FORM OF DOCUMENTS DELIVERED TO TRUSTEE

                  In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents. Where any
Person is required to make, give, or execute two or more applications, requests,
consents, certificates, statements, opinions, or other instruments under this
Indenture, they may, but need not, be consolidated and form one instrument.

SECTION 14.07.      PAYMENTS DUE ON NON-BUSINESS DAYS

                  In any case where any Interest Payment Date, Redemption Date,
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of the Securities of any series which
specifically states that such provision will apply in lieu of this Section
14.07)) payment of interest or principal (and premium, if any) need not be made
at such Place of Payment on such date, but may be made on the next succeeding
Business Day at such Place of Payment with the same force and effect as if made
on the Interest Payment Date or Redemption Date, or at the Stated Maturity, and
no interest shall accrue for the intervening period.

SECTION 14.08.      PROVISIONS REQUIRED BY TRUST INDENTURE ACT TO CONTROL

                  If any provision of this Indenture limits, qualifies, or
conflicts with the duties imposed on any Person by Sections 310 through 317 of
the Trust Indenture Act (including provisions automatically deemed included in
this Indenture pursuant to the Trust Indenture Act unless this Indenture
provides that such provisions are excluded), which are deemed to be a part of
and govern this Indenture, whether or not contained herein, then such imposed
duties will control.

SECTION 14.09.      INVALIDITY OF PARTICULAR PROVISIONS

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

SECTION 14.10.      INDENTURE MAY BE EXECUTED IN COUNTERPARTS

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

SECTION 14.11.      ACTS OF HOLDERS; RECORD DATES

                  (a) Any request, demand, authorization, direction, notice,
consent, waiver, or other action provided or permitted by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action will become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent will be sufficient for any
purpose of this Indenture and (subject to Section 10.01) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section
14.11.

                  (b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit will also constitute sufficient proof of
his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.

                  (c) The ownership of Securities will be proved by the Security
Register.

                  (d) Any request, demand, authorization, direction, notice,
consent, waiver, or other Act of the Holder of any Security will bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange thereof or in lieu thereof
in respect of anything done, omitted, or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.

                  (e) The Company may, in the circumstances permitted by the
Trust Indenture Act, set any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver,
or other action provided or permitted by this Indenture to be given or taken by
Holders of Securities of such series. With regard to any record date set
pursuant to this paragraph, the Holders of Outstanding Securities of the
relevant series on such record date (or their duly appointed agents), and only
such Persons, will be entitled to give or take the relevant action, whether or
not such Holders remain Holders after such record date. With regard to any
action that may be given or taken hereunder only by Holders of a requisite
principal amount of Outstanding Securities of any series (or their duly
appointed agents) and for which a record date is set pursuant to this paragraph,
the Company may, at its option, set an expiration date after which no such
action purported to be given or taken by any Holder will be effective hereunder
unless given or taken on or prior to such expiration date by Holders of the
requisite principal amount of Outstanding Securities of such series on such
record date (or their duly appointed agents). On or prior to any expiration date
set pursuant to this paragraph, the Company may, on one or more occasions at its
option, extend such date to any later date. Nothing in this paragraph will
prevent any Holder (or any duly appointed agent thereof) from giving or taking,
after any such expiration date, any action identical to, or, at any time,
contrary to or different from, the action or purported action to which such
expiration date relates, in which event the Company may set a record date in
respect thereof pursuant to this paragraph. Nothing in this Section 14.11(e)
will be construed to render ineffective any action taken at any time by the
Holders (or their duly appointed agents) of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is so
taken. Notwithstanding the foregoing or the Trust Indenture Act, the Company
will not set a record date for, and the provisions of this Section 14.11(e) will
not apply with respect to, any notice, declaration, or direction referred to in
the next paragraph.

                  (f) Upon receipt by the Trustee from any Holder of Securities
of a particular series of (a) any notice of default or breach referred to in
Section 8.01(a)(iv) or 8.01(a)(v) with respect to Securities of such series, if
such default or breach has occurred and is continuing and the Trustee shall not
have given such notice to the Company, (b) any declaration of acceleration
referred to in Section 8.01(b), if an Event of Default with respect to
Securities of such series has occurred and is continuing and the Trustee shall
not have given such a declaration to the Company, or (c) any direction referred
to in Section 8.06 with respect to Securities of such series, if the Trustee
shall not have taken the action specified in such direction, then a record date
will automatically and without any action by the Company or the Trustee be set
for determining the Holders of Outstanding Securities of such series entitled to
join in such notice, declaration, or direction, which record date will be the
close of business on the tenth calendar day following the day on which the
Trustee receives such notice, declaration, or direction. Promptly after such
receipt by the Trustee, and in any case not later than the fifth calendar day
thereafter, the Trustee will notify the Company and the Holders of Outstanding
Securities of such series of any such record date so fixed. The Holders of
Outstanding Securities of such series on such record date (or their duly
appointed agents), and only such Persons, will be entitled to join in such
notice, declaration, or direction, whether or not such Holders remain Holders
after such record date; provided that, unless such notice, declaration, or
direction shall have become effective by virtue of Holders of the requisite
principal amount of Outstanding Securities of such series on such record date
(or their duly appointed agents) having joined therein on or prior to the 90th
calendar day after such record date, such notice, declaration, or direction will
automatically and without any action by any Person be canceled and of no further
effect. Nothing in this Section 14.11(f) will be construed to prevent a Holder
(or a duly appointed agent thereof) from giving, before or after the expiration
of such 90-day period, a notice, declaration, or direction contrary to or
different from, or, after the expiration of such period, identical to, the
notice, declaration, or direction to which such record date relates, in which
event a new record date in respect thereof will be set pursuant to this Section
14.11(f). Nothing in this Section 14.11(f) will be construed to render
ineffective any notice, declaration, or direction of the type referred to in
this Section 14.11(f) given at any time to the Trustee and the Company by
Holders (or their duly appointed agents) of the requisite principal amount of
Outstanding Securities of the relevant series on the date such notice,
declaration, or direction is so given.

                  (g) Without limiting the foregoing, a Holder entitled
hereunder to give or take any action hereunder with regard to any particular
Security may do so with regard to all or any part of the principal amount of
such Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any different part of such
principal amount.

SECTION 14.12.      EFFECT OF HEADINGS AND TABLE OF CONTENTS

                  The Article and Section headings herein and the Table of
Contents are for convenience only and will not affect the construction hereof.

SECTION 14.13.      BENEFITS OF INDENTURE

                  Nothing in this Indenture or in the Securities, express or
implied, will give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy, or claim under this Indenture.

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

                  IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.

[Seal]                               MFN FINANCIAL CORPORATION


                                     By:
                                     Name:
                                     Title:



                                     NORWEST BANK MINNESOTA,
                                     NATIONAL ASSOCIATION,
                                     AS TRUSTEE


                                     By:
                                     Name:
                                     Title:


                                                                    Exhibit 4(I)





                            MFN Financial Corporation

                                       and

                  Norwest Bank Minnesota, National Association,

                                     Trustee



                       FIRST SUPPLEMENTAL TRUST INDENTURE

                           Dated as of March 23, 1999

                           Supplementing that certain


                                    INDENTURE

                           Dated as of March 23, 1999



                    Authorizing the Issuance and Delivery of

                         Senior Subordinated Securities

             consisting of $22,500,000 aggregate principal amount of

                     11% Senior Subordinated Notes Due 2002


<PAGE>


RECITALS 1
[Form of Face of Security].....................................................2

[Form of Reverse of Security]..................................................4

ARTICLE I.  ISSUANCE OF SENIOR SUBORDINATED NOTES..............................6

 Section 1.1.Issuance of Senior Subordinated Notes; Principal Amount;
             Maturity..........................................................6

 Section 1.2.Interest on the Senior Subordinated Notes; Payment of Interest....7

ARTICLE II.  CERTAIN DEFINITIONS...............................................7

 Section 2.1.Certain Definitions...............................................7

ARTICLE III.  CERTAIN COVENANTS................................................9

 Section 3.1.Indebtedness......................................................9

 Section 3.2.Restricted Payments...............................................9

ARTICLE IV.  ADDITIONAL EVENTS OF DEFAULT.....................................10

 Section 4.1.Immediate Events of Default......................................10

ARTICLE V.  REDEMPTION OF SECURITIES..........................................10

 Section 5.1.Right of Redemption..............................................10

 Section 5.2.Repurchase.......................................................10

ARTICLE VI.  MISCELLANEOUS....................................................10

 Section 6.1.Reference to and Effect on the Indenture.........................10

 Section 6.2.Waiver of Certain Covenants......................................10

 Section 6.3.Supplemental Indenture May be Executed in Counterparts...........10




<PAGE>

         FIRST SUPPLEMENTAL INDENTURE, dated as of March 23, 1999 (this "First
Supplemental Indenture"), between MFN Financial Corporation, a corporation duly
organized and existing under the laws of the State of Delaware (the "Company"),
and Norwest Bank Minnesota, National Association, a U.S. national banking
association, as Trustee (the "Trustee"), supplementing that certain Indenture,
dated as of March 23, 1999, between the Company and the Trustee (the
"Indenture").

                                    RECITALS

         A. The Company has duly authorized the execution and delivery of the
Indenture to provide for the issuance from time to time of its senior
subordinated unsecured debentures (the "Securities") to be issued in one or more
series as provided for in the Indenture.

         B. The Indenture provides that the Securities of each series shall be
in such form as may be established by or pursuant to a Board Resolution or in
one or more indentures supplemental thereto, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or as
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution thereof.

         C. The Company and the Trustee have agreed that the Company shall issue
and deliver, and the Trustee shall authenticate, Securities denominated "11%
Senior Subordinated Notes Due 2002" (the "Senior Subordinated Notes") pursuant
to the terms of this First Supplemental Indenture and substantially in the form
set forth below, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by the Indenture
and this First Supplemental Indenture, and with such letters, numbers, or other
marks of identification and such legends or endorsements placed thereon as may
be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Senior
Subordinated Notes, as evidenced by their execution thereof.



<PAGE>

                           [Form of Face of Security]

                            MFN FINANCIAL CORPORATION

                      11% SENIOR SUBORDINATED NOTE DUE 2002

No.  R-__________                                                  $0.00
                                                               CUSIP No.

         MFN FINANCIAL CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter called the "Company," which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to the Trustee, or registered
assigns, the principal sum of $0.00 on March 23, 2002, subject to earlier
redemption or repurchase as described below, and to pay interest thereon from
March 23, 1999, or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, at the rate of 11% per annum, payable
quarterly on March 23rd, June 23rd, September 23rd and December 23rd of each
year, commencing on June 23, 1999, until the principal hereof is paid or made
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date shall, as provided in said Indenture,
be computed on the basis of a 360-day year consisting of twelve 30-day months
and paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the 30th day (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 calendar days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in said Indenture.

         Payment of the principal of and any such interest on this Security
shall be made at the office or agency of the Company maintained for such purpose
in New York, New York, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest
may be made by check mailed to the address of the Person entitled thereto as
such address appears in the Security Register.

         REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS SET FORTH ON THE
REVERSE HEREOF. SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
THOUGH FULLY SET FORTH IN THIS PLACE.

         This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication herein has been signed manually by the
Trustee under said Indenture.

         THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE
DEPOSITARY OR A NOMINEE THEREOF, AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY
AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE
FOR, OR IN LIEU OF, THIS SECURITY WILL BE A GLOBAL SECURITY SUBJECT TO THE
FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.

         IN WITNESS WHEREOF, this instrument has been duly executed in
accordance with the Indenture.

                                         MFN FINANCIAL CORPORATION

                                         By:

                                         Name:

                                         Title:

Attest:

By:


<PAGE>


                          [Form of Reverse of Security]

                            MFN FINANCIAL CORPORATION


         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities") issued and to be issued in one or more
series under an Indenture, dated as of March 23, 1999 (herein called the
"Indenture"), between the Company and Norwest Bank Minnesota, National
Association, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof, limited in aggregate principal
amount to $22,500,000.

         To the extent set forth in the Indenture, each Security issued
thereunder, including this Security, is and will be subordinated in right of
payment to all existing and future Senior Debt of the Company. This Security
will rank pari passu with any existing and future senior subordinated
indebtedness of the Company and will rank senior to all other subordinated
indebtedness of the Company.

         No sinking fund is provided for the Securities. Provided that no Senior
Indebtedness of the Company is Outstanding, the Securities are subject to
redemption at the option of the Company, at any such time and from time to time,
in whole or in part, in increments of not less than $5.0 million, upon not more
than 60 nor less than 30 days' notice to the Holders prior to the Redemption
Date, at the principal amount thereof, plus accrued and unpaid interest thereon
to the date of redemption.

         If less than all of the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed will be selected by such method as
the Trustee may deem fair and appropriate. In the event of the redemption of
this Security in part only, a new Security or Securities of this series and of
like tenor for the portion hereof not so redeemed shall be issued in the name of
the Holder hereof upon the cancellation hereof.

         If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

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

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder unless (a) such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Securities of this series, (b) the Holders of not less than 25% in
principal amount of the Securities of this series at the time Outstanding shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity,
(c) the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request and (d) the Trustee shall have failed
to institute such proceeding for 60 calendar days after receipt of such notice,
request, and offer of indemnity.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium or
interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.

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

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and interest
on this Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
shall be issued to the designated transferee or transferees.

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

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

         All terms used in this Security that are defined in the Indenture shall
have the respective meanings assigned to them in the Indenture. This Security
and the Indenture shall be construed in accordance with the laws of the State of
New York without giving effect to principles of conflict of laws of such State.

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

         D. The Trustee's certificate of authentication shall be in
substantially the following form:


                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

Dated:                              ________________________, as Trustee


                                    By:
                                           Authorized Signatory

         E. All acts and things necessary to make the Senior Subordinated Notes,
when the Senior Subordinated Notes have been executed by the Company and
authenticated by the Trustee and delivered as provided in the Indenture and this
First Supplemental Indenture, the valid, binding and legal obligations of the
Company and to constitute these presents a valid indenture and agreement
according to its terms, have been done and performed, and the execution and
delivery by the Company of the Indenture and this First Supplemental Indenture
and the issue hereunder of the Senior Subordinated Notes have in all respects
been duly authorized; and the Company, in the exercise of the legal right and
power in it vested, has executed and delivered the Indenture and is executing
and delivering this First Supplemental Indenture and proposes to make, execute,
issue and deliver the Senior Subordinated Notes.

         NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:

         In order to declare the terms and conditions upon which the Senior
Subordinated Notes are authenticated, issued, and delivered, and in
consideration of the premises and of the purchase and acceptance of the Senior
Subordinated Notes by the Holders thereof, it is mutually agreed, for the equal
and proportionate benefit of the respective Holders from time to time of the
Senior Subordinated Notes, as follows:

                ARTICLE I. ISSUANCE OF SENIOR SUBORDINATED NOTES.

Section 1.1.  Issuance of Senior Subordinated Notes; Principal Amount; Maturity.

         (a) On March 23, 1999, the Company shall issue and deliver to the
Trustee, and the Trustee shall authenticate, Senior Subordinated Notes
substantially in the form set forth above, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by the Indenture and this First Supplemental Indenture, and with such
letters, numbers, or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Senior Subordinated Notes, as evidenced by their
execution thereof.

         (b) The Senior Subordinated Notes shall be issued in the aggregate
principal amount of up to $22,500,000.00 and shall mature on March 23, 2002.

Section 1.2.     Interest on the Senior Subordinated Notes; Payment of Interest.

         (a) The Senior Subordinated Notes shall bear interest at the rate of
11% per annum from March 23, 1999, or, if later, from the most recent Interest
Payment Date to which interest has been paid or duly provided for.

         (b) The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date shall, as provided in the Indenture, be paid to the
Person in whose name a Senior Subordinated Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the 30th day (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name the Senior Subordinated Note (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of the Senior Subordinated Notes not less than
10 calendar days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Senior Subordinated Notes may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in the
Indenture.

         (c) Payment of the principal of and any such interest on the Senior
Subordinated Notes shall be made at the office or agency of the Company
maintained for such purpose in New York, New York, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address appears in the Security Register].

                        ARTICLE II. CERTAIN DEFINITIONS.

Section 2.1.      Certain Definitions.

         The terms defined in this Section 2.1 (except as herein otherwise
expressly provided or unless the context of this First Supplemental Indenture
otherwise requires) for all purposes of this First Supplemental Indenture and of
any indenture supplemental hereto have the respective meanings specified in this
Section 2.1. All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP. All other terms used in this First
Supplemental Indenture that are defined in the Indenture or the Trust Indenture
Act, either directly or by reference therein (except as herein otherwise
expressly provided or unless the context of this First Supplemental Indenture
otherwise requires), have the respective meanings assigned to such terms in the
Indenture or the Trust Indenture Act, as the case may be, as in force at the
date of this First Supplemental Indenture as originally executed.

         "Affiliate" has the meaning ascribed thereto in Section 3.8.

         "Effective Date" means March 23, 1999.

         "Leverage Ratio" means, at any date of determination, the ratio of the
sum of the Indebtedness and the net worth of the Company and its Subsidiaries to
the Indebtedness of the Company and its Subsidiaries, in each case calculated on
a consolidated basis in accordance with GAAP.

         "Permitted Indebtedness" means, without duplication: (a) the Series A
Senior Secured Notes and the Series B Senior Secured Notes; (b) Indebtedness
under one or more Working Capital Facilities; (c) Indebtedness between or among
the Company and its wholly owned Subsidiaries; (d) to the extent deemed to be
"Indebtedness," obligations under swap agreements, cap agreements, collar
agreements, insurance arrangements, or any similar agreement or arrangement, in
each case designed to provide a bona fide hedge against fluctuations in interest
rates, the cost of currency, or the cost of goods (other than inventory); (e)
other Indebtedness of the Company or its Subsidiaries in outstanding amounts not
to exceed $10 million in the aggregate at any particular time; (f) liabilities
(other than for or in connection with borrowed money) incurred in the operation
of the Finance Business in the ordinary course thereof and not more than six
months overdue, unless contested in good faith by appropriate proceedings; (g)
Indebtedness evidenced by letters of credit that are issued in the ordinary
course of the business of the Company and its Subsidiaries to secure workers'
compensation and other insurance coverages; (h) deferred taxes and other
deferred obligations incurred in the ordinary course of business and not
evidenced by notes, bonds, debentures or other evidences of indebtedness; and
(i) Indebtedness incurred in connection with any extension, renewal,
refinancing, replacement, or refunding (including successive extensions,
renewals, refinancings, replacements, or refundings), in whole or in part, of
any Indebtedness of the Company or its Subsidiaries; provided, however, that the
principal amount of the Indebtedness so incurred does not exceed the sum of the
principal amount of the Indebtedness so extended, renewed, refinanced, replaced,
or refunded, plus all interest accrued thereon and all related fees and
expenses.

         "Plan" means the Plan of Reorganization of Mercury Finance Company
confirmed by the United States Bankruptcy Court for the Northern District of
Illinois pursuant to an order dated March 10, 1999.

         "Restricted Payments" has the meaning ascribed thereto in Section 3.2.

         "Senior Subordinated Notes" means the Company's 11% Senior Subordinated
Notes Due 2002 issued pursuant to this First Supplemental Indenture.

         "Subordinated Indebtedness" means any Indebtedness of the Company which
is expressly subordinated in right of payment to the senior secured notes issued
under the Senior Secured Notes Indenture.

         "Uniform Commercial Code" means the New York Uniform Commercial Code as
amended or modified from time to time.

                         ARTICLE III. CERTAIN COVENANTS.

Section 3.1.      Indebtedness.

         The Company shall not, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become liable with respect to, any Indebtedness
other than Permitted Indebtedness if immediately after incurring such
Indebtedness other than Permitted Indebtedness, the Company's Leverage Ratio,
calculated on a pro forma basis, would be equal to or greater than 3.00:1.00.

Section 3.2.      Restricted Payments.

         The Company shall not (a) declare or pay any dividend on, or make any
other distribution on account of, the Company's capital stock or (b) purchase,
redeem or otherwise acquire or retire for value any capital stock (including any
option, warrant or right to purchase capital stock) of the Company owned
beneficially by a Person other than a wholly owned Subsidiary of the Company
(all such dividends, distributions, purchases or redemptions being collectively
referred to as "Restricted Payments"). Notwithstanding anything in the foregoing
to the contrary, the Company may take the actions described above if, at the
time of such action or after giving effect thereto: (i) no Event of Default
shall have occurred and is continuing; (ii) the Company could incur at least
$1.00 of Indebtedness (other than Permitted Indebtedness) under Section 3.1; or
(iii) the cumulative amount of Restricted Payments made subsequent to the
Effective Date shall not be greater than the sum of: (A) 50% of the Company's
cumulative consolidated net income (or a negative amount equal to 100% of the
Company's cumulative consolidated net loss, if applicable) from the Effective
Date through the end of the Company's fiscal quarter immediately preceding the
taking of such action; and (B) 100% of the aggregate net cash proceeds received
by the Company from the issue or sale of capital stock of the Company (other
than redeemable capital stock), including capital stock issued upon the
conversion of convertible Indebtedness issued on or after the Effective Date, in
exchange for outstanding Indebtedness, or from the exercise of options,
warrants, or rights to purchase capital stock of the Company to any Person other
than to a Subsidiary of the Company subsequent to the Effective Date (with the
Company being deemed, in the case of capital stock issued upon conversion or in
exchange for Indebtedness, to have received net cash proceeds equal to the
principal amount of the Indebtedness so converted or exchanged); provided,
however, that (1) the payment of any dividend within 60 calendar days after the
date of declaration thereof, if such declaration complied with the foregoing
redemption or other acquisition provisions on the date of such declaration, (2)
the purchase, redemption, or other acquisition or retirement for value of any
shares of capital stock of the Company in exchange for, or out of the proceeds
of, a substantially concurrent issue and sale (other than to a Subsidiary of the
Company) of other shares of capital stock (other than redeemable capital stock)
of the Company, and (3) any purchase, redemption or other acquisition or
retirement for value of any capital stock (including any option, warrant, or
right to purchase capital stock) of the Company issued to any employee or
director of the Company pursuant to any employee benefit or similar plan shall
not be deemed to constitute "Restricted Payments" and shall not be prohibited
under this Section.

                    ARTICLE IV. ADDITIONAL EVENTS OF DEFAULT.

Section 4.1.      Immediate Events of Default

         Notwithstanding anything in Section 9.01 of the Indenture to the
contrary, if the Company defaults in the performance of, or breaches any,
covenant set forth in Article III of this First Supplemental Indenture or in
Section 6.05 of the Indenture, such default or breach shall immediately
constitute an Event of Default, without giving effect to any passage of time or
notice or both.

                      ARTICLE V. REDEMPTION OF SECURITIES.

Section 5.1.      Right of Redemption.

         The Senior Subordinated Notes may be redeemed in accordance with the
provisions of the form thereof set forth herein.

Section 5.2.      Repurchase.

         Provided that no Senior Indebtedness of the Company is Outstanding, the
Company may at any such time and from time to time purchase Senior Subordinated
Notes in the open market or otherwise at any price, and any Senior Subordinated
Notes so purchased shall be promptly surrendered to the Trustee for cancellation
and shall not be reissued.

                           ARTICLE VI. MISCELLANEOUS.

Section 6.1.      Reference to and Effect on the Indenture.

         This First Supplemental Indenture shall be construed as supplemental to
the Indenture and all the terms and conditions of this First Supplemental
Indenture shall be deemed to be part of the terms and conditions of the
Indenture. Except as set forth herein, the Indenture heretofore executed and
delivered is hereby (i) incorporated by reference in this First Supplemental
Indenture and (ii) ratified, approved and confirmed.

Section 6.2.      Waiver of Certain Covenants.

         The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Article III hereof if the Holders of a
majority in principal amount of the Outstanding Senior Subordinated Notes shall,
by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.

Section 6.3.      Supplemental Indenture May be Executed in Counterparts.

         This instrument 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.

<PAGE>


                  IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.

[Seal]                                      MFN FINANCIAL CORPORATION

                                            By:
                                            Name:
                                            Title:



                                            NORWEST BANK MINNESOTA, NATIONAL
                                            ASSOCIATION, as Trustee

                                            By:
                                            Name:
                                            Title:


                                                                    Exhibit 4(J)





                                WARRANT AGREEMENT

                                     between

                            MFN FINANCIAL CORPORATION

                                       and

                          HARRIS TRUST AND SAVINGS BANK

                                as Warrant Agent

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



                           Dated as of March 23, 1999








<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

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

Section 2.    Form of Warrant; Execution; Registration.........................3

         2.1  Form of Warrant; Execution of Warrants...........................3

         2.2  Registration.....................................................3

         2.3  Countersignature of Warrants.....................................3

Section 3.    Transfer and Exchange of Warrants................................4

Section 4.    Term of Warrants; Exercise of Warrants; Compliance with
              Government Regulation............................................4

         4.1  Term of Warrants.................................................4

         4.2  Exercise of Warrants.............................................5

         4.3  Compliance with Government Regulations; Qualification under
              Securities Laws..................................................6

Section 5.    Payment of Taxes.................................................6

Section 6.    Mutilated or Missing Warrant Certificates........................7

Section 7.    Reservation of Warrant Shares....................................7

Section 8.    Stock Exchange Listings..........................................7

Section 9.    Adjustment of Exercise Price, Number of Warrant Shares and
              Shares of Capital Stock Warrants Are Exercisable Into............8

         9.1  Mechanical Adjustments...........................................8

              (a)      Adjustment for Change in Capital Stock..................8

              (b)      Adjustment for Rights Issue.............................8

              (c)      Adjustment for Other Distributions......................9

              (d)      Adjustment for Common Stock and Convertible Securities
                       Issue...................................................9

              (e)      Current Market Price; Price Per Share..................10

              (f)      When De Minimis Adjustment May Be Deferred.............12

              (g)      Adjustment in Exercise Price...........................12

              (h)      When No Adjustment Required............................12

              (i)      Capitalization, Reclassification or Consolidation......13

              (j)      Shares of Common Stock.................................13

              (k)      Expiration of Rights, etc..............................13

         9.2  Voluntary Adjustment by the Company.............................14

         9.3  Notice of Adjustment............................................14

         9.4  Preservation of Purchase Rights upon Merger or Consolidation....15

         9.5  Statement on Warrants...........................................15

Section 10.   Fractional Interests............................................15

Section 11.   No Rights as Stockholders; Notices to Holders...................15

Section 12.   Payments in U.S. Currency.......................................16

Section 13.   Merger or Consolidation or Change of Name of Warrant Agent......16

Section 14.   Appointment of Warrant Agent....................................17

         14.1 Concerning the Warrant Agent....................................17

         14.2 Correctness of Statements.......................................17

         14.3 Breach of Covenants.............................................17

         14.4 Performance of Duties...........................................17

         14.5 Reliance on Counsel.............................................17

         14.6 Proof of Actions Taken..........................................18

         14.7 Compensation and Indemnification................................18

         14.8 Legal Proceedings...............................................18

         14.9 Other Transactions in Securities of Company.....................18

         14.10Liability of Warrant Agent......................................19

         14.11Reliance on Documents...........................................19

         14.12Validity of Agreement...........................................19

         14.13Instructions from Company.......................................19

Section 15.   Change of Warrant Agent.........................................19

Section 16.   Notices.........................................................20

Section 17.   Cancellation of Warrants........................................20

Section 18.   Supplements and Amendments......................................20

Section 19.   Successors......................................................21

Section 20.   Applicable Law..................................................21

Section 21.   Benefits of this Agreement......................................21

Section 22.   Counterparts....................................................21

Section 23.   Captions........................................................21



<PAGE>

         WARRANT AGREEMENT, dated as of March 23, 1999, between MFN Financial
Corporation, a Delaware corporation (the "Company"), and Harris Trust and
Savings Bank, as Warrant Agent (together with any successors and assigns, the
"Warrant Agent").

                              W I T N E S S E T H :

         WHEREAS, the Company was a Debtor and Debtor-in-Possession in the case
(the "Chapter 11 Case") filed in the United States Bankruptcy Court for the
Northern District of Illinois, Eastern Division (the "Bankruptcy Court"),
entitled "In re Mercury Finance Company, Debtor," Chapter 11 Case No. 98 B
20763, under the Bankruptcy Code;

         WHEREAS, in connection with and as part of the transactions to be
consummated pursuant to the confirmation of a Plan of Reorganization (as
amended, modified or supplemented from time to time) of the Company in the
Chapter 11 Case (the "Plan"), the Company has agreed to issue three series of
Warrants (the "Series A Warrants", the "Series B Warrants" and the "Series C
Warrants" and collectively, the "Warrants") with each series of Warrants
exercisable for the purchase of 580,000 shares of Common Stock of the Company.

         WHEREAS, by Order dated March 10, 1999, the Bankruptcy Court confirmed
the Plan;

         WHEREAS, the Plan contemplates that the Company will enter into certain
agreements, including, without limitation, this Warrant Agreement;

         WHEREAS, the Company desires to issue the Warrants, each of which
entitles the holder thereof to purchase one share of its Common Stock (each of
said shares of Common Stock deliverable upon exercise of the Warrants, a
"Warrant Share"); and

         WHEREAS, the Company wishes the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act in connection with the
issuance, division, transfer, exchange and exercise of Warrants.

         NOW, THEREFORE, in consideration of the foregoing, to implement the
terms of the Plan, and for the purpose of defining the terms and provisions of
the Warrants and the respective rights and obligations thereunder of the Company
and the registered owners of the Warrants (the "Holders") and any security into
which they may be exchanged, the Company and the Warrant Agent hereby agree as
follows:

         Section 1. Definitions. The following terms, as used herein, have the
following meanings (all terms defined in the singular to have the correlative
meanings when used in the plural and vice versa):

         "Agreement" means this Warrant Agreement, as the same may be amended,
modified or supplemented from time to time.

         "Assets" has the meaning ascribed to such term in Section 9.1(c)
hereof.

         "Business Day" means a day other than (a) a Saturday or Sunday, (b) any
day on which banking institutions located in the City of New York, New York or
Chicago, Illinois are required or authorized by law or by local proclamation to
close, or (c) any day on which the New York Stock Exchange is closed.

         "Commercially Reasonable Efforts", when used with respect to any
obligation to be performed or term or provision to be observed hereunder, means
such efforts as a prudent Person seeking the benefits of such performance or
action would make, use, apply or exercise to preserve, protect or advance its
rights or interests, provided that such efforts do not require such Person to
incur a material financial cost or a substantial risk of material liability
unless such cost or liability (i) would customarily be incurred in the course of
performance or observance of the relevant obligation, term or provision, (ii) is
caused by or results from the wrongful act or negligence of the Person whose
performance or observance is required hereunder, or (iii) is not excessive or
unreasonable in view of the rights or interests to be preserved, protected or
advanced. Such efforts may include, without limitation, the expenditure of such
funds and retention by such Person of such accountants, attorneys or other
experts or advisors as may be necessary or appropriate to effect the relevant
action; the undertaking of any special audit or internal investigation that may
be necessary or appropriate to effect the relevant action; and the commencement,
termination or settlement of any action, suit or proceeding involving such
Person to the extent necessary or appropriate to effect the relevant action.

         "Common Stock" means the common stock, par value $0.01, of the Company
after the Effective Date (as defined in the Plan).

         "Convertible Securities" has the meaning ascribed to such term in
Section 9.1(d) hereof.

         "Exercise Period" has the meaning ascribed to such term in Section 4.1
hereof.

         "Exercise Price" means (i) $15.34 per share for the Series A Warrants,
(ii) $21.81 per share for the Series B Warrants, and (iii) $28.27 per share for
the Series C Warrants, as adjusted pursuant to Section 9 hereof.

         "Holder" has the meaning ascribed to such term in the preamble hereto.

         "NASD" has the meaning ascribed to such term in Section 4.2 hereof.

         "Person" means a natural person, a corporation, a partnership, a trust,
a joint venture, any regulatory authority or any other entity or organization.

         "Plan" has the meaning ascribed to such term in the preamble hereto.

         "Price Per Share" has the meaning ascribed to such term in Section
9.1(e)(ii) hereof.

         "Rights" has the meaning ascribed to such term in Section 9.1(b)
hereof.

         "Transfer Agent" has the meaning ascribed to such term in Section 7
hereof.

         "SEC" means the United States Securities and Exchange Commission, or
any successor governmental agency or authority thereto.

         "Series A Warrants" has the meaning ascribed to such term in the
preamble hereto.

         "Series B Warrants" has the meaning ascribed to such term in the
preamble hereto.

         "Series C Warrants" has the meaning ascribed to such term in the
preamble hereto.

         "Subsidiary" has the meaning ascribed to such term in Section 9.1(c)
hereof.

         "Warrant" has the meaning ascribed to such term in the preamble hereto.

         "Warrant Certificate" has the meaning ascribed to such term in Section
2.1 hereof.

         "Warrant Register" has the meaning ascribed to such term in Section 2.2
hereof.

         "Warrant Share" has the meaning ascribed to such term in the preamble
hereto.

         Section 2. Form of Warrant; Execution; Registration.

         2.1 Form of Warrant; Execution of Warrants. The certificates evidencing
the Warrants (the "Warrant Certificates") shall be in registered form only and
shall be in the form set forth as Exhibit A hereto. The Warrant Certificates
shall be signed on behalf of the Company by its Chairman of the Board,
President, Chief Executive Officer or one of its Vice Presidents. The signature
of any such officer on the Warrant Certificates may be manual or by facsimile.
Any Warrant Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Warrant Certificate, shall be a
proper officer of the Company to sign such Warrant Certificate. Each Warrant
Certificate shall be dated the date it is countersigned by the Warrant Agent
pursuant to Section 2.3 hereof.

         2.2 Registration. The Warrant Certificates shall be numbered and shall
be registered on the books of the Company maintained at the principal office of
the Warrant Agent initially in Chicago, Illinois (or such other place in the
continental United States as the Warrant Agent shall from time to time notify
the Company and the Holders in writing) (the "Warrant Register") as they are
issued. The Company and the Warrant Agent shall be entitled to treat the
registered owner of any Warrant as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Warrant on the part of any other person.

         2.3 Countersignature of Warrants. The Warrant Certificates shall be
countersigned by the Warrant Agent and shall not be valid for any purpose unless
so countersigned. Warrant Certificates may be countersigned, however, by the
Warrant Agent and may be delivered by the Warrant Agent notwithstanding that the
persons whose manual or facsimile signatures appear thereon as proper officers
of the Company shall have ceased to be such officers at the time of such
countersignature, issuance or delivery. The Warrant Agent shall, upon written
instructions of the Chairman of the Board, the President, the Chief Executive
Officer, any Vice President, the Treasurer or the Secretary of the Company,
countersign, issue and deliver Warrant Certificates entitling the Holders
thereof to purchase not more than an aggregate of 1,740,000 Warrant Shares
(subject to adjustment pursuant to Section 9 hereof) and shall countersign,
issue and deliver Warrant Certificates as otherwise provided in this Agreement.

         Section 3. Transfer and Exchange of Warrants. Subject to the terms
hereof, the Warrant Agent shall initially countersign, register in the Warrant
Register and deliver Warrants hereunder in accordance with the written
instructions of the Company. Subject to the terms hereof and the receipt of such
documentation as the Warrant Agent may reasonably require, the Warrant Agent
shall thereafter from time to time register the transfer of any outstanding
Warrants upon the Warrant Register upon surrender of the Warrant Certificate or
Certificates evidencing such Warrants duly endorsed or accompanied (if so
required by it) by a written instrument or instruments of transfer in form
reasonably satisfactory to the Warrant Agent, duly executed by the registered
Holder or Holders thereof or by the duly appointed legal representative thereof
or by a duly authorized attorney. Subject to the terms of this Agreement, each
Warrant Certificate may be exchanged for another Warrant Certificate or
Certificates entitling the Holder thereof to purchase a like aggregate number of
Warrant Shares, at the same exercise price and having the same term, as the
surrendered Warrant Certificate or Certificates then entitles such Holder to
purchase. Any Holder desiring to exchange a Warrant Certificate or Certificates
shall make such request in writing delivered to the Warrant Agent, and shall
surrender, duly endorsed or accompanied (if so required by the Warrant Agent) by
a written instrument or instruments of transfer in form reasonably satisfactory
to the Warrant Agent, the Warrant Certificate or Certificates to be so
exchanged. Upon registration of transfer, the Company shall issue and the
Warrant Agent shall countersign and deliver by certified mail a new Warrant
Certificate or Certificates to the persons entitled thereto. Upon any partial
transfer, a new Warrant Certificate of like tenor and representing in the
aggregate the number of warrants which were not so transferred, shall be issued
to, and in the name of, the holder.

         No service charge shall be made for any exchange or registration of
transfer of a Warrant Certificate or of Warrant Certificates, but the Company
may require payment of a sum sufficient to cover any stamp tax or other tax or
other governmental charge that is imposed in connection with any such exchange
or registration of transfer pursuant to Section 5 hereof.

         By accepting the initial delivery, transfer or exchange of Warrants,
each Holder shall be deemed to agree to the terms of this Agreement as it may be
in effect from time to time, including any amendments or supplements duly
adopted in accordance with Section 18 hereof.

         Section 4. Term of Warrants; Exercise of Warrants; Compliance with
Government Regulation.

         4.1 Term of Warrants. Subject to the terms of this Agreement, each
Holder shall have the right, until the expiration of the applicable Exercise
Period for the Warrants held, to receive from the Company the number of Warrant
Shares which the Holder may at the time be entitled to receive upon exercise of
such Warrants and payment of the Exercise Price then in effect for such Warrant
Shares, and the Warrant Shares issued to a Holder upon exercise of its Warrants
shall be duly authorized, validly issued, fully paid, nonassessable and shall
not have been issued in violation of or subject to any preemptive rights. Each
Warrant not exercised prior to the expiration of its Exercise Period shall
become void, and all rights thereunder and all rights in respect thereof under
this Agreement shall cease as of the expiration of such Exercise Period. The
Exercise Period for the Warrants shall begin at 9:00 a.m., New York City time,
on the date of their issuance, and end at 5:00 p.m., New York City time, on (a)
March 23, 2002 (three years after the Effective Date (as defined in the Plan))
for the Series A Warrants, (b) March 23, 2003 (four years after the Effective
Date) for the Series B Warrants, and (c) March 23, 2004 (five years after the
Effective Date) for the Series C Warrants.

         4.2 Exercise of Warrants. During the Exercise Period, each Holder may,
subject to this Agreement, exercise from time to time some or all of the
Warrants evidenced by its Warrant Certificate(s) by (i) surrendering to the
Company at the principal office of the Warrant Agent such Warrant Certificate(s)
with the form of election to purchase on the reverse thereof duly filled in and
signed which signature shall be guaranteed by a bank or trust company having an
office or correspondent in the United States or a broker or dealer which is a
member of a registered securities exchange or the National Association of
Securities Dealers, Inc. (the "NASD"), or , to the extent held in "street" name,
Holder shall comply with applicable law, and (ii) paying to the Warrant Agent
for the account of the Company the aggregate Exercise Price for the number of
Warrant Shares in respect of which such Warrants are exercised. Warrants shall
be deemed exercised on the date such Warrant Certificate(s) are surrendered to
the Warrant Agent and tender of payment of the aggregate Exercise Price is made.
Payment of the aggregate Exercise Price shall be made in cash by wire transfer
of immediately available funds to the Warrant Agent for the account of the
Company or by certified or official bank check or checks to the order of the
Company or by any combination thereof.

         Upon the exercise of any Warrants in accordance with this Agreement,
the Company shall issue and cause to be delivered with all reasonable dispatch,
to or upon the written order of the Holder and in such name or names as the
Holder may designate, a certificate or certificates for the number of full
Warrant Shares issuable upon the exercise of such Warrants and shall take such
other actions at its sole expense as are necessary to complete the exercise of
such Warrants (including, without limitation, payment of any cash with respect
to fractional interests required under Section 10 hereof). The Warrant Agent
shall have no responsibility or liability for such issuance or the determination
of the number of Warrant Shares issuable upon such exercise. The certificate or
certificates representing such Warrant Shares shall have been issued and any
person so designated to be named therein shall be deemed to have become a holder
of record of such Warrant Shares as of the date such Warrants are exercised
hereunder. Each Warrant Share, when issued upon exercise of the Warrants, shall
be duly authorized, validly issued, fully paid and non-assessable and will not
have been issued in violation of or subject to any preemptive rights.

         In the event that less than all of the Warrants evidenced by a Warrant
Certificate are exercised, the Holder thereof shall be entitled to receive a new
Warrant Certificate or Certificates as specified by such Holder evidencing the
remaining Warrant or Warrants, and the Warrant Agent is hereby irrevocably
authorized by the Company to countersign, issue and deliver the required new
Warrant Certificate or Certificates evidencing such remaining Warrant or
Warrants pursuant to the provisions of this Section 4.2 hereof and of Section 3
hereof. The Company, whenever required by the Warrant Agent, will supply the
Warrant Agent with Warrant Certificates duly executed on behalf to the Company
for such purpose.

         Upon delivery of the Warrant Shares issuable upon exercise in
accordance herewith and of any required new Warrant Certificates, the Company
shall direct the Warrant Agent by written order to cancel the Warrant
Certificates surrendered upon exercise. Such canceled Warrant Certificates shall
then be disposed of by the Warrant Agent in a manner permitted by applicable
laws and satisfactory to the Company in accordance with its written instructions
to the Warrant Agent. The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay to the Company all
amounts received by the Warrant Agent upon exercise of such Warrants.

         The Warrant Agent shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by the Holders during
normal business hours at its office. The Company shall at its sole expense
supply the Warrant Agent from time to time with such numbers of copies of this
Agreement as the Warrant Agent may reasonably request.

         4.3 Compliance with Government Regulations; Qualification under
Securities Laws. The Company is issuing the Warrants based upon the belief that
the issuance and the exercise of the Warrants, and the issuance of the Common
Stock upon exercise of the Warrants, are exempt from registration under the
Federal securities laws pursuant to Section 1145 of the Bankruptcy Code. The
Company covenants that if following a due demand to exercise warrants any shares
of Common Stock required to be reserved for purposes of exercise of such
Warrants require, under any federal or state law, registration with or approval
of any governmental authority before such shares may be issued upon exercise
and/or subsequently transferred, and the Holder requesting the exercise of a
Warrant provides an opinion of counsel acceptable to the Company to the effect
that the exercise of the Warrant and/or the transfer of the underlying Common
Stock require registration, then, the Company will, unless the Company has
received an opinion of counsel to the effect that such registration is not then
required by such laws, use its Commercially Reasonable Efforts to cause such
shares to be duly so registered or approved, as the case may be; provided that
in no event shall such shares of Common Stock be issued, and the exercise of all
such Warrants shall be suspended, for the period from the date of such due
demand for exercise until such registration or approval is in effect; provided,
further, that the Exercise Period for such Warrants (but only such Warrants)
shall be extended one day for each day (or portion thereof) that any such
suspension is in effect. The Company shall promptly notify the Warrant Agent of
any such suspension, and the Warrant Agent shall have no duty, responsibility or
liability in respect of any shares of Common Stock issued or delivered prior to
its receipt of such notice. The Company shall promptly notify the Warrant Agent
of the termination of any such suspension, and such notice shall set forth the
number of days that the Exercise Period with respect to such Warrants shall be
extended as a result of such suspension.

         Section 5. Payment of Taxes. The Company will pay all documentary stamp
and other like taxes, if any, attributable to the initial issuance and delivery
of the Warrants and the initial issuance and delivery of the Warrant Shares upon
the exercise of Warrants, provided, that the Company shall not be required to
pay any tax or taxes which may be payable in respect of any transfer of the
Warrants or involved in the issuance or delivery of any Warrant Shares in a name
other than that of the Holder of the Warrants being exercised, and the Warrant
Agent shall not register any such transfer or issue or deliver any Warrant
Certificate(s) or Warrant Shares unless or until the persons requesting the
registration or issuance shall have paid to the Warrant Agent for the account of
the Company the amount of such tax, if any, or shall have established to the
reasonable satisfaction of the Company that such tax, if any, has been paid.

         Section 6. Mutilated or Missing Warrant Certificates. In the event that
any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the
Company shall issue, and at the direction of the Company by written order the
Warrant Agent shall countersign and deliver in exchange and substitution for and
upon cancellation of the mutilated Warrant Certificate or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent right or
interest, but only upon receipt of evidence reasonably satisfactory to the
Company and the Warrant Agent of such loss, theft or destruction of such Warrant
Certificate and an indemnity or bond, if requested by the Company or the Warrant
Agent, also reasonably satisfactory to them. An applicant for such a substitute
Warrant Certificate shall also comply with such other reasonable procedures as
the Company or the Warrant Agent may reasonably require.

         Section 7. Reservation of Warrant Shares. There have been reserved, and
the Company shall at all times keep reserved, out of its authorized Common
Stock, free of all preemptive rights, a number of shares of Common Stock
sufficient to provide for the exercise of the rights of purchase represented by
the outstanding Warrants. The transfer agent for the Common Stock and every
subsequent or other transfer agent for any shares of the Company's capital stock
issuable upon the exercise of the Warrants (each, a "Transfer Agent") will be
and are hereby irrevocably authorized and directed at all times to reserve such
number of authorized shares as shall be required for such purpose. The Company
will keep a copy of this Agreement on file with each Transfer Agent. The Warrant
Agent is hereby irrevocably authorized to requisition from time to time from the
Company or a Transfer Agent, as the case may be, the certificates for Warrant
Shares required to honor outstanding Warrants upon exercise thereof in
accordance with the terms of this Agreement. The Company will supply its
Transfer Agents with duly executed stock certificates for such purposes and will
itself provide or otherwise make available any cash which may be payable as
provided in Section 10 hereof. The Company will furnish to its Transfer Agents a
copy of all notices of adjustments and certificates related thereto, transmitted
to each Holder pursuant to Section 9.3 hereof. The Company will give the Warrant
Agent prompt notice of any change in any Transfer Agent or any change of address
of any Transfer Agent.

         Before taking any action which would cause an adjustment pursuant to
Section 9 reducing the Exercise Price, the Company will take any and all
corporate action which may be necessary in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares at the Exercise
Price as so adjusted.

         Section 8. Stock Exchange Listings. The Company shall use its
Commercially Reasonable Efforts (including requests for waivers) to have each
series of the Warrants included for quotation in The Nasdaq National Market or
the Nasdaq Small Cap Market or listed on the American Stock Exchange, and shall
use its Commercially Reasonable Efforts to maintain such listing or inclusion.
In the event the Warrants do not qualify for such listing or inclusion, the
Company will use its Commercially Reasonable Efforts (including, requests for
waivers) to effect such inclusion or listing whenever the Warrants qualify
therefor, and prior to such time, shall use Commercially Reasonable Efforts to
cause some other customary trading market to admit the warrants for trading. Any
such listing and inclusion shall be at the Company's sole expense.

         Section 9. Adjustment of Exercise Price, Number of Warrant Shares and
Shares of Capital Stock Warrants Are Exercisable Into. The number and kind of
securities purchasable upon the exercise of each Warrant, and the Exercise
Price, shall be subject to adjustment from time to time upon the happening of
certain events, as hereinafter described. The Warrant Agent shall be fully
protected in relying on the certificate described in Section 9.3 below regarding
the adjustment and on any adjustment therein contained, and shall not be
obligated or responsible for calculating any adjustment, nor shall it be deemed
to have knowledge of such an adjustment unless and until it shall have received
such certificate.

         9.1 Mechanical Adjustments. The number of Warrant Shares purchasable
upon the exercise of each Warrant and the Exercise Price shall be subject to
adjustment as follows:

         (a) Adjustment for Change in Capital Stock. Subject to paragraphs
     (f) and (h) below, in case the Company shall (i) pay a dividend on its
     outstanding shares of Common Stock in shares of Common Stock or make a
     distribution of shares of Common Stock on its outstanding shares of
     Common Stock, (ii) make a distribution on its outstanding shares of
     Common Stock in shares of its capital stock other than Common Stock,
     (iii) subdivide its outstanding shares of Common Stock into a greater
     number of shares of Common Stock, (iv) combine its outstanding shares
     of Common Stock into a smaller number of shares of Common Stock, or
     (v) issue, by reclassification of its shares of Common Stock, other
     securities of the Company (including any such reclassification in
     connection with a consolidation or merger in which the Company is the
     surviving entity), then the number of Warrant Shares purchasable upon
     exercise of each Warrant immediately prior thereto shall be adjusted
     so that the Holder of each Warrant shall be entitled to receive upon
     the exercise of the Warrant the kind and number of Warrant Shares or
     other securities of the Company which such Holder would have owned or
     have been entitled to receive upon the happening of any of the events
     described above had such Warrant been exercised in full immediately
     prior to the happening of such event or any record date with respect
     thereto. If a Holder is entitled to receive shares of two or more
     classes of capital stock of the Company pursuant to the foregoing upon
     exercise of Warrants, the allocation of the adjusted Exercise Price
     between such classes of capital stock shall be determined reasonably
     and in good faith by the Board of Directors of the Company. After such
     allocation, the exercise privilege and the Exercise Price with respect
     to each class of capital stock shall thereafter be subject to
     adjustment on terms substantially identical to those applicable to
     Common Stock in this Section 9. An adjustment made pursuant to this
     paragraph (a) shall become effective immediately after the record date
     for such event or, if none, immediately after the effective date of
     such event. Such adjustment shall be made successively whenever such
     an event occurs.

         (b) Adjustment for Rights Issue. Subject to paragraphs (f) and (h)
     below, in case the Company shall issue rights, options or warrants
     (collectively, "Rights") to all holders of its outstanding Common
     Stock entitling them to subscribe for or purchase shares of Common
     Stock at a Price Per Share (as defined in paragraph (e) below) which
     is lower at the record date mentioned below than the Current Market
     Price (as defined in paragraph (e) below) per share of Common Stock on
     such record date, then the number of Warrant Shares thereafter
     purchasable upon the exercise of each Warrant shall be determined by
     multiplying the number of Warrant Shares theretofore purchasable upon
     exercise of each Warrant by a fraction, the numerator of which shall
     be the number of shares of Common Stock outstanding on the date of
     issuance of such Rights plus the additional Number of Shares (as
     defined in paragraph (e) below) of Common Stock offered for
     subscription or purchase in connection with such Rights and the
     denominator of which shall be the number of shares of Common Stock
     outstanding on the date of issuance of such Rights plus the number of
     shares of Common Stock which the aggregate Proceeds (as defined in
     paragraph (e) below) received or receivable by the Company upon
     exercise of such Rights would purchase at the Current Market Price per
     share of Common Stock at such record date. Such adjustment shall be
     made whenever Rights are issued, and shall become effective
     immediately after the record date for the determination of
     stockholders entitled to receive Rights.

         (c) Adjustment for Other Distributions. Subject to paragraphs (f)
     and (h) below, in case the Company shall distribute to all holders of
     its shares of Common Stock (x) evidences of indebtedness or assets
     (excluding cash dividends or distributions payable out of the
     consolidated earnings or surplus legally available for such dividends
     or distributions and dividends or distributions referred to in
     paragraphs (a) or (b) above) of the Company or any corporation or
     other legal entity a majority of the voting equity or equity interests
     of which are owned, directly or indirectly, by the Company (a
     "Subsidiary"), or (y) shares of capital stock of a Subsidiary (such
     evidences of indebtedness, assets and securities as set forth in
     clauses (x) and (y) above, collectively, "Assets"), then in each case
     the number of Warrant Shares thereafter purchasable upon the exercise
     of each Warrant shall be determined by multiplying the number of
     Warrant Shares theretofore purchasable upon the exercise of each
     Warrant by a fraction, the numerator of which shall be the Current
     Market Price per share of Common Stock on the date of such
     distribution and the denominator of which shall be such Current Market
     Price per share of Common Stock less the fair value as of such record
     date as determined reasonably and in good faith by the Board of
     Directors of the Company of the portion of the Assets applicable to
     one share of Common Stock. Such adjustment shall be made whenever any
     such distribution is made, and shall become effective on the date of
     distribution retroactive to the record date for the determination of
     stockholders entitled to receive such distribution.

         (d) Adjustment for Common Stock and Convertible Securities Issue.
     Subject to paragraphs (f) and (h) below, in case the Company shall
     issue shares of its Common Stock, or securities convertible into, or
     exchangeable or exercisable for Common Stock or Rights to subscribe
     for or purchase such securities (collectively, "Convertible
     Securities") (excluding the issuance of (i) Common Stock or
     Convertible Securities issued in any of the transactions described in
     paragraphs (a), (b) or (c) above or (ii) Warrant Shares issued upon
     the exercise of the Warrants), at a Price Per Share of Common Stock,
     in the case of the issuance of Common Stock, or at a Price Per Share
     of Common Stock initially deliverable upon conversion, exercise or
     exchange of such Convertible Securities, in each case, together with
     any other consideration received by the Company in connection with
     such issuance, below the Current Market Price per share of Common
     Stock on the date the Company fixed the offering, conversion or
     exercise or exchange price of such additional shares, then the number
     of Warrant Shares thereafter purchasable upon the exercise of each
     Warrant shall be determined by multiplying the number of Warrant
     Shares theretofore purchasable upon exercise of each Warrant by a
     fraction, the numerator of which shall be the total number of shares
     of Common Stock outstanding on such date plus the additional Number of
     Shares (as defined below) offered for subscription or purchase and the
     denominator of which shall be the number of shares outstanding on such
     date plus the additional Number of Shares which the aggregate Proceeds
     (as defined below) of the total amount of Convertible Securities so
     offered would purchase at the Current Market Price per share of Common
     Stock at such record date. In case the Company shall issue and sell
     Convertible Securities for a consideration consisting, in whole or in
     part, of property other than cash or its equivalent, then in
     determining the "Price Per Share" of Common Stock and the
     "consideration received by the Company" for purposes of this paragraph
     (d), the Board of Directors of the Company shall reasonably and in
     good faith determine the fair value of such property. The
     determination of whether any adjustment is required under this
     paragraph (d), by reason of the sale and issuance of any Convertible
     Securities and the amount of such adjustment, if any, shall be made at
     such time and not at the subsequent time of issuance of shares of
     Common Stock upon the exercise, conversion or exchange of Convertible
     Securities.

         (e) Current Market Price; Price Per Share. (i) For the purpose of
     any computation under Section 4.2 hereof or this Section 9.1, the
     "Current Market Price" per share of Common Stock at any date shall be
     the average of the daily closing prices for the 20 consecutive trading
     days preceding the date of such computation. The closing price for
     each day shall be (x) if the Common Stock shall be then listed or
     admitted to trading on the New York Stock Exchange, the closing price
     on the NYSE - Consolidated Tape (or any successor composite tape
     reporting transactions on the New York Stock Exchange) or, (y) if such
     a composite tape shall not be in use or shall not report transactions
     in the Common Stock, or if the Common Stock shall be listed on a stock
     exchange other than the New York Stock Exchange, the last reported
     sales price regular way or, in case no such reported sale takes place
     on such day, the average of the closing bid and asked prices regular
     way for such day, in each case on the principal national securities
     exchange on which the shares of Common Stock are listed or admitted to
     trading (which shall be the national securities exchange on which the
     greatest number of shares of the Common stock have been traded during
     such 20 consecutive trading days) or (z) if the Common Stock is not
     listed or admitted to trading, the average of the closing bid and
     asked prices of the Common Stock in the over-the-counter market as
     reported by The Nasdaq National Market or any comparable system or, if
     the Common Stock is not included for quotation in The Nasdaq National
     Market or a comparable system, the average of the closing bid and
     asked prices as furnished by two members of the NASD selected
     reasonably and in good faith from time to time by the Board of
     Directors for that purpose. In the absence of one or more such
     quotations, the Current Market Price per share of the Common Stock
     shall be determined reasonably and in good faith by the Board of
     Directors of the Company.

         (ii) For purposes of this Section 9.1, "Price Per Share" shall be
     defined and determined according to the following formula:

                  P        =        R/N

                  where

                  P        =        Price Per Share;

                  R        =        the "Proceeds" received or receivable by
                                    the Company which (x) in the case of shares
                                    of Common Stock is the total amount received
                                    or receivable by the Company in
                                    consideration for the issuance and sale of
                                    such shares; (y) in the case of Rights or of
                                    Convertible Securities with respect to
                                    shares of Common Stock, is the total amount
                                    received or receivable by the Company in
                                    consideration for the issuance and sale of
                                    Rights or such Convertible Securities, plus
                                    the minimum aggregate amount of additional
                                    consideration, other than the surrender of
                                    such Convertible Securities, payable to the
                                    Company upon exercise, conversion or
                                    exchange thereof; and (z) in the case of
                                    Rights to subscribe for or purchase such
                                    Convertible Securities, is the total amount
                                    received or receivable by the Company in
                                    consideration for the issuance and sale of
                                    such Rights plus the minimum aggregate
                                    amount of additional consideration, other
                                    than the surrender of such Convertible
                                    Securities, payable upon the exercise of the
                                    Right and the conversion or exchange or
                                    exercise of such Convertible Securities;
                                    provided that in each case the --------
                                    proceeds received or receivable by the
                                    Company shall be the net cash proceeds after
                                    deducting therefrom any compensation paid or
                                    discount allowed in the sale, underwriting
                                    or purchase thereof by underwriters or
                                    dealers or other performing similar
                                    services;

                  N        =        the "Number of Shares," which (x) in the
                                    case of Common Stock is the number of shares
                                    issued; and (y) in the case of Rights or of
                                    Convertible Securities with respect to
                                    shares of Common Stock, is the maximum
                                    number of shares of Common Stock initially
                                    issuable upon exercise, conversion or
                                    exchange thereof.

         (f) When De Minimis Adjustment May Be Deferred. No adjustment in
     the number of Warrant Shares purchasable hereunder shall be required
     unless such adjustment would require an increase or decrease of at
     least one percent (1%) in the number of Warrant Shares purchasable
     upon the exercise of each Warrant, provided that any adjustments which
     by reason of this paragraph (f) are not required to be made shall be
     carried forward and taken into account in any subsequent adjustment.
     All calculations shall be made to the nearest one-thousandth of a
     Warrant Share and the nearest cent.

         (g) Adjustment in Exercise Price. Whenever the number of Warrant
     Shares purchasable upon the exercise of each Warrant is adjusted as
     herein provided, the Exercise Price payable upon exercise of each
     Warrant immediately prior to such adjustment shall be adjusted by
     multiplying such Exercise Price by a fraction, the numerator of which
     shall be the number of Warrant Shares purchasable upon the exercise of
     each Warrant immediately prior to such adjustment and the denominator
     of which shall be the number of Warrant Shares purchasable immediately
     thereafter.

         (h) When No Adjustment Required. No adjustment in the number of
     Warrant Shares purchasable upon the exercise of each Warrant or in the
     exercise price need be made under this Section 9.1 in connection with:
     (i) the issuance of Common Stock, options, rights, Warrants or other
     securities pursuant to the Plan; (ii) shares of Common Stock, options,
     rights, warrants or other securities issued pursuant to any plan
     adopted by the Company or its subsidiaries for the benefit of
     employees or directors; (iii) any issuance of shares of Common Stock
     or securities convertible into or exchangeable for shares of Common
     Stock pursuant to an underwritten public offering for a price per
     share of Common Stock in the case of an issuance of shares of Common
     Stock, or for a price per share of Common Stock initially deliverable
     upon conversion or exchange of such securities, that is equal to or
     greater than 95% of the Current Market Price per share of Common Stock
     on the date the Company fixed the offering, conversion or exchange
     price of such additional shares of Common Stock; (iv) sales of Common
     Stock pursuant to a plan adopted by the Company for reinvestment of
     dividends or interest; provided, however, that if such sales of Common
     Stock are at a discount of 20% to the Current Market Price, such
     issuances shall require adjustment under this Section, or (v) shares
     of Common Stock issued to shareholders of any corporation that is
     acquired by, merged into or made a part or subsidiary of the Company
     in an arm's-length transaction. Additionally, no adjustment need be
     made if the Company issues or distributes to each Holder of Warrants
     the shares, rights, options, warrants, evidences of indebtedness,
     assets or other securities referred to in those paragraphs which each
     Holder of Warrants would have been entitled to receive had the
     Warrants been exercised for the number of Warrant Shares for which
     Warrants are then exercisable prior to the happening of such event or
     the record date with respect thereto. No adjustment in the number of
     Warrant Shares will be made for a change in the par value of the
     shares of Common Stock.

         (i) Capitalization, Reclassification or Consolidation. If any
     capital reorganization of the Company, or any reclassification of the
     Common Stock, or any consolidation of the Company with or merger of
     the Company with or into any other Person or any sale, lease or other
     transfer of all or substantially all of the assets of the Company to
     any other Person, shall be effected in such a way that the holders of
     the Common Stock shall be entitled to receive stock, other securities,
     cash or other assets (whether such stock, other securities, cash or
     other assets are issued or distributed by the Company or another
     Person) with respect to or in exchange for the Common Stock, then,
     upon exercise of each Warrant, the Warrantholder shall have the right
     to receive the kind and amount of stock, other securities, cash or
     other assets receivable upon such reorganization, reclassification,
     consolidation, merger or sale, lease or other transfer, by a holder of
     the number of Warrant Shares that such Warrant holder would have been
     entitled to receive upon exercise of such Warrant had such Warrant
     been exercised immediately before such reorganization,
     reclassification, consolidation, merger or sale, lease or other
     transfer, subject to adjustments (as determined in good faith by the
     Board of Directors of the Company). Adjustments for events subsequent
     to the effective date of such a reorganization, reclassification,
     consolidation, merger, sale or transfer of assets shall be as nearly
     equivalent as may be practicable to the adjustments provided for in
     this Agreement. In any such event, effective provisions shall be made
     in the certificate or articles of incorporation of the resulting or
     surviving corporation, in any contract of sale, merger, conveyance,
     lease transfer or otherwise so that the provisions set forth herein
     for the protection of the rights of the Warrantholders shall
     thereafter continue to be applicable; and any such resulting or
     surviving corporation shall expressly assume the obligation to
     deliver, upon exercise, such shares of stock, other securities, cash
     and property. The provisions of Section 9 shall similarly apply to
     successive consolidations, mergers, sales, leases or transfers.

         (j) Shares of Common Stock. For all purposes of this Agreement,
     the term "shares of Common Stock" shall mean (i) the class of stock
     designated as the Common Stock of the Company at the date of this
     Agreement, or (ii) any other class of stock resulting from successive
     changes or reclassification of such shares consisting solely of
     changes in par value, or from par value to no par value, or from no
     par value to par value. In the event that at any time, as a result of
     an adjustment made pursuant to this Section 9.1, the Holders shall
     become entitled to purchase any securities of the Company other than
     shares of Common Stock, thereafter the number of such other shares so
     purchasable upon exercise of each Warrant and the Exercise Price of
     such shares shall be subject to adjustment from time to time in a
     manner and on terms substantially identical to the provisions with
     respect to the Warrant Shares contained in paragraphs (a) through (h)
     above, and the provisions of this Agreement with respect to the
     Warrant Shares shall apply on like terms to any such other securities.

         (k) Expiration of Rights, etc. Upon the expiration of any Rights
     or conversion or exchange or exercise rights, if any thereof shall not
     have been exercised, the Exercise Price and the number of Warrant
     Shares purchasable upon the exercise of each Warrant shall, upon such
     expiration, be readjusted and shall thereafter be such as it would
     have been had it been originally adjusted (or had the original
     adjustment not been required, as the case may be) as if (A) the only
     shares of Common Stock so issued were the shares of Common Stock, if
     any, actually issued or sold upon the exercise of such Rights or
     conversion or exchange or exercise rights and (B) such shares of
     Common Stock, if any, were issued or sold for the consideration
     actually received by the Company upon such exercise plus the aggregate
     consideration, if any, actually received by the Company for the
     issuance, sale or grant of all of such Rights or conversion or
     exchange or exercise rights whether or not exercised, provided that no
     such readjustment shall have the effect of increasing the Exercise
     Price or decreasing the number of Warrant Shares purchasable upon the
     exercise of each Warrant by an amount in excess of the amount of the
     adjustment initially made in respect of the issuance, sale or grant of
     such Rights or conversion or exchange or exercise rights.

         9.2 Voluntary Adjustment by the Company. (a) The Company may at its
option, at any time during the term of the Warrants, reduce the then current
Exercise Price, and/or increase the number of Warrant shares issuable upon
exercise of the Warrant, to any amount deemed appropriate by the Board of
Directors of the Company.

                  (b) If, after one or more adjustments to the Exercise Price
pursuant to Section 9, the Exercise Price cannot be reduced further without
falling below the greater of (i) $0.01 or (ii) the lowest positive exercise
price legally permissible for warrants to acquire shares of Common Stock, the
Company shall make further adjustments to compensate the Holder, consistent with
the foregoing principles, as the Board of Directors, acting in good faith, deems
necessary, including an increase in the number of Warrant Shares issuable upon
exercise of outstanding Warrants and/or cash payment to the Holders.

         9.3 Notice of Adjustment. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Exercise Price of Warrant
Shares is adjusted, as herein provided, the Company shall cause the Warrant
Agent promptly to mail to each Holder, at the sole expense of the Company by
first class mail, postage prepaid, notice of such adjustment or adjustments and
shall deliver to the Warrant Agent a certificate of a firm of independent public
accounts (who may be the regular accountants employed by the Company) setting
forth the number of Warrant Shares purchasable upon the exercise of each Warrant
and the Exercise Price of Warrant Shares after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting forth in
reasonable detail the computations by which such adjustment was made. The
Warrant Agent shall be entitled to rely on such certificate and shall be under
no duty or responsibility with respect to any such certificate, except to
exhibit the same, from time to time, to any Holder requesting an inspection
thereof during reasonable business hours. The Warrant Agent shall not at any
time be under any duty or responsibility to any Holder to determine whether any
facts exist which may require any adjustment of the Exercise Price or the number
of Warrant Shares or other stock or property purchasable on exercise of
Warrants, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed in making such adjustment.

         9.4 Preservation of Purchase Rights upon Merger or Consolidation. In
case of any consolidation of the Company with or merger of the Company into
another entity, the Company or such successor entity shall execute and deliver
to the Warrant Agent an agreement, which shall be binding on the Holders, that
each Holder shall have the right thereafter upon payment of the Exercise Price
in effect immediately prior to such action (after giving effect to any
applicable adjustments under Section 9.1 hereof) to purchase upon exercise of
each Warrant (and in lieu of the Common Stock issuable upon exercise of the
Warrant) the kind and amount of shares and other securities and property
(including cash) which such Holder would have owned or have been entitled to
receive after the happening of such consolidation or merger had such Warrant
been exercised immediately prior to such action. The Company shall at its sole
expense mail by first class mail, postage prepaid, to each Holder notice of the
execution of any such agreement. Such agreement shall provide for adjustments,
which shall be substantially identical to the adjustments provided for in this
Section 9. In addition, the Company shall not merge or consolidate with or into,
any other entity unless the successor entity (if not the Company), shall
expressly assume, by supplemental agreement reasonably satisfactory in form and
substance to the Warrant Agent in its sole judgment and executed and delivered
to the Warrant Agent, the due and punctual performance and observance of each
and every covenant and condition of this Agreement to be performed and observed
by the Company. The provisions of this Section 9.4 shall similarly apply to
successive consolidations or mergers. The Warrant Agent shall be under a good
faith duty and responsibility to determine the correctness of any provisions
contained in any such agreement relating to the kind or amount of shares of
stock or other securities or property receivable upon exercise of Warrants or
with respect to the method employed and provided therein for any adjustments and
shall be entitled to rely upon the provisions contained in any such agreement.
In the event of any conflict between Section 9.4 and Section 9.1(i), Section
9.1(i) shall prevail.

         9.5 Statement on Warrants. Irrespective of any adjustments in the
Exercise Price or the number or kind of shares purchasable upon the exercise of
the Warrants, Warrants theretofore or thereafter issued may continue to express
the same Exercise Price and number and kind of Warrant Shares as are stated in
the Warrants initially issuable pursuant to this Agreement.

         Section 10. Fractional Interests. Neither the Company nor the Warrant
Agent shall be required to issue fractional Warrant Shares on the exercise of
Warrants. If more than one Warrant shall be exercised at the same time by the
same Holder, the number of full Warrant Shares which shall be issuable upon such
exercise shall be computed on the basis of the aggregate number of Warrants so
exercised. If any fraction of a Warrant Share would, except for the provisions
of this Section 10, be issuable on the exercise of any Warrant, then the Company
shall pay an amount in cash equal to the closing price for one share of Common
Stock on the date the Warrant Certificate is presented for exercise (determined
in accordance with the second sentence of Section 9.1(e)(i) hereof), multiplied
by such fraction.

         Section 11. No Rights as Stockholders; Notices to Holders. Nothing
contained in this Agreement or in any of the Warrants shall be construed as
conferring upon the Holders or their transferees the right to vote or to receive
dividends or to consent or to receive notice as stockholders in respect of any
meeting of stockholders for the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.

         In case:

         (a) the Company shall authorize the issuance to all holders of
     shares of Common Stock of rights, options or warrants to subscribe for
     or purchase shares of Common Stock or of any other subscription rights
     or warrants; or

         (b) the Company shall authorize the distribution to all holders of
     shares of Common stock of securities or assets (other than cash
     dividends); or 

         (c) of any consolidation or merger to which the Company is a party
     and for which approval of any stockholders of the Company is required,
     or of the conveyance or transfer of a substantial portion of the
     properties and assets of the Company for which approval of any
     stockholders of the Company is required, or of any reclassification or
     change of Common Stock issuable upon exercise of the Warrants (other
     than a change in par value, or from par value to no par value, or from
     no par value to par value, or as a result of a subdivision or
     combination), or a tender offer or exchange offer for shares of Common
     Stock; or 

         (d) of the voluntary or involuntary dissolution, liquidation or
     winding up of the Company;

then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each Holder at its address appearing on the Warrant Register, at
least twenty (20) days prior to the applicable record date hereinafter
specified, or promptly in the case of events for which there is no record date,
by first class mail, postage prepaid, a written notice stating (i) the date as
of which the holders of record of shares of Common Stock entitled to receive any
such rights, options, warrants or distribution are to be determined, or (ii) the
initial expiration date set forth in any tender offer or exchange offer for
shares of Common Stock, or (iii) the date on which any such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, as well as the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange such shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation, or winding up. The failure to give the
notice required by this Section 11 or any defect therein shall not affect the
legality or validity of any distribution, right, option, Warrant,
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation, winding up or action, or the vote upon any of the foregoing.

         Section 12. Payments in U.S. Currency. All payments required to be made
hereunder shall be made in lawful money of the United States of America.

         Section 13. Merger or Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the corporation trust business of the Warrant Agent, shall be the successor to
the Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of Section 15 hereof. In case at the time such successor to the
Warrant Agent shall succeed to the agency created by this Agreement, any of the
Warrant Certificates shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original
Warrant Agent and deliver such Warrant Certificates so countersigned; and in
case at that time any of the Warrant Certificates shall not have been
countersigned, any successor to the Warrant Agent may countersign such Warrant
Certificates either in the name of the predecessor Warrant Agent or in its name;
and in all such cases such Warrant Certificates shall be fully valid and
effective as provided therein and in this Agreement.

         In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent may adopt the countersignatures under its prior
name and deliver such Warrant Certificates so countersigned; and in case at that
time any of the Warrant Certificates shall not have been countersigned, the
Warrant Agent may countersign such Warrant Certificates either in its prior name
or in its changed name; and in all such cases such Warrant Certificates shall be
fully valid and effective as provided therein and in this Agreement.

         Section 14. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company hereunder and in accordance
with the terms and conditions hereof, and the Warrant Agent hereby accepts such
appointment.

         14.1 Concerning the Warrant Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, and no implied duties or obligations shall be read into this Warrant
Agreement against the Warrant Agent, by all of which the Company and the
Holders, by their acceptance of Warrant Certificates, shall be bound.

         14.2 Correctness of Statements. The statements contained herein and in
the Warrant Certificates shall be taken as statements of the Company, and the
Warrant Agent assumes no responsibility for the correctness of any of the same
except statements that describe the Warrant Agent or action taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of the
Warrant Certificates or Warrants except as herein otherwise provided.

         14.3 Breach of Covenants. The Warrant Agent shall not be responsible
for any failure of the Company to comply with any of the covenants contained in
this Agreement or in the Warrant to be complied with by the Company.

         14.4 Performance of Duties. The Warrant Agent may execute and exercise
any of the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents and shall not be
responsible for the misconduct or negligence of any attorney or agent (which
shall not include an employee of the Warrant Agent) appointed with due care.

         14.5 Reliance on Counsel. Before the Warrant Agent acts or refrains
from acting, the Warrant Agent may consult at any time with legal counsel
satisfactory to it (who may be counsel for the Company), and the Warrant Agent
shall incur no liability or responsibility to the Company or to any Holder in
respect to any action taken, suffered or omitted by it hereunder in good faith
and in accordance with the opinion or the advice of such counsel.

         14.6 Proof of Actions Taken. Whenever in the performance of its duties
under this Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed conclusively to
be proved and established by a certificate signed by any of the Chairman of the
Board, the President, a Vice President, the Treasurer or the Secretary of the
Company and delivered to the Warrant Agent; and such certificate shall be full
authorization to the Warrant Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.

         14.7 Compensation and Indemnification. The Company agrees to pay the
Warrant Agent reasonable compensation for all services rendered by the Warrant
Agent in the performance of its duties under this Agreement, to reimburse the
Warrant Agent for all reasonable expenses, taxes and governmental charges and
other charges of any kind and nature incurred by the Warrant Agent in the
performance of its duties under this Agreement (including but not limited to
legal fees and expenses), and to indemnify the Warrant Agent and its officers,
agents and directors for and to hold each harmless from any and all losses,
liabilities, including judgments, costs and counsel fees, for anything done or
omitted by the Warrant Agent or any of its agents in the performance of its
duties under this Agreement, except as a result of the Warrant Agent's gross
negligence or willful misconduct as determined in a final judgment of a court of
competent jurisdiction and authority. The Company's obligations under this
Section 14.7 and any claim arising hereunder shall survive the resignation or
removal of the Warrant Agent and the termination or discharge of the Company's
obligations under this Agreement. The costs and expenses incurred in enforcing
this right of indemnification shall be paid by the Company.

         14.8 Legal Proceedings. The Warrant Agent shall be under no obligation
to institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or any one or more Holders shall
furnish the Warrant Agent with reasonable security and indemnity for any costs
and expenses which may be incurred or any liabilities which may arise, but this
provision shall not affect the power of the Warrant Agent to take such action as
the Warrant Agent may consider proper, whether with or without any such security
or indemnity. All rights of action of any Holder under this Agreement or under
any of the Warrants may be enforced by the Warrant Agent without the possession
of any of the Warrant Certificates or the production thereof at any trial or
other proceeding relative thereto, and any such action, suit or proceeding
instituted by the Warrant Agent shall be brought in its name as Warrant Agent,
and any recovery of judgment shall be for the ratable benefit of the Holders, as
their respective rights or interests may appear.

         14.9 Other Transactions in Securities of Company. The Warrant Agent and
any stockholder, director, officer or employee of the Warrant Agent may buy,
sell or deal in any of the Warrants or any other securities of the Company or
have a pecuniary interest in any transaction in which the Company may be
interested or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.

         14.10 Liability of Warrant Agent. The Warrant Agent shall act hereunder
solely as agent, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything which it may do or
refrain from doing in connection with this Agreement except for its own
negligence or bad faith.

         14.11 Reliance on Documents. The Warrant Agent will not incur any
liability or responsibility to the Company or to any Holder for any action taken
in reliance on any notice, resolution, waiver, consent order, certificate, or
other paper, document or instrument reasonably believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.

         14.12 Validity of Agreement. The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Warrant Agent) or for
any of the statements of fact or recitals contained in this Agreement or in
respect of the validity or execution of any Warrant Certificate (except its
countersignature thereof) or any Warrant; nor shall the Warrant Agent by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Warrant Shares (or other securities) to be
issued pursuant to this Agreement or any Warrant, or as to whether any Warrant
Shares (or other securities) will, when issued, be validly issued, fully paid
and nonassessable, or as to the Exercise Price or the number or amount of
Warrant Shares or other securities or any Assets or other property issuable upon
exercise of any Warrant.

         14.13 Instructions from Company. The Warrant Agent is hereby authorized
and directed to accept instructions with respect to the performance of its
duties hereunder from any person believed in good faith by the Warrant Agent to
be one of the Chairman of the Board, the President, a Vice President, the
Treasurer or the Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer or officers or any delay in acting while
waiting for these instructions..

         Section 15. Change of Warrant Agent. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company
thirty (30) days' written notice. The Warrant Agent may be removed by like
notice to the Warrant Agent and the Holders from the Company, such notice to
specify the date when removal shall become effective. If the Warrant Agent shall
resign or be removed or shall otherwise become incapable of acting, then the
Company shall appoint a successor to the Warrant Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days after such
removal or written notification of such resignation or incapacity by the
resigning or incapacitated Warrant Agent or by any Holder (who shall with such
notice submit his Warrant Certificate or Certificates for inspection by the
Company), then any Holder may apply to any court of competent jurisdiction for
the appointment of a successor to the Warrant Agent. Any successor Warrant
Agent, whether appointed by the Company or such a court, shall be a bank or
trust company, in good standing, incorporated under the laws of the United
States of America or any state thereof and having at the time of its appointment
as Warrant Agent a combined capital and surplus of at least $100,000,000. After
appointment and acceptance of such appointment in writing, the successor Warrant
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Warrant Agent without further act or deed;
but the former Warrant Agent shall deliver and transfer to the successor Warrant
Agent any property at the time held by it hereunder, and shall execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Failure to file any notice provided for in this Section 15, however, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Warrant Agent or the appointment of the successor Warrant
Agent, as the case may be. In the event of such resignation or removal, the
successor Warrant Agent shall mail, by first class mail, postage prepaid, to
each Holder, written notice of such removal or resignation and the name and
address of such successor Warrant Agent.

         Section 16. Notices. Any notice pursuant to this Agreement by the
Company or by any Holder to the Warrant Agent, shall be in writing and shall be
delivered in person or sent by registered or certified mail and shall be deemed
given upon receipt at its offices at Harris Trust & Savings Bank, 311 W. Monroe
Street, Chicago, IL 60606 Attention: Charles Zade. Any notice pursuant to this
Agreement by the Warrant Agent or by any Holder to the Company, shall be in
writing and shall be delivered in person or by confirmed facsimile transmission
(plus a copy delivered by overnight mail) or first class mail, postage prepaid
at its offices at MFN Financial Corporation, 100 Field Drive, Lake Forest,
Illinois 60045, Attention: Corporate Secretary, Telecopier No.: (847) 295-8785.
Each party hereto may from time to time change the address to which its notices
are to be delivered or mailed hereunder by notice to the other party.

         Any notice mailed pursuant to this Agreement by the Company or the
Warrant Agent to the Holders shall be in writing and shall be mailed first
class, postage prepaid, or otherwise delivered, to such Holders at their
respective addresses in the Warrant Register. The initial address of each Holder
shall be as provided by the Company to the Warrant Agent. Any Holder may change
its address by notice to the Company and the Warrant Agent given in accordance
with this Section 16.

         Section 17. Cancellation of Warrants. In the event the Company shall
purchase or otherwise acquire Warrants, the same shall thereupon be delivered to
the Warrant Agent and be cancelled by it and retired. The Warrant Agent shall
cancel any Warrant Certificate surrendered for exchange, substitution, transfer
or exercise in whole or in part.

         Section 18. Supplements and Amendments. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement, the Warrants and
the Warrant Certificates without approval of any Holder, in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to comply with
the requirements of any national securities exchange or The Nasdaq National
Market, or to make any other provisions in regard to matters or questions
arising hereunder which the Company and the Warrant Agent may deem necessary or
desirable and which shall not be inconsistent with the provisions of the
Warrants and this Agreement. Any other supplement or amendment to this Agreement
may be made with the approval of the Holders of a majority of outstanding
Warrants of each series of Warrants, voting separately as three classes.
Notwithstanding the foregoing, any amendment or supplement that (i) increases
the Exercise Price; (ii) decreases the number of shares of Common Stock issuable
upon exercise of a Warrant; or (iii) shortens the period during which the
Warrants may be exercised shall require the consent of each Holder of a Warrant
affected thereby. Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment that changes the rights and duties of the Warrant Agent
under this Agreement will be effective against the Warrant Agent without the
execution of such supplement or amendment by the Warrant Agent.

         Section 19. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure solely to the benefit of the Company or the Warrant Agent and their
respective successors hereunder.

         Section 20. Applicable Law. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
state of Delaware without giving effect to the principles of conflict of laws
thereof, except as to the rights and obligations of the Warrant Agent, which
shall be governed by and construed in accordance with the laws of the Sate of
Illinois.

         Section 21. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the Holders any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent, their respective successors, and the
Holders of the Warrants.

         Section 22. Counterparts. This Agreement may be executed in any number
of counterparts; each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.

         Section 23. Captions. The captions of the Sections and subsections of
this Agreement have been inserted for convenience only and shall have no
substantive effect.

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

                                        MFN FINANCIAL CORPORATIONBy:
                                        Name:
                                        Title:



                                        HARRIS TRUST AND SAVINGS BANK
                                        as Warrant Agent


                                        By:
                                        Name:
                                        Title:



<PAGE>

                                    Series A
                               Warrant Certificate

                            MFN FINANCIAL CORPORATION

         This Warrant Certificate certifies that ____________________ or
registered assigns, is the registered holder of Series A Warrants (the
"Warrants") expiring at 5:00 p.m., New York City time, on March 23, 2002 (Three
years from the Effective Date) (the "Expiration Date"), to purchase Common
Stock, $0.01 par value per share (the "Common Stock"), of MFN FINANCIAL
CORPORATION, a Delaware corporation (the "Company"). The Warrants may be
exercised at any time from 9:00 am., New York City time, on March 23, 1999 to
5:00 p.m., New York City time, on the Expiration Date. Each Warrant entitles the
holder upon exercise to receive from the Company, if exercised before 5:00 p.m.,
New York City time, on the Expiration Date, one fully paid and nonassessable
share of Common Stock (a "Warrant Share") at the Exercise Price (as defined in
the Warrant Agreement referred to on the reverse side hereof), payable in lawful
money of the United States of America, upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the
Warrant Agent, but only subject to the conditions set forth herein and in the
Warrant Agreement. The Exercise Price and number of Warrant Shares issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events as set forth in the Warrant Agreement.

         WARRANTS NOT EXERCISED ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON
MARCH 23, 2002 (THREE YEARS FROM THE EFFECTIVE DATE) SHALL BECOME VOID.

         Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.

         This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement.

         IN WITNESS WHEREOF, MFN FINANCIAL CORPORATION has caused this Warrant
Certificate to be duly executed.

                                            MFN FINANCIAL CORPORATION


                                            By:
                                            Title:

Dated:

Countersigned:

HARRIS TRUST AND SAVINGS BANK,
as Warrant Agent


By:
         Authorized Signatory




<PAGE>

                          [Form of Warrant Certificate]

                                    (Reverse)

         The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring on the Expiration Date entitling the
holder on exercise to receive shares of Common Stock of the Company and are
issued or to be issued pursuant to a Warrant Agreement dated as of March 23,
1999 (the "Warrant Agreement"), duly executed and delivered by the Company to
Harris Trust and Savings Bank, as Warrant Agent (the "Warrant Agent"), which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
the Company and the holders (the words "holders" or "holder" meaning the
registered holders or registered holder) of the Warrants. A copy of the Warrant
Agreement may be obtained by the holder hereof upon written request to the
Company. By accepting initial delivery, transfer or exchange of this Warrant,
the duly registered holder shall be deemed to have agreed to the terms of the
Warrant Agreement as it may be in effect from time to time, including any
amendments or supplements duly adopted in accordance therewith.

         The holder of Warrants evidenced by this Warrant Certificate may
exercise them by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the Exercise Price in the manner described below at the office
of the Warrant Agent. In the event that upon any exercise of Warrants evidenced
hereby the number of Warrants exercised shall be less than the total number of
Warrants evidenced hereby, there shall be issued to the holder hereof or its
assignee a new Warrant Certificate evidencing the number of Warrants not
exercised.

         Payment of the Exercise Price may be made in cash by wire transfer to
the Warrant Agent for the account of the Company or by certified or official
bank check or checks to the order of the Company or by any combination thereof.

         The Warrant Agreement provides that upon the occurrence of certain
events the number of shares of Common Stock issuable upon the exercise of each
Warrant, and the Exercise Price of each Warrant, may, subject to certain
conditions, be adjusted. No fractions of a share of Common Stock will be issued
upon the exercise of any Warrant, but the Company shall pay the cash value
thereof determined as provided in the Warrant Agreement.

         Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.

         Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.

         The Company and the Warrant Agent may deem and treat the registered
holder(s) hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.



<PAGE>

                                  PURCHASE FORM

         The undersigned hereby irrevocably elects to exercise this Series A
Warrant, according to the terms and conditions hereof, to the extent of
purchasing __________ shares of Common Stock and hereby makes payment of
$________ in payment of the exercise price thereof. If the number of shares
shall not be all of the shares purchasable under this Warrant, then a new
Warrant Certificate for the balance remaining shall be issued in the name of the
undersigned or its assignee as indicated on the Assignment Form.

Dated:



                     INSTRUCTIONS FOR REGISTRATION OF STOCK


Name:
                  (please typewrite or print in block letters)

Address:

         Signature
                           Note:  The signature must conform in all respects to
                           name of holder as specified on the face of this 
                           Warrant Certificate

         Signature Guaranteed:



<PAGE>

                                 ASSIGNMENT FORM

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

Name:
                  (please typewrite or print in block letters)

Address:

its right to purchase __________ shares of Common Stock represented by this
Series A Warrant and does hereby irrevocably constitute and appoint __________
Attorney, to transfer the same on the books of the Company, with full power of
substitution in the premises.

Dated:



                                                 Signature:
Social Security or other identifying number of        Note:  The signature must
holder                                                conform in all respects to
                                                      name of holder as
                                                      specified on the face of 
                                                      this Warrant Certificate

Signature Guaranteed:


<PAGE>

                                    Series B
                               Warrant Certificate

                            MFN FINANCIAL CORPORATION

         This Warrant Certificate certifies that ____________________ or
registered assigns, is the registered holder of Series B Warrants (the
"Warrants") expiring at 5:00 p.m., New York City time, on March 23, 2003 (Four
years from the Effective Date) (the "Expiration Date"), to purchase Common
Stock, $0.01 par value per share (the "Common Stock"), of MFN FINANCIAL
CORPORATION, a Delaware corporation (the "Company"). The Warrants may be
exercised at any time from 9:00 am., New York City time, on March 23, 1999 to
5:00 p.m., New York City time, on the Expiration Date. Each Warrant entitles the
holder upon exercise to receive from the Company, if exercised before 5:00 p.m.,
New York City time, on the Expiration Date, one fully paid and nonassessable
share of Common Stock (a "Warrant Share") at the Exercise Price (as defined in
the Warrant Agreement referred to on the reverse side hereof), payable in lawful
money of the United States of America, upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the
Warrant Agent, but only subject to the conditions set forth herein and in the
Warrant Agreement. The Exercise Price and number of Warrant Shares issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events as set forth in the Warrant Agreement.

         WARRANTS NOT EXERCISED ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON
MARCH 23, 2003 (FOUR YEARS FROM THE EFFECTIVE DATE) SHALL BECOME VOID.

         Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.

         This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement.

         IN WITNESS WHEREOF, MFN FINANCIAL CORPORATION has caused this Warrant
Certificate to be duly executed.

                                         MFN FINANCIAL CORPORATION


                                         By:
                                         Title:

Dated:

Countersigned:

HARRIS TRUST AND SAVINGS BANK,
as Warrant Agent


By:
         Authorized Signatory




<PAGE>

                          [Form of Warrant Certificate]

                                    (Reverse)

         The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring on the Expiration Date entitling the
holder on exercise to receive shares of Common Stock of the Company and are
issued or to be issued pursuant to a Warrant Agreement dated as of March 23,
1999 (the "Warrant Agreement"), duly executed and delivered by the Company to
Harris Trust and Savings Bank, as Warrant Agent (the "Warrant Agent"), which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
the Company and the holders (the words "holders" or "holder" meaning the
registered holders or registered holder) of the Warrants. A copy of the Warrant
Agreement may be obtained by the holder hereof upon written request to the
Company. By accepting initial delivery, transfer or exchange of this Warrant,
the duly registered holder shall be deemed to have agreed to the terms of the
Warrant Agreement as it may be in effect from time to time, including any
amendments or supplements duly adopted in accordance therewith.

         The holder of Warrants evidenced by this Warrant Certificate may
exercise them by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the Exercise Price in the manner described below at the office
of the Warrant Agent. In the event that upon any exercise of Warrants evidenced
hereby the number of Warrants exercised shall be less than the total number of
Warrants evidenced hereby, there shall be issued to the holder hereof or its
assignee a new Warrant Certificate evidencing the number of Warrants not
exercised.

         Payment of the Exercise Price may be made in cash by wire transfer to
the Warrant Agent for the account of the Company or by certified or official
bank check or checks to the order of the Company or by any combination thereof.

         The Warrant Agreement provides that upon the occurrence of certain
events the number of shares of Common Stock issuable upon the exercise of each
Warrant, and the Exercise Price of each Warrant, may, subject to certain
conditions, be adjusted. No fractions of a share of Common Stock will be issued
upon the exercise of any Warrant, but the Company shall pay the cash value
thereof determined as provided in the Warrant Agreement.

         Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.

         Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.

         The Company and the Warrant Agent may deem and treat the registered
holder(s) hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.



<PAGE>

                                  PURCHASE FORM

         The undersigned hereby irrevocably elects to exercise this Series B
Warrant, according to the terms and conditions hereof, to the extent of
purchasing __________ shares of Common Stock and hereby makes payment of
$________ in payment of the exercise price thereof. If the number of shares
shall not be all of the shares purchasable under this Warrant, then a new
Warrant Certificate for the balance remaining shall be issued in the name of the
undersigned or its assignee as indicated on the Assignment Form.

Dated:



                     INSTRUCTIONS FOR REGISTRATION OF STOCK


Name:
                  (please typewrite or print in block letters)

Address:

         Signature
                     Note:  The signature must conform in all respects to name
                     of holder as specified on the face of this Warrant 
                     Certificate

         Signature Guaranteed:



<PAGE>

                                 ASSIGNMENT FORM

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

Name:
                  (please typewrite or print in block letters)

Address:

its right to purchase __________ shares of Common Stock represented by this
Series B Warrant and does hereby irrevocably constitute and appoint __________
Attorney, to transfer the same on the books of the Company, with full power of
substitution in the premises.

Dated:



                                                Signature:
Social Security or other identifying number of        Note:  The signature must
holder                                                conform in all respects to
                                                      name of holder as 
                                                      specified on the face of 
                                                      this Warrant Certificate

Signature Guaranteed:


<PAGE>

                                    Series C
                               Warrant Certificate

                            MFN FINANCIAL CORPORATION

         This Warrant Certificate certifies that ____________________ or
registered assigns, is the registered holder of Series C Warrants (the
"Warrants") expiring at 5:00 p.m., New York City time, on March 23, 2004 (Five
years from the Effective Date) (the "Expiration Date"), to purchase Common
Stock, $0.01 par value per share (the "Common Stock"), of MFN FINANCIAL
CORPORATION, a Delaware corporation (the "Company"). The Warrants may be
exercised at any time from 9:00 am., New York City time, on March 23, 1999 to
5:00 p.m., New York City time, on the Expiration Date. Each Warrant entitles the
holder upon exercise to receive from the Company, if exercised before 5:00 p.m.,
New York City time, on the Expiration Date, one fully paid and nonassessable
share of Common Stock (a "Warrant Share") at the Exercise Price (as defined in
the Warrant Agreement referred to on the reverse side hereof), payable in lawful
money of the United States of America, upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the
Warrant Agent, but only subject to the conditions set forth herein and in the
Warrant Agreement. The Exercise Price and number of Warrant Shares issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events as set forth in the Warrant Agreement.

         WARRANTS NOT EXERCISED ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON
MARCH 23, 2004 (FIVE YEARS FROM THE EFFECTIVE DATE) SHALL BECOME VOID.

         Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.

         This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement.

         IN WITNESS WHEREOF, MFN FINANCIAL CORPORATION has caused this Warrant
Certificate to be duly executed.

                                         MFN FINANCIAL CORPORATION


                                         By:
                                         Title:

Dated:

Countersigned:

HARRIS TRUST AND SAVINGS BANK,
as Warrant Agent


By:
         Authorized Signatory




<PAGE>

                          [Form of Warrant Certificate]

                                    (Reverse)

         The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring on the Expiration Date entitling the
holder on exercise to receive shares of Common Stock of the Company and are
issued or to be issued pursuant to a Warrant Agreement dated as of March 23,
1999 (the "Warrant Agreement"), duly executed and delivered by the Company to
Harris Trust and Savings Bank, as Warrant Agent (the "Warrant Agent"), which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
the Company and the holders (the words "holders" or "holder" meaning the
registered holders or registered holder) of the Warrants. A copy of the Warrant
Agreement may be obtained by the holder hereof upon written request to the
Company. By accepting initial delivery, transfer or exchange of this Warrant,
the duly registered holder shall be deemed to have agreed to the terms of the
Warrant Agreement as it may be in effect from time to time, including any
amendments or supplements duly adopted in accordance therewith.

         The holder of Warrants evidenced by this Warrant Certificate may
exercise them by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the Exercise Price in the manner described below at the office
of the Warrant Agent. In the event that upon any exercise of Warrants evidenced
hereby the number of Warrants exercised shall be less than the total number of
Warrants evidenced hereby, there shall be issued to the holder hereof or its
assignee a new Warrant Certificate evidencing the number of Warrants not
exercised.

         Payment of the Exercise Price may be made in cash by wire transfer to
the Warrant Agent for the account of the Company or by certified or official
bank check or checks to the order of the Company or by any combination thereof.

         The Warrant Agreement provides that upon the occurrence of certain
events the number of shares of Common Stock issuable upon the exercise of each
Warrant, and the Exercise Price of each Warrant, may, subject to certain
conditions, be adjusted. No fractions of a share of Common Stock will be issued
upon the exercise of any Warrant, but the Company shall pay the cash value
thereof determined as provided in the Warrant Agreement.

         Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.

         Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.

         The Company and the Warrant Agent may deem and treat the registered
holder(s) hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.



<PAGE>

                                  PURCHASE FORM

         The undersigned hereby irrevocably elects to exercise this Series C
Warrant, according to the terms and conditions hereof, to the extent of
purchasing __________ shares of Common Stock and hereby makes payment of
$________ in payment of the exercise price thereof. If the number of shares
shall not be all of the shares purchasable under this Warrant, then a new
Warrant Certificate for the balance remaining shall be issued in the name of the
undersigned or its assignee as indicated on the Assignment Form.

Dated:



                     INSTRUCTIONS FOR REGISTRATION OF STOCK


Name:
                  (please typewrite or print in block letters)

Address:

         Signature
                   Note:  The signature must conform in all respects to name of 
                   holder as specified on the face of this Warrant Certificate

         Signature Guaranteed:



<PAGE>

                                 ASSIGNMENT FORM

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

Name:
                  (please typewrite or print in block letters)

Address:

its right to purchase __________ shares of Common Stock represented by this
Series C Warrant and does hereby irrevocably constitute and appoint __________
Attorney, to transfer the same on the books of the Company, with full power of
substitution in the premises.

Dated:



                                                Signature:
Social Security or other identifying number of     Note:  The signature must
holder                                             conform in all respects to
                                                   name of holder as specified
                                                   on the face of this Warrant 
                                                   Certificate

Signature Guaranteed:


                                                                      Exhibit 10

                          REGISTRATION RIGHTS AGREEMENT


                  THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of March 23, 1999, is by and among MFN Financial Corporation, a Delaware
corporation (the "Company"), and the Persons identified on Schedule 1 hereto
(the " New Securities Holders").

                                    RECITALS

                  A. Pursuant to the Company's Plan of Reorganization dated as
of December 29, 1998 (the "Plan") as part of the distribution to Class 4
claimholders under the Plan, the Company will issue 9.5 million of the then
outstanding shares of the New Common Stock of the Company (the "Shares") and
certain New Senior Secured Notes (both as defined in the Plan) to such
claimholders. In addition, the New Junior Subordinated Notes (as defined in the
Plan) shall be distributed to Class 5 claimholders under the Plan.

                  B. As a condition to the consummation of the transactions
contemplated by the Plan, the Company has agreed to grant certain securities
registration rights to the New Securities Holders as set forth herein.

                                   AGREEMENTS

                  In consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

                  1. Definitions. In addition to the capitalized terms defined
elsewhere in this Agreement and to the defined terms set forth in the Plan that
are not otherwise defined herein, the following capitalized terms shall have the
following meaning when used in this Agreement:

                  "Adverse Disclosure" means public disclosure of material
non-public information relating to a significant transaction, which disclosure
(i) would be required to be made in any registration statement filed with the
Commission by the Company so that such registration statement would not be
materially misleading; (ii) would not be required to be made at such time but
for the filing of such registration statement; and (iii) would, in the good
faith judgment of the Company's Board of Directors, have a material adverse
effect upon the Company's ability to complete such significant transaction or
upon the terms on which such significant transaction could be completed.

                  "Affiliate" means, as to any specified person, any other
Person which, directly or indirectly, controls, is controlled by or is under
common control with, such specified Person. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.

                  "Commission" means the Securities and Exchange Commission.

                  "Common Stock" means the Company's New Common Stock issued
pursuant to the Plan.

                  "Expiration Time" means the earlier of (i) March 23, 2002 (the
3rd anniversary of Effective Date of the Plan), and (ii) the first time at which
no Holder holds more than 10% of the Shares.

                  "Holders" means the holders of Registrable Shares who are New
Securities Holders or successors or assigns or subsequent holders contemplated
by Section 15 hereof.

                  "Person" means a natural person, a partnership, a corporation,
a limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or other entity, or a governmental
entity or any department, agency or political subdivision thereof.

                  "Qualified Public Offering" means the first underwritten
offering of Common Stock made by the Company for its own account after the date
hereof and on or prior to March 23, 2002 (the 3rd anniversary of Effective Date
of the Plan) pursuant to an effective registration statement under the
Securities Act.

                  "Registrable Shares" means the Common Stock, the New Senior
Secured Notes, and the New Junior Subordinated Notes beneficially owned by the
Holders; provided, however, that Registrable Shares shall not include (a) any
share that has been sold under an effective registration statement pursuant to
the Securities Act, or (b) any share that has been otherwise transferred (other
than to a New Securities Holder or an Affiliate of a New Securities Holder) and
in the opinion of counsel to the Company, the subsequent disposition of such
share shall not require registration under the Securities Act.

                  "Registration Expenses" has the meaning ascribed to it in
Section 7 of this Agreement.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.

                  "Shelf Period" has the meaning set forth in Section 2(b).

                  "Shelf Registration" means a registration effected pursuant to
Section 2.

                  "Shelf Registration Statement" means a registration statement
of the Company filed with the Commission on Form S-1 or, if available, Form S-3
(or any successors thereto) for an offering to be made on a continuous basis
pursuant to Rule 415 (or any similar rule that may be adopted by the Commission)
covering some or all of the Registrable Shares, as applicable.

                  "Subsidiary" means any corporation, association or other
entity of which securities or other ownership interests representing more than
fifty percent (50%) of the ordinary voting power are, at the time as of which
any determination is being made, owned or controlled by the Company or one or
more Subsidiaries of the Company or by the Company and one or more Subsidiaries
of the Company.

                  "Underwritten Offering" means a registration in which
securities of the Company are sold to an underwriter on a firm commitment basis
for reoffering to the public.

                  2.       Shelf Registration

                  (a) Filing. As soon as is practicable after the effective date
of the Company's Plan, the Company shall file with the Commission a Shelf
Registration Statement relating to the offer and sale of the Registrable Shares
by the Holders thereof from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such Shelf Registration
Statement and, thereafter shall use its best efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act. If, on
the effective date of the Plan, the Company does not qualify to file a Shelf
Registration Statement, then the provisions of Section 3, below, shall apply,
but any time thereafter that the Company does so qualify, it shall, as promptly
as practicable, file a Shelf Registration Statement.

                  (b) Continued Effectiveness. The Company shall use its best
efforts to keep the Shelf Registration Statement continuously effective in order
to permit the Prospectus forming part thereof to be usable by Holders until the
third anniversary of the Effective Date of the Plan (but in no event prior to
the applicable period referred to in Section 4(3) of the Act and Rule 174
thereunder) (such period being the "Shelf Period"). Subject to Section 2(c), the
Company shall not be deemed to have used its best efforts to keep the Shelf
Registration Statement effective during the Shelf Period if the Company
voluntarily takes any action or omits to take any action that would result in
Holders of the Registrable Shares covered thereby not being able to offer and
sell any such Registrable Shares during the Shelf Period, unless such action or
omission is required by applicable law.

                  (c) Delay in Filing; Suspension of Registration. If the filing
of the Shelf Registration Statement or the continued effectiveness of the Shelf
Registration Statement at any time would require the Company to make an Adverse
Disclosure, the Company may, upon giving prompt written notice of such action to
the Holders, delay filing the Shelf Registration Statement or suspend use of the
Shelf Registration Statement (in either case, a "Shelf Suspension"); provided,
however, the Company shall not be permitted to exercise a Shelf Suspension (i)
more than twice during any twelve (12) month period, (ii) for a period exceeding
forty-five (45) days on any one occasion, or (iii) for an aggregate period
exceeding sixty (60) days in any twelve (12) month period. In the case of a
Shelf Suspension, the notice required above shall request the Holders to suspend
any sale or purchase, or offer to sell or purchase the Registrable Shares, and
to suspend use of the Prospectus related to the Shelf Registration in connection
with any such sale or purchase or offer to sell or purchase. The Company shall
immediately notify the holders upon the termination of any Shelf Suspension,
amend or supplement the Prospectus, if necessary, so it does not contain any
untrue statement or omission therein and furnish to the holder such numbers of
copies of the Prospectus as so amended or supplemented as the Holders may
reasonably request.

                  (d) Underwritten Offering. If the Holders of not less than 10%
of the Shares covered by the Shelf Registration Statement so elect, the offering
of Registrable Shares pursuant to such Shelf Registration Statement shall be in
the form of an Underwritten Offering and the Company shall amend or supplement
the Registration Statement, if appropriate. The Holders of not less than 50% of
the Registrable Shares included in such Shelf Registration shall have the right
to select the managing underwriter or underwriters to administer the offering,
subject to the consent of the Company, which consent shall not be unreasonably
withheld.

                  3.       Demand Registrations.

                  (a) Requests for Registration. If, at any time six months
after the Effective Date of the Plan and prior to the Expiration Time, a Shelf
Registration Statement shall not be effective (other than as a result of the
operation of the provisions of Section 2(c) hereof), then at such time any
Holder or Holders of at least 10% of the Shares may request registration under
the Securities Act of all or part of their Registrable Shares; provided,
however, that such request shall relate to not less than 10% of the Shares.
Within 14 days after receipt of any request pursuant to this Section 3(a), the
Company will give written notice of such request to all other holders of
Registrable Shares and, subject to the terms hereof and applicable law, will use
its best efforts to effect such registration and will include in such
registration all Registrable Shares with respect to which the Company has
received written requests for inclusion therein within 14 days after the
Company's notice has been given. All registrations requested pursuant to this
Section 3(a) are referred to herein as "Demand Registrations." Subject to the
terms hereof, the Company shall have the right to include securities for its own
account in any Demand Registration, and holders of the Company's securities who
have the right to participate in any Demand Registration pursuant to an
agreement with the Company shall have the right to include securities (the
"Required Shares") in such Demand Registration.

                  (b) Number of Demand Registrations. The Holders may request no
more than, and the Company will be obligated to effect no more than, three
Demand Registrations pursuant to Section 3(a). A registration will not count as
a Demand Registration hereunder until the related registration statement has
become effective.

                  (c) Payment of Expenses for Demand Registrations. The Company
will pay all Registration Expenses for any Demand Registration.

                  (d) Priority on Demand Registrations. The Holder or Holders
initiating the Demand Registration may elect whether the offering of such
Registrable Shares pursuant to such Demand Registration shall be in the form of
a Underwritten Offering or otherwise. In any case in which an offering is in the
form of a Underwritten Offering, if the managing underwriter or underwriters of
such offering advises the Company in writing that, in its or their opinion, it
is probable that inclusion of the number of Registrable Shares, Required Shares,
if any, and securities of the Company ("Company Shares"), if any, proposed to be
included in such offering would adversely affect the marketability of the Common
Stock, the Company will include in such registration the number of Registrable
Shares, Required Shares, if any, and Company Shares, if any, that in the opinion
of such managing underwriter or underwriters can be sold without adversely
affecting the market for the Common Stock. In such event, (a) first, the number
of Required Shares, if any, and Company Shares, if any, to be offered shall be
reduced to the extent necessary to reduce the total number of shares to be
included in such offering to the number recommended by such managing underwriter
or underwriters and (b) then, if necessary, the number of Registrable Shares to
be offered shall be reduced pro rata on the basis of the relative number of
Registrable Shares requested by each such Holder to be included in such
registration to the extent necessary to reduce the total number of shares to be
included in such offering to the number recommended by such managing underwriter
or underwriters.

                  (e) Restrictions on Registrations. (i) The Company may
postpone for a reasonable period not to exceed 120 days, the filing, amendment
or the effectiveness of a registration statement for a Demand Registration if
the board of directors of the Company determines reasonably and in good faith
that such filing would be significantly disadvantageous to the Company or its
stockholders.

                           (ii) A Holder shall not request the registration of
Registrable Shares pursuant to Section 3(a) hereof during the period commencing
on the seventh day prior to the effective date of an offering by the Company
that is registered under the Securities Act and ending on the ninetieth day
after such offering is completed.

                  (f) Short-Form Registrations. If an underwritten Demand
Registration is registered pursuant to Form S-3 (or any successor form thereto),
and if the managing underwriter reasonably requests the inclusion in the
Registration Statement of information which is not required under the Securities
Act to be included on Form S-3, the Company will provide such information for
inclusion by the managing underwriter.

                  4.       Piggyback Registrations.

                  (a) Right to Initial Piggyback. In connection with a Qualified
Public Offering, if the registration form to be used may be used for the
registration of Registrable Shares (an "Initial Piggyback Registration"), the
Company will give written notice (the "Offering Notice") at least 21 days prior
to the anticipated filing date to all holders of Registrable Shares of its
intention to effect such a registration, and the Company will use its best
efforts to effect such registration and will include in such registration all
Registrable Shares with respect to which the Company has received written
requests for inclusion therein within 14 days after the Company's notice has
been given (the "Included Registrable Shares"). Notwithstanding the foregoing,
if, and to the extent, that the managing underwriter or underwriters of the
offering advise the Company that in its or their opinion it is probable that the
inclusion of the Included Registrable Shares in the Qualified Public Offering
would adversely affect the marketability of the shares to be sold in such
offering, then the total number of Included Registrable Shares may be reduced on
a pro rata basis on the basis of the relative number of Registrable Shares
requested by each such Holder to that number recommended by the underwriter or
underwriters.

                  (b) Right to Additional Piggyback. At any time after the
effective date of the Plan and prior to the Expiration Time, whenever Common
Stock is to be registered under the Securities Act (including pursuant to a
Demand Registration), and the registration form to be used may be used for the
registration of Registrable Shares (a "Piggyback Registration"), the Company
will give an Offering Notice at least 21 days prior to the anticipated filing
date to all holders of Registrable Shares of its intention to effect such a
registration, and the Company will use its best efforts to effect such
registration and will include in such registration all Registrable Shares with
respect to which the Company has received a written request for inclusion
therein within 14 days after the Offering Notice has been given.

                  (c) Priority on Primary Registrations. If a Piggyback
Registration (including, without limitation, the Initial Piggyback Registration)
is a primary Underwritten Offering on behalf of the Company, and the managing
underwriter or underwriters advise the Company in writing that in its or their
opinion it is probable that the inclusion of the number of securities requested
to be included in the registration would adversely affect the marketability of
the shares to be sold in such offering, the Company will include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Shares requested to be included in such registration
which in the opinion of such underwriters can be sold without having such
effect, pro rata among the Holders of such Registrable Shares on the basis of
the number of Registrable Shares owned by such Holders with further successive
pro rata allocations among the Holders of Registrable Shares if any such Holder
has requested the registration of less than all the Registrable Shares it is
entitled to register, and (iii) third, other securities requested to be included
in such registration.

                  (d) Priority on Secondary Registrations. If a Piggyback
Registration is a secondary Underwritten Offering on behalf of holders of the
Company's securities, and the managing underwriter or underwriters advise the
Company in writing that in their opinion it is probable that the inclusion of
the number of securities requested to be included in such registration would
adversely affect the marketability of the shares to be sold in such offering,
the Company will include in such registration the Registrable Shares held by the
Holders requested to be included in such registration and the securities
requested to be included therein by the holders of the Company's securities
requesting such registration (all such Registrable Shares and other securities
requesting such registration being collectively referred to as the "Secondary
Shares") which in the opinion of such underwriters can be sold without having
such effect, pro rata among the holders of such Secondary Shares on the basis of
the number of Secondary Shares owned or deemed to be owned by such holders, with
further successive pro rata allocations among the holders of Secondary Shares if
any such holder of Secondary Shares has requested the registration of less than
all such Secondary Shares it is entitled to register.

                  5.       Holdback Agreements.

                  (a) The Company agrees, if reasonably requested by the
managing underwriter or underwriters, not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to,
and during the 90-day period beginning on, the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten registration or pursuant to a registration
on Form S-4 or S-8 or any successor form or pursuant to any commitment to do so,
condition or otherwise, existing on the date hereof).

                  (b) Each Holder agrees, if reasonably requested by the
managing underwriter or underwriters, not to effect any public sale or
distribution (including pursuant to Rule 144) of any equity securities of the
Company or any securities convertible into or exchangeable or exercisable for
such securities, during the seven days prior to, and during the 90-day period
beginning on, the effective date of any underwritten Piggyback Registration
(which included such Holder's shares) or any underwritten Demand Registration or
Shelf Registration (regardless of whether such registration included such
Holder's Shares).

                  (c) Nothing herein shall prevent a Holder of Registrable
Shares that is a partnership from making a distribution of Registrable Shares to
its partners, a Holder of Registrable Shares that is a trust from making a
distribution of Registrable Shares to its beneficiaries or a Holder of
Registrable Shares that is a corporation from making a distribution of
Registrable Shares to its shareholders. The Holders agree that any such
distribution will be made in accordance with applicable law (including, without
limitation, applicable federal and state securities laws) and that any
distributees of Registrable Shares will take such shares subject to the terms of
this Agreement.

                  6. Registration Procedures. Whenever the Holders of
Registrable Shares have requested that any Registrable Shares be registered
pursuant to the terms of this Agreement, the Company will use its best efforts
to effect the registration and the sale of such Registrable Shares in accordance
with the terms hereof and the intended method of disposition thereof, and
pursuant thereto the Company will as expeditiously as is practicable in
connection with such an offering:

                  (a) prepare and file with the Commission, on any registration
form for which the Company then qualifies and which the Company deems
appropriate, a registration statement with respect to such Registrable Shares
and use its best efforts to cause such registration statement to become
effective as soon as practicable after such filing;

                  (b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until such
time as the Registrable Shares registered thereunder have been disposed of in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement; provided, however, except as required by
the Securities Act and the rules and regulations promulgated thereunder, and
except pursuant to Shelf Registrations under Section 2 hereunder, the Company
shall not be obligated to keep any registration statement effective for a period
in excess of 45 days;

                  (c) furnish to each seller of such Registrable Shares and the
underwriters of the securities being registered such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus)
and such other documents as such seller or underwriters may reasonably request
in order to facilitate the disposition of the Registrable Shares owned by such
seller or the sale of such securities by such underwriters;

                  (d) register or qualify such Registrable Shares under such
other securities laws of such jurisdictions as any seller reasonably requests
and do any and all other acts and things which may be reasonably necessary or
desirable to enable such seller to consummate the public sale or other
disposition in such jurisdictions of the Registrable Shares owned by such
seller; provided, however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it is not then so qualified,
(ii) subject itself to taxation in any such jurisdiction, (iii) consent to
general service of process in any such jurisdiction, or (iv) provide any
undertaking required by such other securities or "blue sky" laws or make any
change in its charter or by-laws that the board of directors of the Company
determines in good faith to be contrary to the best interest of the Company and
its stockholders;

                  (e) cause all such Registrable Shares to be listed on each
securities exchange on which similar securities issued by the Company are then
listed, provided that all applicable listing requirements are satisfied;

                  (f) provide a transfer agent and registrar for all such
Registrable Shares not later than the effective date of such registration
statement;

                  (g) enter into such customary agreements (including
underwriting agreements) and take all such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Registrable
Shares in accordance with the Holders' intended methods of disposition;

                  (h) make available for inspection by any seller of such
Registrable Shares, any underwriter participating in any disposition pursuant to
such registration statement, and any attorney, accountant or other agent
designated by any such seller or underwriter (collectively, the "Inspectors"),
all financial and other records, pertinent corporate documents and properties of
the Company (collectively, the "Records") as shall be reasonably necessary to
exercise their due diligence responsibilities, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such Inspector in connection with such registration
statement (other than those documents subject to the attorney/client or attorney
work product privileges), provided that all such Inspectors be bound by or enter
into confidentiality agreements with the Company in the form reasonably approved
by the Company. Records that the Company determines, in good faith, to be
confidential and that it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless the contents of such Records become publicly
available or the release of such Records is ordered pursuant to a subpoena or
other order from a court or governmental agency of competent jurisdiction or
required pursuant to applicable state or federal law. Each seller of Registrable
Shares agrees that it will, upon learning that disclosure of such Records are
sought by a court or governmental agency, give notice to the Company and allow
the Company, at the Company's expense, to undertake appropriate action to
prevent disclosure of the Records deemed confidential;

                  (i) notify each seller of such Registrable Shares, promptly
after it shall receive notice thereof, of the time when such registration
statement has become effective or a supplement to any prospectus forming a part
of such registration statement has been filed;

                  (j) notify each seller of such Registrable Shares of any
request by the Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;

                  (k) prepare and promptly file with the Commission and promptly
notify each seller of such Registrable Shares of the filing of such amendment or
supplement to such registration statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a prospectus relating
to such securities is required to be delivered under the Securities Act, any
event shall have occurred as the result of which any such prospectus or any
other prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading;

                  (l) advise each seller of such Registrable Shares, promptly
after it shall receive notice or obtain knowledge thereof, of the issuance of
any stop order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any proceeding for
such purpose and promptly use all reasonable efforts to prevent the issuance of
any stop order or to obtain its withdrawal if such stop order should be issued;

                  (m) prior to the filing of any registration statement or
prospectus or any amendment or supplement to such registration statement or
prospectus, furnish a copy thereof to each seller of such Registrable Shares and
refrain from filing any such registration statement, prospectus, amendment or
supplement to which counsel selected b the Holders of a majority of the
Registrable Shares being registered shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the Securities Act or the rules and
regulations thereunder, unless, in the case of an amendment or supplement, in
the opinion of counsel for the Company the filing of such amendment or
supplement is reasonably necessary to protect the Company from any liabilities
under any applicable federal or state law and such filing will not violate
applicable laws; and

                  (n) at the request of the managing underwriter or underwriters
in connection with an underwritten offering, furnish on the date or dates
provided for in the underwriting agreement: (i) an opinion of counsel, addressed
to the underwriters, covering such customary matters as such underwriters may
reasonably request; and (ii) a letter or letters from the independent certified
public accountants of the Company addressed to the underwriters, covering such
customary matters as such underwriters may reasonably request.

                  Each Holder of Registrable Shares agrees that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in paragraph (k) of this Section 6, such Holder shall forthwith discontinue
disposition of Registrable Shares pursuant to the registration statement
covering such Registrable Shares until such Holder's receipt of the copies of
the supplemented or amended prospectus contemplated by paragraph (k) of this
Section 6 and, if so directed by the Company, such Holder shall deliver to the
Company (at the Company's expense) all copies of the prospectus covering such
Registrable Shares current at the time of receipt of such notice.

                  7. Registration Expenses. All expenses incident to the
Company's performance of or compliance with this Agreement, including, but not
limited to, all registration and filing fees, fees and expenses of compliance
with federal, state and foreign securities laws, printing expenses, messenger
and delivery expenses, and fees and disbursements of counsel for the Company and
its independent certified public accountants, underwriters (excluding discounts
and commissions attributable to the Registrable Shares included in such
registration which shall be borne by the holder of such Registrable Shares) and
other Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), will be borne by the Company. In addition, the Company
will pay its internal expenses (including, but not limited to, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit or quarterly review and the expense of any
liability insurance obtained by the Company and the expenses and fees for
listing the securities to be registered on each securities exchange.
Registration Expenses shall not include expenses incurred by the Holders (such
expenses of the Holders shall include, but not be limited to, underwriting
discounts and commissions relating to the Registrable Shares, brokerage fees,
transfer taxes, and the fees and expenses of any counsel, accountants or other
representatives retained by the Holders) which expenses shall be borne by the
Holders.

                  8.       Indemnification.

                  (a) The Company agrees to indemnify, to the fullest extent
permitted by law, each seller of Registrable Shares, its partners, officers,
directors, trustees and beneficiaries and each Person who controls such seller
(within the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses including, but not limited to, reasonable attorneys'
fees except as limited by Section 8(c) caused by any untrue or alleged untrue
statement of a material fact contained in any registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein, in the case of a prospectus, in light
of the circumstances in which they were made, not misleading, except insofar as
the same are caused by or contained in any information furnished in writing to
the Company by such seller expressly for use therein or by such seller's failure
to deliver a copy of the prospectus or any amendments or supplements thereto
after the Company has furnished such seller with a sufficient number of copies
of the same or by the seller's delivery of a prospectus after the Company
notified such seller to discontinue delivery of prospectuses. In connection with
an underwritten offering, the Company, if requested, will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the sellers of Registrable
Shares.

                  (b) In connection with any registration statement in which a
seller of Registrable Shares is participating, each such seller will furnish to
the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the fullest extent permitted by law, will indemnify the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses (including, but not limited to, reasonable attorneys'
fees except as limited by Section 8(c)) resulting from any untrue statement of a
material fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission of a
material fact required to be stated therein or necessary to make the statements
therein, in the case of a prospectus, in light of the circumstances in which
they were made, not misleading, but only to the extent that such untrue
statement or omission is contained in or improperly omitted from, as the case
may be, any information or affidavit so furnished in writing by such seller;
provided that the obligation to indemnify will be several, not joint and
several, among such sellers of Registrable Shares, and the liability of each
such seller of Registrable Shares will be in proportion to, and provided further
that such liability will be limited to, in any event, the net amount received by
such seller from the sale of Registrable Shares pursuant to such registration
statement. In connection with an underwritten offering, each seller of
Registrable Shares will, if requested, agree to indemnify such underwriters,
their officers and directors and each Person who controls such underwriters
(within the meaning of the Securities Act) to the same extent as provided in
this Section 8(b) with respect to the Company.

                  (c) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.

                  (d) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and will survive the transfer of securities. Each
indemnifying party also agrees to make such provisions as are reasonably
requested by any indemnified party for contribution to such party in the event
such indemnifying party's indemnification is unavailable for any reason.

                  9. Compliance with Rule 144. The Company covenants that it
shall file the reports required to be filed by it under the Securities Exchange
Act, and the rules and regulations thereunder so long as the Company is
obligated to file such reports, and it shall take such further action as any
Holder may reasonably request, all to the extent required from time to time to
enable such Holder to sell Registrable Shares without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such Rule may be amended from time to time or (b)
any similar rules or regulations hereafter adopted by the Commission. Upon the
written request of any Holder, the Company shall delivery to such Holder a
written statement as to whether it has complied with such requirements.

                  10. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (A) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.

                  11. Reductions of Registrable Shares in an Offering. In the
event the aggregate number of Registrable Shares to be included in a Demand
Registration or Piggyback Registration is reduced by operation of the terms
hereof to a number less than the number requested by the Holders to be included
in such registration, such aggregate reduction may be allocated among, and borne
by, the Holders in any manner agreed upon by the Holders notwithstanding any
provision herein regarding the manner in which such reduction shall be allocated
among, and borne by, the Holders.

                  12.      Intentionally Omitted.

                  13. Remedies. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.

                  14. Amendments and Waivers. The provisions of this Agreement
may be amended or waived at any time only by the written agreement of the
Company and the Holders of a majority of the Registrable Shares. Any waiver,
permit, consent or approval of any kind or character on the part of any such
holders of any provision or condition of this Agreement must be made in writing
and shall be effective only to the extent specifically set forth in writing. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each Holder of Registrable Shares and the Company. Each Holder acknowledges
that by operation of this paragraph the Holders of a majority of the Registrable
Shares, acting in conjunction with the Company, will have the right and power to
diminish or eliminate all rights pursuant to this Agreement.

                  15. Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto, whether so expressed or
not. In addition and whether or not any express assignment has been made, the
provisions of this Agreement which are for the benefit of purchasers or holders
of Registrable Shares are also for the benefit of, and enforceable by, any
subsequent holder of Registrable Shares, provided that (a) the Company shall be
notified in writing of the assignment and (b) such subsequent holder shall not
have any rights to a Piggyback Registration unless such subsequent holder owns
no less than 10% of the Shares.

                  16. Final Agreement. This Agreement constitutes the final
agreement of the parties concerning the matters referred to herein, and
supersedes all prior agreements and understandings.

                  17. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

                  18. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience of reference only and do not constitute a
part of and shall not be utilized in interpreting this Agreement.

                  19. Notices. any notices required or permitted to be sent
hereunder shall be delivered personally, telecopied (and confirmed) or mailed,
certified mail, return receipt requested, or delivered by overnight courier
service to the following addresses, or such other addresses as shall be given by
notice delivered hereunder, and shall be deemed to have been given upon
delivery, if delivered personally or telecopied, three business days after
mailing, if mailed, or one business day after delivery to the courier, if
delivered by overnight courier service:

                  If to the initial Holders of the Registrable Shares, to the
addresses set forth on Schedule 1 hereto.

                  If to the Holders of Registrable Shares other than the initial
Holders of the Registrable Shares, to the addresses set forth on the stock
record books of the Company.

                  If to the Company, to:

                           Mercury Finance Company
                           100 Field Drive - Suite 340
                           Lake Forest, Illinois  60045
                           Facsimile:  847-295-8785
                           Attention:  Mark Dapier, General Counsel

                  20. Governing Law. The validity, meaning and effect of this
Agreement shall be determined in accordance with the laws of the State of
Illinois applicable to contracts made and to be performed in that state.

                  21. Counterparts and Facsimile Execution. This Agreement may
be executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original, and such counterparts together shall
constitute one instrument. This agreement may be executed by the exchange of
signatures by facsimile transmission. Each party shall receive a duplicate
original of the counterpart copy or copies executed by it and the Company.

                  [Remainder of page intentionally left blank.
                            Signature pages follow.]


<PAGE>

         IN WITNESS WHEREOF, MFN FINANCIAL CORPORATION has caused this
Registration Statement to be duly executed.

                                      MFN FINANCIAL CORPORATION


                                      By:
                                      Title:






<PAGE>

[ADD 10% CREDITORS HERE]


                                                                    Exhibit 99.1

FOR IMMEDIATE RELEASE
                                                        MEDIA CONTACT:
                                                        Jim Fitzpatrick
                                                        The Dilenschneider Group
                                                        312-553-0700


             MERCURY FINANCE REORGANIZATION PLAN CONFIRMED BY COURT

                EMERGENCE FROM CHAPTER 11 EXPECTED IN LATE MARCH


CHICAGO, March 10, 1999 - Mercury Finance Company (OTC BB: MFNNQ) today
announced that the Company's Second Amended Plan of Reorganization has been
confirmed by order of the United States Bankruptcy Court for the Northern
District of Illinois. The plan is expected to take effect in late March.

         The reorganized company will be named MFN Financial Corporation and
will be led by Edward G. Harshfield, who will be appointed chairman and chief
executive officer, as previously announced. A new board of directors will be
installed on the effective date of the reorganization.

         "We are pleased that the lengthy stabilization and reorganization
process has been brought to a conclusion," said William A. Brandt, Jr., the
turnaround specialist who has been serving as president and chief executive
officer. "The debt load of the Company has been significantly reduced in the
process and its exposure to class action litigation has been eliminated.
Relieved of these onerous burdens, Mercury Finance and its employees will now be
in a better position to build for the future."

         The Company's confirmed plan was supported by the committees
representing shareholders, debt holders and class action security claimants. The
plan was accepted by about 97 percent of the shareholders, 100 percent of the
debt holders and about 99 percent of the holders of securities fraud claims who
voted.

         Upon the effective date of the plan, the Company's current shares and
options will be extinguished. New shares will be issued with 95 percent of them
distributed to the senior lenders in return for a substantial reduction of their
debt. The current shareholders will receive a pro rata distribution of five
percent of the new shares, as well as certain warrants entitling them to
purchase additional shares at a price that will be fixed for three to five
years.

         The Company has continued its business operations throughout the
chapter 11 case. It now does business from about 165 offices nationally.

         THE GENERAL SUMMARY OF THE CONFIRMED REORGANIZATION PLAN CONTAINED IN
THIS NEWS RELEASE IS NOT MEANT TO BE COMPLETE. THE FULL TEXT OF THE CONFIRMED
PLAN WILL BE FILED WITH THE U.S. BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS.



© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission