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As filed with the Securities and Exchange Commission on February 23, 2004 
Registration No. 333-111352 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 

Amendment No. 1 
to 
Form S-3 
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 

Principal Financial Group, Inc.

(Exact name of registrant as specified in its charter)	 	Principal Financial Services, Inc.

(Exact name of registrant as specified in its charter)	 	Principal Capital I
Principal Capital II
Principal Capital III
(Exact name of registrant as specified in its charter)	
Delaware
(State or other jurisdiction of incorporation or organization)	 	Iowa
(State or other jurisdiction of incorporation or organization)	 	Delaware
(State or other jurisdiction of incorporation or organization of each registrant)	
 	
42-1520346
(I.R.S. Employer Identification Number)	 	42-1520348
(I.R.S. Employer Identification Number)	 	(Principal Capital I)
20-0440461
(Principal Capital II)
20-0440484
(Principal Capital III)
20-0440504
(I.R.S. Employer Identification Numbers)	
 	
711 High Street
Des Moines, Iowa 50392
(515) 247-5111

(Address, including zip code, and telephone number,
including area code, of registrants’ principal executive offices)	 	711 High Street
Des Moines, Iowa 50392
(515) 247-5111

(Address, including zip code, and telephone number,
including area code, of registrants’ principal executive offices)	 	c/o Principal Financial Group, Inc.
711 High Street
Des Moines, Iowa 50392
(515) 247-5111
(Address, including zip code, and telephone number,
including area code, of registrants’ principal executive offices)	

Please address a copy of all communications to: 
 	 	 	
Karen E. Shaff
Senior Vice President and General Counsel
711 High Street
Des Moines, Iowa 50392
(515) 247-5111	 	Thomas M. Kelly
Debevoise & Plimpton LLP
919 Third Avenue
New York, New York 10022
(212) 909-6000	
(Name, address, including zip code, and telephone number,
including area code, of agent for service of each registrant)	

          Approximate date of commencement of the proposed sale to the public: From time to time after this Registration Statement becomes effective. 

          If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.    o 
          If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.    ☑ 
(continued on next page) 
CALCULATION OF REGISTRATION FEE 

	

Title of each class of		Proposed maximum		Amount of	
securities to be registered		aggregate offering price(1)		registration fee(2)	

Common Stock of Principal Financial Group, Inc., par value $.01 per share(3) 	 	 	 	 	
Debt Securities of Principal Financial Group, Inc.(4) 	 	 	 	 	
Preferred Stock of Principal Financial Group, Inc., par value $.01 per share(5) 	 	 	 	 	
Depositary Shares of Principal Financial Group, Inc.(6) 	 	 	 	 	
Warrants of Principal Financial Group, Inc.(7) 	 	 	 	 	
Purchase Contracts of Principal Financial Group, Inc.(8) 	 	 	 	 	
Purchase Units of Principal Financial Group, Inc.(9) 	 	 	 	 	
Guarantees of Principal Financial Services, Inc.(10) 	 	 	 	 	
Junior Subordinated Debentures of Principal Financial Group, Inc.(11) 	 	 	 	 	
Preferred Securities of Principal Capital I(12) 	 	 	 	 	
Preferred Securities of Principal Capital II(12) 	 	 	 	 	
Preferred Securities of Principal Capital III(12) 	 	 	 	 	
Guarantees with respect to Preferred Securities of Principal Capital I, Principal Capital II and Principal Capital III by Principal Financial Group, Inc.(13) 	 	 	 	 	
	
Total 	 	$3,000,000,000(14)(15) 	 	$242,700(16) 	

          Each of Principal Financial Group, Inc., Principal Financial Services, Inc., Principal Capital I, Principal Capital II and Principal Capital III (the “Registrants”) hereby amend this Registration Statement on such date or dates as may be necessary to delay their effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. 
(footnotes on next page) 

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(continued from previous page) 
          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o 
          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o 
          If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box.     o 

 	(1) 	Estimated solely for the purpose of computing the registration fee pursuant to Rule 457(o) under the Securities Act of 1933 and exclusive of accrued interest and dividends, if any. 	
 		
 	(2) 	The registration fee has been calculated in accordance with Rule 457(o) under the Securities Act of 1933. 	

 	(3) 	Includes Series A Junior Participating Preferred Stock purchase rights. Prior to the occurrence of certain events, such Rights will not be exercisable or evidenced separately from the Common Stock. Subject to note (14) below, there is being registered hereunder an indeterminate number of shares of Common Stock as may be sold from time to time by Principal Financial Group, Inc., including sales upon the exercise of Warrants or delivery upon settlement of Purchase Contracts. Also includes such indeterminate number of shares of Common Stock as may be issued upon conversion of or exchange for any securities being registered hereunder that provide for conversion or exchange into Common Stock. 	

		
 	(4) 	Subject to note (14) below, there is being registered hereunder an indeterminate principal amount of Debt Securities as may be sold from time to time by Principal Financial Group, Inc., including sales upon the exercise of Warrants or delivery upon settlement of Purchase Contracts. Also includes such indeterminate principal amount of Debt Securities as may be issued upon conversion of or exchange for any securities being registered hereunder that provide for conversion or exchange into Debt Securities. 	

		
 	(5) 	Subject to note (14) below, there is being registered hereunder an indeterminate number of shares of Preferred Stock as may be sold from time to time by Principal Financial Group, Inc., including sales upon the exercise of Warrants or delivery upon settlement of Purchase Contracts. Also includes such indeterminate number of shares of Preferred Stock as may be issued upon conversion of or exchange for any securities being registered hereunder that provide for conversion or exchange into Preferred Stock. 	

		
 	(6) 	Subject to note (14) below, there is being registered hereunder an indeterminate number of Depositary Shares to be evidenced by Depositary Receipts issued pursuant to a Deposit Agreement. In the event Principal Financial Group, Inc. elects to offer to the public fractional interests in Debt Securities or shares of the Preferred Stock registered hereunder, Depositary Receipts will be distributed to those persons purchasing such fractional interests and Debt Securities or shares of Preferred Stock, as the case may be, will be issued to the Depositary under the Deposit Agreement. No separate consideration will be received for the Depositary Shares. 	

		
 	(7) 	Subject to note (14) below, there is being registered hereunder an indeterminate amount and number of Warrants as may be sold from time to time by Principal Financial Group, Inc., representing rights to purchase Debt Securities, Preferred Stock or Common Stock. Warrants may be sold separately or with Debt Securities, Preferred Stock or Common Stock or other securities registered hereunder. 	

		
 	(8) 	Subject to note (14) below, there is being registered hereunder an indeterminate amount and number of Purchase Contracts as may be sold from time to time by Principal Financial Group, Inc., representing rights to purchase Debt Securities, Depositary Shares, Warrants, Preferred Stock, Common Stock, Preferred Securities or other property. 	

		
 	(9) 	Subject to note (14) below, there is being registered hereunder an indeterminate amount and number of Purchase Units as may be sold from time to time by Principal Financial Group, Inc., representing ownership of Purchase Contracts and Debt Securities, undivided beneficial ownership interests in Debt Securities, Depositary Shares representing fractional interests in Debt Securities or shares of Preferred Stock or debt obligations of third parties, including U.S. Treasury Securities, or Preferred Securities of Principal Capital I, Principal Capital II or Principal Capital III. 	

		
(10) 	Principal Financial Services, Inc. may guarantee the obligations of Principal Financial Group, Inc. with respect to one or more securities of Principal Financial Group, Inc. being registered hereunder. Pursuant to Rule 457(n) under the Securities Act, no registration fee is required with respect to any such guarantee by Principal Financial Services, Inc. 	

		
(11) 	Subject to note (14) below, there is being registered hereunder an indeterminate principal amount of Junior Subordinated Debentures as may be sold from time to time by Principal Financial Group, Inc. 	

		
(12) 	Subject to note (14) below, there is being registered hereunder an indeterminate number of Preferred Securities as may be sold severally from time to time by Principal Capital I, Principal Capital II and Principal Capital III. 	

		
(13) 	This Registration Statement is deemed to include the obligations of Principal Financial Group, Inc. under the Junior Subordinated Debentures, the related Indenture, the Trust Agreements, the Preferred Securities, the Guarantees by Principal Financial Group, Inc. of the Preferred Securities and the Expense Agreements as described in the Registration Statement. 	

		
(14) 	The Prospectus included herein relates to $3,000,000,000 of securities. Such amount represents the principal amount of any Debt Securities or Junior Subordinated Debentures issued at their principal amount, the issue price rather than the principal amount of any Debt Securities or Junior Subordinated Debentures issued at an original issue discount, the liquidation preference of any Preferred Stock, the amount computed pursuant to Rule 457(c) for any Common Stock, the issue price of any Warrants, the exercise price of any Offered Securities issuable upon the exercise of Warrants and the initial public offering price of any Preferred Securities. Any securities registered hereunder may be sold separately or as units with other securities registered hereunder. 	

		
(15) 	No separate consideration will be received for the Debt Securities, Preferred Stock, Common Stock or the Depositary Shares issuable upon conversion of or in exchange for any securities registered hereunder that provide for conversion or exchange into such securities. No separate consideration will be received for any Junior Subordinated Debentures if issued to evidence a loan by Principal Capital I, Principal Capital II or Principal Capital III to Principal Financial Group, Inc., or for any related Guarantee by Principal Financial Group, Inc. of the Preferred Securities or Expense Agreement. 	

		
(16) 	Fee previously paid. 	

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. 	
SUBJECT TO COMPLETION, DATED FEBRUARY 23, 2004 
PROSPECTUS 
Principal Financial Group, Inc. 
Debt Securities 
Junior Subordinated Debentures 
Preferred Stock 
Common Stock 
Depositary Shares 
Warrants 
Purchase Contracts 
Purchase Units 
Principal Capital I 
Principal Capital II 
Principal Capital III 
Preferred Securities Guaranteed 
as Described in this Prospectus 
and the Accompanying Prospectus Supplement 
by Principal Financial Group, Inc. 
          By this prospectus, we may offer from time to time up to $3,000,000,000 of any combination of the securities described in this prospectus. 
          We will provide specific terms of the securities in supplements to this prospectus. You should read this prospectus and any supplement carefully before you invest. A supplement may also change or update information contained in this prospectus. 
          We will not use this prospectus to confirm sales of any of our securities unless it is attached to a prospectus supplement. 
          Unless we state otherwise in a prospectus supplement, we will not list any of these securities on any securities exchange. 
          Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. They have not made, nor will they make, any determination as to whether anyone should buy these securities. Any representation to the contrary is a criminal offense. 
The date of this prospectus is                     , 2004 

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USE OF PROCEEDS	
RATIOS OF EARNINGS TO FIXED CHARGES	
DESCRIPTION OF GUARANTEE OF PRINCIPAL FINANCIAL SERVICES, INC.	
DESCRIPTION OF THE DEBT SECURITIES	
DESCRIPTION OF CAPITAL STOCK OF PRINCIPAL FINANCIAL GROUP, INC.	
DESCRIPTION OF DEPOSITARY SHARES	
DESCRIPTION OF WARRANTS	
DESCRIPTION OF GUARANTEE BY PRINCIPAL FINANCIAL GROUP, INC. OF THE PREFERRED SECURITIES	
DESCRIPTION OF CORRESPONDING JUNIOR SUBORDINATED DEBENTURES	
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEES BY PRINCIPAL FINANCIAL GROUP, INC. OF THE PREFERRED SECURITIES	
PLAN OF DISTRIBUTION	
LEGAL OPINIONS	
EXPERTS	
WHERE YOU CAN FIND MORE INFORMATION	
INCORPORATION BY REFERENCE	
SIGNATURES	
SIGNATURES	
POWER OF ATTORNEY	
SIGNATURE	
SIGNATURE	
SIGNATURE	
EXHIBIT INDEX	
Form of Senior Indenture	
Form of Subordinated Indenture	
Form of Junior Subordinated Indenture	
Opinion of Debevoise & Plimpton LLP	
Statement Re: Computation of Ratio of Earnings	
Consent of Ernst & Young LLP	
Statement of Eligibility	
Statement of Eligibility	
Statement of Eligibility	

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		Page	
			
ABOUT THIS PROSPECTUS 	 	 	i	 	
FORWARD-LOOKING STATEMENTS 	 	 	ii	 	
PRINCIPAL FINANCIAL GROUP, INC. 	 	 	1	 	
THE PRINCIPAL CAPITAL TRUSTS 	 	 	2	 	
USE OF PROCEEDS 	 	 	4	 	
RATIO OF EARNINGS TO FIXED CHARGES 	 	 	4	 	
DESCRIPTION OF GUARANTEE OF PRINCIPAL FINANCIAL SERVICES, INC. 	 	 	5	 	
DESCRIPTION OF THE DEBT SECURITIES 	 	 	6	 	
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES 	 	 	17	 	
DESCRIPTION OF CAPITAL STOCK OF PRINCIPAL FINANCIAL GROUP, INC. 	 	 	29	 	
DESCRIPTION OF DEPOSITARY SHARES 	 	 	35	 	
DESCRIPTION OF WARRANTS 	 	 	38	 	
DESCRIPTION OF PURCHASE CONTRACTS AND PURCHASE UNITS 	 	 	40	 	
DESCRIPTION OF PREFERRED SECURITIES 	 	 	41	 	
DESCRIPTION OF GUARANTEE BY PRINCIPAL FINANCIAL GROUP, INC. OF THE PREFERRED SECURITIES 	 	 	53	 	
DESCRIPTION OF CORRESPONDING JUNIOR SUBORDINATED DEBENTURES 	 	 	56	 	
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEES BY PRINCIPAL FINANCIAL GROUP, INC. OF THE PREFERRED SECURITIES 	 	 	59	 	
PLAN OF DISTRIBUTION 	 	 	60	 	
LEGAL OPINIONS 	 	 	61	 	
EXPERTS 	 	 	61	 	
WHERE YOU CAN FIND MORE INFORMATION 	 	 	62	 	
INCORPORATION BY REFERENCE 	 	 	62	 	
ABOUT THIS PROSPECTUS 
          This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission utilizing a “shelf” registration process. Under this shelf process, we may sell the securities described in the prospectus from time to time. This prospectus provides you with a general description of the securities we may offer. We may also add, update or change information contained in this prospectus through one or more supplements to this prospectus. Any statement that we make in this prospectus will be modified or superseded by any inconsistent statement made by us in a prospectus supplement. The rules of the Securities and Exchange Commission allow us to incorporate by reference information into this prospectus. This information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the Securities and Exchange Commission will automatically update and supersede this information. See “Incorporation by Reference.” You should read both this prospectus and any prospectus supplement together with additional information described under the heading “Where You Can Find More Information.” 
          No person has been authorized to give any information or to make any representations, other than those contained or incorporated by reference in this prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by Principal Financial Group, Inc., or any underwriter, agent, dealer or remarketing firm. Neither the delivery of this prospectus nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the affairs of Principal Financial Group, Inc. since the date hereof or that the information contained or 

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incorporated by reference herein is correct as of any time subsequent to the date of such information. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. 
          Unless otherwise indicated, or the context otherwise requires, references in this prospectus to “Principal,” “we,” “us” and “our” or similar terms are to Principal Financial Group, Inc. and its subsidiaries. 
FORWARD-LOOKING STATEMENTS 
          Certain of the statements contained in this prospectus or incorporated by reference are forward-looking statements. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include estimates and assumptions related to economic, competitive and legislative developments. These forward-looking statements are subject to change and uncertainty which are, in many instances, beyond our control and have been made based upon management’s expectations and beliefs concerning future developments and their potential effect upon us. There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on us will be those anticipated by management. Actual results could differ materially from those expected by us, depending on the outcome of various factors. These factors include: 
			
 	•	a decline or increased volatility in the securities markets could result in investors withdrawing from the markets or decreasing their rates of investment, either of which could reduce our net income, revenues and assets under management; 	
 		
 	•	our investment portfolio is subject to several risks which may diminish the value of our invested assets and affect our sales, profitability and the investment returns credited to our customers; 	
 		
 	•	competition from companies that may have greater financial resources, broader arrays of products, higher ratings and stronger financial performance may impair our ability to retain existing customers, attract new customers and maintain our profitability; 	
 		
 	•	a downgrade in Principal Life Insurance Company’s (“Principal Life”) financial strength ratings may increase policy surrenders and withdrawals, reduce new sales and terminate relationships with distributors and cause some of our existing liabilities to be subject to acceleration, additional collateral support, changes in terms, or creation of additional financial obligations; 	
 		
 	•	our efforts to reduce the impact of interest rate changes on our profitability and surplus may not be effective; 	
 		
 	•	if we are unable to attract and retain sales representatives and develop new distribution sources, sales of our products and services may be reduced; 	
 		
 	•	our international businesses face political, legal, operational and other risks that could reduce our profitability in those businesses; 	
 		
 	•	our reserves established for future policy benefits and claims may prove inadequate, requiring us to increase liabilities; 	
 		
 	•	our ability to pay stockholder dividends and meet our obligations may be constrained by the limitations on dividends Iowa insurance laws impose on Principal Life; 	
 		
 	•	we may need to fund deficiencies in our closed block (“Closed Block”) assets which benefit only the holders of Closed Block policies; 	
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 	•	changes in laws, regulations or accounting standards may reduce our profitability; 	
 		
 	•	litigation and regulatory investigations may harm our financial strength and reduce our profitability; 	
 		
 	•	fluctuations in foreign currency exchange rates could reduce our profitability; 	
 		
 	•	applicable laws and our stockholder rights plan, certificate of incorporation and by-laws may discourage takeovers and business combinations that our stockholders might consider in their best interests; 	
 		
 	•	a downgrade in our debt ratings may adversely affect our ability to secure funds and cause some of our existing liabilities to be subject to acceleration, additional collateral support, changes in terms, or creation of additional financial obligations; and 	
 		
 	•	the risk factors or uncertainties listed from time to time in any prospectus supplement or any document incorporated into this prospectus by reference. 	
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PRINCIPAL FINANCIAL GROUP, INC. 
          The Principal Financial Group is a leading provider of retirement savings, investment and insurance products and services with $134.8 billion in assets under management and approximately 14.8 million customers worldwide as of September 30, 2003. 
          We focus on providing retirement products and services to businesses and their employees. Based on total plans served in 2002, more employers choose us for their 401(k) plans than any other bank, mutual fund or insurance company in the U.S., according to CFO magazine, April/ May 2003. We also had the leading market share in 2002 within the 401(k) market for businesses with less than 500 employees based on number of plans according to the Spectrem Group. 
          We provide financial products and services through the following four segments: (1) U.S. Asset Management and Accumulation, which provides retirement and related financial products and services primarily to businesses, their employees and other individuals and provides asset management services to our asset accumulation business, the life and health insurance operations, the Corporate and Other segment and third-party clients; (2) International Asset Management and Accumulation, which provides retirement products and services, annuities, long-term mutual funds and life insurance through subsidiaries and joint ventures in various countries; (3) Life and Health Insurance, which provides individual group life insurance, group health insurance and individual and group disability insurance throughout the U.S.; and (4) Mortgage Banking, which originates and services residential mortgage loan products for customers in the U.S. We market these products and services through career agents, brokers, financial institutions, employee-benefit consultants, financial planners, direct marketing to existing customers and a variety of representatives. We also have a Corporate and Other segment, which manages the assets representing capital that has not been allocated to any other segment. 
          Our life insurance in force, net of reinsurance, was $137.8 billion as of December 31, 2002, and $135.3 billion as of December 31, 2001. As of December 31, 2002 and 2001, our total invested assets were $49.0 billion and $44.8 billion, respectively; our separate account assets were $33.5 billion and $34.4 billion, respectively; and our stockholders’ equity was $6.7 billion and $6.8 billion, respectively. Our net income for the years ended December 31, 2002, 2001 and 2000 was $142.3 million, $358.8 million, and $620.2 million, respectively. 
          We were organized as an individual life insurer in 1879, formed a mutual insurance holding company in 1998, and Principal Financial Group, Inc. was organized on April 18, 2001, as a Delaware business corporation. Under the terms of Principal Mutual Holding Company’s Plan of Conversion, Principal Mutual Holding Company converted from a mutual insurance holding company to a stock company subsidiary of Principal Financial Group, Inc., a Delaware business corporation, effective October 26, 2001. All membership interests in Principal Mutual Holding Company were extinguished on that date and eligible policyholders received, in aggregate, 260.8 million shares of common stock, $1,177.5 million of cash, and $472.6 million of policy credits as compensation. 
          In addition, on October 26, 2001, we completed our initial public offering (“IPO”) in which we issued 100.0 million shares of common stock at a price of $18.50 per share, prior to the underwriters’ exercise of the overallotment option. Net proceeds from the IPO were $1,753.9 million, of which $64.2 million was retained by Principal Financial Group, Inc., and $1,689.7 million was contributed to Principal Life principally to fund demutualization compensation to policyholders receiving cash or policy credits and to cover certain expenses related to the demutualization. Proceeds were net of offering costs of $96.5 million and a related tax benefit of $0.4 million. 
          We are an insurance holding company whose assets include all of the outstanding shares of common stock of Principal Financial Services, Inc. Principal Financial Services, Inc., an Iowa business corporation, is an intermediary holding company whose assets include all of the outstanding shares of Principal Life and other subsidiaries. Principal Financial Services, Inc. is a separate and distinct legal entity which has issued debt securities and may issue in the future additional debt securities. Although Principal Financial Services, Inc. may unconditionally guarantee our obligations with respect to one or 
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more securities described in this prospectus, it may be unable to pay any amounts on such guarantee or to provide us with funds for our payment obligations on such securities. Principal Financial Services, Inc.’s ability to pay dividends and meet its obligations, including paying any debt service, depends upon the receipt of dividends from Principal Life. Our ability to pay dividends and meet our obligations, including paying operating expenses and any debt service, depends upon the receipt of dividends from Principal Financial Services, Inc. Iowa insurance laws impose limitations on the ability of Principal Life to pay dividends. 
          The principal executive office for both Principal Financial Group, Inc. and Principal Financial Services, Inc. is located at 711 High Street, Des Moines, Iowa 50392, and the telephone number is (515) 247-5111. 
THE PRINCIPAL CAPITAL TRUSTS 
          We created each trust as a Delaware statutory trust pursuant to a trust agreement. We will enter into an amended and restated trust agreement for each trust, which will state the terms and conditions for the trust to issue and sell its preferred securities and common securities. We will amend and restate each trust agreement in its entirety substantially in the form filed as an exhibit to the registration statement that includes this prospectus. Each trust agreement will be qualified as an indenture under the Trust Indenture Act of 1939, as amended, which we refer to in this prospectus as the “Trust Indenture Act.” 
          Each trust exists for the exclusive purposes of: 
			
 	•	issuing and selling to the public preferred securities, representing undivided beneficial interests in the assets of the trust, 	
 		
 	•	issuing and selling to us common securities, representing undivided beneficial interests in the assets of the trust, 	
 		
 	•	using the proceeds from the sale of the preferred securities and common securities to acquire a corresponding series of junior subordinated deferrable interest debentures, which we refer to in this prospectus as the “corresponding junior subordinated debentures,” 	
 		
 	•	distributing the cash payments it receives from the corresponding junior subordinated debentures it owns to you and the other holders of preferred securities and us, as the holder of common securities, and 	
 		
 	•	engaging in the other activities that are necessary, convenient or incidental to these purposes. 	
          Accordingly, the corresponding junior subordinated debentures will be the sole assets of each trust, and payments under the corresponding junior subordinated debentures and the related expense agreement will be the sole revenue of each trust. 
          We will own all of the common securities of each trust. The common securities of a trust will rank equally with, and payments will be made pro rata with, the preferred securities of the trust, except that if an event of default under a trust agreement then exists, our rights as holder of the common securities to payment of distributions and payments upon liquidation or redemption will be subordinated to your rights as a holder of the preferred securities of the trust. See “Description of Preferred Securities — Subordination of Common Securities.” 
          Unless we state otherwise in a prospectus supplement, each trust has a term of approximately 45 years. A trust may also terminate earlier. The trustees of each trust will conduct its business and affairs. As holder of the common securities we will initially appoint the trustees. Initially, the trustees will be: 
			
 	•	Wilmington Trust Company, which will act as property trustee and as Delaware trustee, and 	
 		
 	•	Two of our employees or officers or those of our affiliates, who will act as administrative trustees. 	
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          Wilmington Trust Company, as property trustee, will act as sole indenture trustee under each trust agreement for purposes of compliance with the provisions of the Trust Indenture Act. Wilmington Trust Company will also act as trustee under the guarantee and the junior subordinated indenture pursuant to which we will issue the junior subordinated debentures. See “Description of Junior Subordinated Debentures” and “Description of Guarantee by Principal Financial Group, Inc. of the Preferred Securities.” 
          The holder of the common securities of a trust, or the holders of a majority in liquidation preference of the preferred securities if an event of default under the trust agreement for the trust has occurred and is continuing, will be entitled to appoint, remove or replace the property trustee and/or the Delaware trustee of the trust. You will not have the right to vote to appoint, remove or replace the administrative trustees. Only we, as the holder of the common securities, will have these voting rights. The duties and obligations of the trustees are governed by the applicable trust agreement. We will pay all fees and expenses related to the trusts and the offering of the preferred securities and will pay, directly or indirectly, all ongoing costs, expenses and liabilities of the trusts, except for payments made on the preferred securities or the common securities, subject to the guarantee. 
          The principal executive office of each trust is 711 High Street, Des Moines, Iowa 50392, Attention: Corporate Secretary and its telephone number is (515) 247-5111. 
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USE OF PROCEEDS 
          Unless we state otherwise in a prospectus supplement, we intend to use the proceeds from the sale of the securities offered by this prospectus, including the corresponding junior subordinated debentures issued to the trusts in connection with their investment of all the proceeds from the sale of preferred securities, for general corporate purposes, including working capital, capital expenditures, investments in subsidiaries, acquisitions and refinancing of debt, including commercial paper and other short-term indebtedness. We will include a more detailed description of the use of proceeds of any specific offering of securities in the prospectus supplement relating to the offering. 
RATIOS OF EARNINGS TO FIXED CHARGES 
          The following table sets forth, for the years and periods indicated, our ratios of: 
			
 	•	earnings to fixed charges before interest credited on investment products; and 	
 		
 	•	earnings to fixed charges. 	
          We calculate the ratio of “earnings to fixed charges before interest credited on investment products” by dividing the sum of income from continuing operations before income taxes (BT), interest expense (I), interest factor of rental expense (IF) less undistributed income from equity investees (E) by the sum of interest expense (I), interest factor of rental expense (IF) and dividends on majority-owned subsidiary redeemable preferred securities (non-intercompany) (D). The formula for this ratio is: (BT+I+IF-E)/(I+IF+D). 
          We calculate the ratio of “earnings to fixed charges” by dividing the sum of income from continuing operations before income taxes (BT), interest expense (I), interest factor of rental expense (IF) less undistributed income from equity investees (E) and the addition of interest credited on investment products (IC) by interest expense (I), interest factor of rental expense (IF), dividends on majority-owned subsidiary redeemable preferred securities (non-intercompany) (D) and interest credited on investment products (IC). The formula for this calculation is: (BT+I+IF-E+IC)/(I+IF+D+IC). “Interest credited on investment products” includes interest paid on guaranteed investment contracts, funding agreements, medium-term notes and other investment-only pension products. Similar to debt, these products have a total fixed return and a fixed maturity date. 

		For the Nine											
		Months											
		Ended			
		September 30,		For the Year Ended December 31,	
					
		2003		2002		2002		2001		2000		1999		1998	
															
Ratio of earnings to fixed charges before interest credited on investment products 	 	 	9.5	 	 	 	7.9	 	 	 	7.2	 	 	 	5.2	 	 	 	7.1	 	 	 	7.2	 	 	 	7.7	 	
Ratio of earnings to fixed charges 	 	 	2.1	 	 	 	1.9	 	 	 	1.8	 	 	 	1.5	 	 	 	1.9	 	 	 	2.1	 	 	 	2.0	 	
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DESCRIPTION OF GUARANTEE OF PRINCIPAL FINANCIAL SERVICES, INC. 
          Principal Financial Services, Inc. may guarantee unconditionally our obligations with respect to any of the following securities as described in the applicable prospectus supplement: 

 	•	senior debt securities, 	

		
 	•	subordinated debt securities, 	

		
 	•	junior subordinated debentures, 	

		
 	•	guarantees by Principal Financial Group, Inc. of the preferred securities, 	

		
 	•	preferred stock, 	

		
 	•	depositary shares, 	

		
 	•	warrants, 	

		
 	•	purchase contracts, or 	

		
 	•	purchase units. 	
		
          If Principal Financial Services, Inc. guarantees these obligations under any such securities, we will tell you in the applicable prospectus supplement and describe the terms of the guarantee in such prospectus supplement. Unless we tell you otherwise in the applicable prospectus supplement, such guarantee will be an unsecured obligation of Principal Financial Services, Inc. and will be enforceable against Principal Financial Services, Inc. without any need to first enforce against Principal Financial Group, Inc. 
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DESCRIPTION OF THE DEBT SECURITIES 
          We may offer unsecured senior debt securities or subordinated debt securities. We refer to the senior debt securities and the subordinated debt securities together in this prospectus as the “debt securities.” The senior debt securities will rank equally with all of our other unsecured, unsubordinated obligations. The subordinated debt securities will be subordinate and junior in right of payment to all of our senior debt. 
          We will issue the senior debt securities in one or more series under an indenture, which we refer to as the “senior indenture,” to be entered into between us and The Bank of New York, as trustee. We will issue subordinated debt securities in one or more series under an indenture, which we refer to as the “subordinated indenture,” between us and The Bank of New York, as trustee. 
          We may from time to time without notice to, or the consent of, the holders of the debt securities, create and issue additional debt securities under the indentures, equal in rank to existing debt securities in all respects (or in all respects except for the payment of interest accruing prior to the issue date of the new debt securities, or except for the first payment of interest following the issue date of the new debt securities) so that the new debt securities may be consolidated and form a single series with existing debt securities and have the same terms as to status, redemption and otherwise as existing debt securities. 
          The following description of the terms of the indentures is a summary. It summarizes only those portions of the indentures which we believe will be most important to your decision to invest in our debt securities. You should keep in mind, however, that it is the indentures, and not this summary, which define your rights as a debtholder. There may be other provisions in the indentures which are also important to you. You should read the indentures for a full description of the terms of the debt. The senior indenture and the subordinated indenture are filed as exhibits to the registration statement that includes this prospectus. See “Where You Can Find More Information” for information on how to obtain copies of the senior indenture and the subordinated indenture. 
The Debt Securities are Unsecured Obligations 
          Our debt securities will be unsecured obligations and our senior debt securities will be unsecured and will rank equally with all of our other senior unsecured and unsubordinated obligations. As a non-operating holding company, we have no significant business operations of our own. Therefore, we rely on dividends from our insurance company and other subsidiaries as the principal source of cash flow to meet our obligations for payment of principal and interest on our outstanding debt obligations and corporate expenses. Accordingly, the debt securities will be effectively subordinated to all existing and future liabilities of our subsidiaries, and you should rely only on our assets for payments on the debt securities. The payment of dividends by Principal Life is limited under the Iowa insurance laws. See “Principal Financial Group, Inc.” 
          Unless we state otherwise in the applicable prospectus supplement, the indentures do not limit us from incurring or issuing other secured or unsecured debt under either of the indentures or any other indenture that we may have entered into or enter into in the future. See “— Subordination under the Subordinated Indenture” and the prospectus supplement relating to any offering of subordinated debt securities. 
Terms of the Debt Securities 
          We may issue the debt securities in one or more series through an indenture that supplements the senior indenture or the subordinated indenture or through a resolution of our board of directors or an authorized committee of our board of directors. 
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          You should refer to the applicable prospectus supplement for the specific terms of the debt securities. These terms may include the following: 
			
 	•	title of the debt securities, 	
 		
 	•	any limit upon the aggregate principal amount of the series, 	
 		
 	•	maturity date(s) or the method of determining the maturity date(s), 	
 		
 	•	interest rate(s) or the method of determining the interest rate(s), 	
 		
 	•	dates on which interest will be payable and circumstances, if any, in which interest may be deferred, 	
 		
 	•	dates from which interest will accrue and the method of determining those dates, 	
 		
 	•	place or places where we may pay principal, premium, if any, and interest and where you may present the debt securities for registration or transfer or exchange, 	
 		
 	•	place or places where notices and demands relating to the debt securities and the indentures may be made, 	
 		
 	•	redemption or early payment provisions, 	
 		
 	•	sinking fund or similar provisions, 	
 		
 	•	authorized denominations if other than denominations of $1,000, 	
 		
 	•	currency, currencies, or currency units, if other than in U.S. dollars, in which the principal of, premium, if any, and interest on the debt securities is payable, or in which the debt securities are denominated, 	
 		
 	•	any additions, modifications or deletions, in the events of default or covenants of Principal Financial Group, Inc. specified in the indenture relating to the debt securities, 	
 		
 	•	if other than the principal amount of the debt securities, the portion of the principal amount of the debt securities that is payable upon declaration of acceleration of maturity, 	
 		
 	•	any additions or changes to the indenture relating to a series of debt securities necessary to permit or facilitate issuing the series in bearer form, registrable or not registrable as to principal, and with or without interest coupons, 	
 		
 	•	any index or indices used to determine the amount of payments of principal of and premium, if any, on the debt securities and the method of determining these amounts, 	
 		
 	•	whether a temporary global security will be issued and the terms upon which these temporary debt securities may be exchanged for definitive debt securities, 	
 		
 	•	whether the debt securities will be issued in whole or in part in the form of one or more global securities, 	
 		
 	•	identity of the depositary for global securities, 	
 		
 	•	appointment of any paying agent(s), 	
 		
 	•	the terms and conditions of any obligation or right we would have or any option you would have to convert or exchange the debt securities into other securities or cash or property of Principal Financial Group, Inc. or any other person and any changes to the indenture to permit or facilitate such conversion or exchange, 	

 	•	in the case of the subordinated indenture, any provisions regarding subordination, 	
		
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 	• 	whether a Principal Financial Services, Inc. guarantee will apply to such debt securities and, if so, the material terms thereof, and 	

		
 	•	any other special terms of such debt securities or related guarantee. 	
		
          Debt securities may also be issued under the indentures upon the exercise of warrants or delivery upon settlement of purchase contracts. See “Description of Warrants” and “Description of Purchase Contracts.” 
Special Payment Terms of the Debt Securities 
          We may issue one or more series of debt securities at a substantial discount below their stated principal amount. These may bear no interest or interest at a rate which at the time of issuance is below market rates. We will describe United States federal tax consequences and special considerations relating to any series in the applicable prospectus supplement. 
          The purchase price of any of the debt securities may be payable in one or more foreign currencies or currency units. The debt securities may be denominated in one or more foreign currencies or currency units, or the principal of, premium, if any, or interest on any debt securities may be payable in one or more foreign currencies or currency units. We will describe the restrictions, elections, United States federal income tax considerations, specific terms and other information relating to the debt securities and any foreign currencies or foreign currency units in the applicable prospectus supplement. 
          If we use any index to determine the amount of payments of principal of, premium, if any, or interest on any series of debt securities, we will also describe in the applicable prospectus supplement the special United States federal income tax, accounting and other considerations applicable to the debt securities. 
Denominations, Registration and Transfer 
          We expect to issue most debt securities in fully registered form without coupons and in denominations of $1,000 and any integral multiple of $1,000. Except as we may describe in the applicable prospectus supplement, debt securities of any series will be exchangeable for other debt securities of the same issue and series, in any authorized denominations, of a like tenor and aggregate principal amount and bearing the same interest rate. 
          You may present debt securities for exchange as described above, or for registration of transfer, at the office of the security registrar or at the office of any transfer agent we designate for that purpose. You will not incur a service charge but you must pay any taxes, assessments and other governmental charges as described in the indentures. We will appoint the trustees as security registrar under the indentures. We may at any time rescind the designation of any transfer agent that we initially designate or approve a change in the location through which the transfer agent acts. We will specify the transfer agent in the applicable prospectus supplement. We may at any time designate additional transfer agents. 
Global Debt Securities 
          We may issue all or any part of a series of debt securities in the form of one or more global securities. We will appoint the depositary holding the global debt securities. Unless we otherwise state in the applicable prospectus supplement, the depositary will be The Depository Trust Company, or DTC. We will issue global securities in registered form and in either temporary or definitive form. Unless it is exchanged for individual debt securities, a global security may not be transferred except: 
			
 	•	by the depositary to its nominee, 	
 		
 	•	by a nominee of the depositary to the depositary or another nominee, or 	
 		
 	•	by the depositary or any nominee to a successor of the depositary, or a nominee of the successor. 	
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          We will describe the specific terms of the depositary arrangement in the applicable prospectus supplement. We expect that the following provisions will generally apply to these depositary arrangements. 
     Beneficial Interests in a Global Security 
          If we issue a global security, the depositary for the global security or its nominee will credit on its book-entry registration and transfer system the principal amounts of the individual debt securities represented by the global security to the accounts of persons that have accounts with it. We refer to those persons as “participants” in this prospectus. The accounts will be designated by the dealers, underwriters or agents for the debt securities, or by us if the debt securities are offered and sold directly by us. Ownership of beneficial interests in a global security will be limited to participants or persons who may hold interests through participants. Ownership and transfers of beneficial interests in the global security will be shown on, and transactions can be effected only through, records maintained by the applicable depositary or its nominee, for interests of participants, and the records of participants, for interests of persons who hold through participants. The laws of some states require that you take physical delivery of securities in definitive form. These limits and laws may impair your ability to transfer beneficial interests in a global security. 
          So long as the depositary or its nominee is the registered owner of a global security, the depositary or nominee will be considered the sole owner or holder of the debt securities represented by the global security for all purposes under the indenture. Except as provided below, you: 
			
 	•	will not be entitled to have any of the individual debt securities represented by the global security registered in your name, 	
 		
 	•	will not receive or be entitled to receive physical delivery of any debt securities in definitive form, and 	
 		
 	•	will not be considered the owner or holder of the debt securities under the indenture. 	
     Payments of Principal, Premium and Interest 
          We will make principal, premium, if any, and interest payments on global securities to the depositary that is the registered holder of the global security or its nominee. The depositary for the global securities will be solely responsible and liable for all payments made on account of your beneficial ownership interests in the global security and for maintaining, supervising and reviewing any records relating to your beneficial ownership interests. 
          We expect that the depositary or its nominee, upon receipt of any principal, premium, if any, or interest payment immediately will credit participants’ accounts with amounts in proportion to their respective beneficial interests in the principal amount of the global security as shown on the records of the depositary or its nominee. We also expect that payments by participants to you, as an owner of a beneficial interest in the global security held through those participants, will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in “street name.” These payments will be the responsibility of those participants. 

	Issuance of Individual Debt Securities	
          Unless we state otherwise in the applicable prospectus supplement, if a depositary for a series of debt securities is at any time unwilling, unable or ineligible to continue as depositary, we will appoint a successor depositary or we will issue individual debt securities in exchange for the global security. In addition, we may at any time and in our sole discretion, subject to any limitations described in the prospectus supplement relating to the debt securities, determine not to have any debt securities represented by one or more global securities. If that occurs, we will issue individual debt securities in exchange for the global security. 
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          Further, we may specify that you may, on terms acceptable to us, the trustee and the depositary, receive individual debt securities in exchange for your beneficial interest in a global security, subject to any limitations described in the prospectus supplement relating to the debt securities. In that instance, you will be entitled to physical delivery of individual debt securities equal in principal amount to that beneficial interest and to have the debt securities registered in your name. Unless we otherwise specify, we will issue those individual debt securities in denominations of $1,000 and integral multiples of $1,000. 
Payment and Paying Agents 
          Unless we state otherwise in an applicable prospectus supplement, we will pay principal of, premium, if any, and interest on your debt securities at the office of the trustee for your debt securities in the City of New York or at the office of any paying agent that we may designate. 
          Unless we state otherwise in an applicable prospectus supplement, we will pay any interest on debt securities to the registered owner of the debt security at the close of business on the record date for the interest, except in the case of defaulted interest. We may at any time designate additional paying agents or rescind the designation of any paying agent. We must maintain a paying agent in each place of payment for the debt securities. 
          Any moneys or U.S. government obligations (including the proceeds thereof) deposited with the trustee or any paying agent, or then held by us in trust, for the payment of the principal of, premium, if any, and interest on any debt security that remain unclaimed for two years after the principal, premium or interest has become due and payable will, at our request, be repaid to us. After repayment to us, you are entitled to seek payment only from us as a general unsecured creditor. 
Redemption 
          Unless we state otherwise in an applicable prospectus supplement, debt securities will not be subject to any sinking fund. 
          Unless we state otherwise in an applicable prospectus supplement, we may, at our option, redeem any series of debt securities after its issuance date in whole or in part at any time and from time to time. We may redeem debt securities in denominations larger than $1,000 but only in integral multiples of $1,000. 

	Redemption Price	
          Except as we may otherwise specify in the applicable prospectus supplement, the redemption price for any debt security which we redeem will equal 100% of the principal amount plus any accrued and unpaid interest up to, but excluding, the redemption date. 

	Notice of Redemption	
          We will mail notice of any redemption of debt securities at least 30 days but not more than 60 days before the redemption date to the registered holders of the debt securities at their addresses as shown on the security register. Unless we default in payment of the redemption price, on and after the redemption date interest will cease to accrue on the debt securities or the portions called for redemption. 
Consolidation, Merger and Sale of Assets 
          We will not consolidate with or merge into any other person or convey, transfer or lease our assets substantially as an entirety to any person, and no person may consolidate with or merge into us, unless: 
			
 	•	we will be the surviving company in any merger or consolidation, 	
 		
 	•	if we consolidate with or merge into another person or convey or transfer our assets substantially as an entirety to any person, the successor person is an entity organized and validly existing under the laws of the United States of America or any state thereof or the 	
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 		District of Columbia, and the successor entity expressly assumes our obligations relating to the debt securities, 	
 		
 	•	immediately after giving effect to the consolidation, merger, conveyance or transfer, there exists no event of default, and no event which, after notice or lapse of time or both, would become an event of default, and 	
 		
 	•	other conditions described in the relevant indenture are met. 	
          This covenant would not apply to the direct or indirect conveyance, transfer or lease of all or any portion of the stock, assets or liabilities of any of our wholly owned subsidiaries to us or to our other wholly owned subsidiaries. In addition, this covenant would not apply to any recapitalization transaction, a change of control of Principal Financial Group, Inc. or a highly leveraged transaction unless such transaction or change of control were structured to include a merger or consolidation by us or the conveyance, transfer or lease of our assets substantially as an entirety. 
Limitations upon Liens 
          The indentures provide that neither we nor any of our restricted subsidiaries, are permitted, directly or indirectly, to, create, issue, assume, incur, guarantee or become liable with respect to any indebtedness for money borrowed which is secured by a lien on any of the present or future common stock of a restricted subsidiary, unless the debt securities, and if we so elect, any of our other indebtedness ranking at least pari passu with the debt securities, shall be secured equally and ratably with, or prior to, such other secured indebtedness for money borrowed so long as it is outstanding. 
          When we use the term “restricted subsidiary,” we mean any subsidiary which is incorporated under the laws of any state of the United States or of the District of Columbia, and which is a regulated insurance company principally engaged in one or more of the life, annuity, property and casualty insurance businesses. However, no subsidiary is a restricted subsidiary: 
			
 	•	if the total assets of that subsidiary are less than 10% of our total assets and the total assets of our consolidated subsidiaries, including that subsidiary, in each case as set forth on the most recent fiscal year-end balance sheets of the subsidiary and us and our consolidated subsidiaries, respectively, and computed in accordance with generally accepted accounting principles, or 	
 		
 	•	if in the judgment of our board of directors, as evidenced by a board resolution, the subsidiary is not material to the financial condition of us and our subsidiaries taken as a whole. 	
Modification and Waiver 

	Modification	
          We and the trustee may modify and amend each indenture with the consent of the holders of a majority in aggregate principal amount of the series of debt securities affected. However, no modification or amendment may, without the consent of the holder of each outstanding debt security affected: 
			
 	•	change the stated maturity of the principal of, or any installment of interest payable on, any outstanding debt security, 	
 		
 	•	reduce the principal amount of, or the rate of interest on or any premium payable upon the redemption of, or the amount of principal of an original issue discount security that would be due and payable upon a redemption or would be provable in bankruptcy, or adversely affect any right of repayment of the holder of, any outstanding debt security, 	
 		
 	•	change the place of payment, or the coin or currency in which any outstanding debt security or the interest on any outstanding debt security is payable, 	
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 	•	impair your right to institute suit for the enforcement of any payment on any outstanding debt security after the stated maturity or redemption date, 	
 		
 	•	reduce the percentage of the holders of outstanding debt securities necessary to modify or amend the applicable indenture, to waive compliance with certain provisions of the applicable indenture or certain defaults and consequences of such defaults or to reduce the quorum or voting requirements set forth in the applicable indenture, 	

 	• 	modify any of these provisions or any of the provisions relating to the waiver of certain past defaults or certain covenants, except to increase the required percentage to effect such action or to provide that certain other provisions may not be modified or waived without the consent of all of the holders of the debt securities affected, 	

		
 	• 	modify the provisions with respect to the subordination of outstanding subordinated debt securities in a manner materially adverse to the holders of such outstanding subordinated debt securities, or 	

		
 	• 	modify the provisions with respect to any outstanding guarantee of any debt securities in a manner materially adverse to the holders of such outstanding debt securities. 	

		
	Waiver	
          The holders of a majority in aggregate principal amount of the outstanding debt securities of a series may, on behalf of the holders of all debt securities of that series, waive compliance by us with certain restrictive covenants of the indenture which relate to that series. 
          The holders of not less than a majority in aggregate principal amount of the outstanding debt securities of a series may, on behalf of the holders of that series, generally waive any past default under the indenture relating to that series of debt securities and the consequences of such default. However, a default in the payment of the principal of, or premium, if any, or any interest on, any debt security of that series or relating to a covenant or provision which under the indenture relating to that series of debt security cannot be modified or amended without the consent of the holder of each outstanding debt security of that series affected cannot be so waived. 
Events of Default 
          Under the terms of each indenture, each of the following constitutes an event of default for a series of debt securities: 
			
 	•	default for 30 days in the payment of any interest when due, 	
 		
 	•	default in the payment of principal, or premium, if any, when due, 	
 		
 	•	default in the performance, or breach, of any covenant or warranty in the indenture for 90 days after written notice, 	
 		
 	•	certain events of bankruptcy, insolvency or reorganization, 	

 	• 	any other event of default described in the applicable board resolution, guarantee or supplemental indenture under which the series of debt securities is issued. 	
		
          We are required to furnish the trustee annually with a statement as to the fulfillment of our obligations under the indenture. Each indenture provides that the trustee may withhold notice to you of any default, except in respect of the payment of principal or interest on the debt securities, if it considers it in the interests of the holders of the debt securities to do so. 

	Effect of an Event of Default	
          If an event of default exists (other than an event of default in the case of certain events of bankruptcy), the trustee or the holders of not less than 25% in aggregate principal amount of a series of 
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outstanding debt securities may declare the principal amount, or, if the debt securities are original issue discount securities, the portion of the principal amount as may be specified in the terms of that series, of the debt securities of that series to be due and payable immediately, by a notice in writing to us, and to the trustee if given by holders. Upon that declaration the principal (or specified) amount will become immediately due and payable. However, at any time after a declaration of acceleration has been made, but before a judgment or decree for payment of the money due has been obtained, the holders of not less than a majority in aggregate principal amount of a series of outstanding debt securities may, subject to conditions specified in the indenture, rescind and annul that declaration. 
          If an event of default in the case of certain events of bankruptcy exists, the principal amount of all debt securities outstanding under the indentures shall automatically, and without any declaration or other action on the part of the trustee or any holder of such outstanding debt, become immediately due and payable. 
          Subject to the provisions of the indentures relating to the duties of the trustee, if an event of default then exists, the trustee will be under no obligation to exercise any of its rights or powers under the indentures (other than the payment of any amounts on the debt securities furnished to it pursuant to the indenture) at your (or any other person’s) request, order or direction, unless you have (or such other person has) offered to the trustee security or indemnity satisfactory to the trustee. Subject to the provisions for the security or indemnification of the trustee, the holders of a majority in aggregate principal amount of a series of outstanding debt securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee in connection with the debt securities of that series. 

	Legal Proceedings and Enforcement of Right to Payment	
          You will not have any right to institute any proceeding in connection with the indentures or for any remedy under the indentures, unless you have previously given to the trustee written notice of a continuing event of default with respect to debt securities of that series. In addition, the holders of at least 25% in aggregate principal amount of a series of the outstanding debt securities must have made written request, and offered security or indemnity satisfactory to the trustee, to the trustee to institute that proceeding as trustee, and, within 60 days following the receipt of that notice, the trustee must not have received from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series a direction inconsistent with that request, and must have failed to institute the proceeding. However, you will have an absolute and unconditional right to receive payment of the principal of, premium, if any, and interest on that debt security on or after the due dates expressed in the debt security (or, in the case of redemption, on or after the redemption date) and to institute a suit for the enforcement of that payment. 
Satisfaction and Discharge 
          Each indenture provides that when, among other things, all debt securities not previously delivered to the trustee for cancellation: 
			
 	•	have become due and payable, 	
 		
 	•	will become due and payable at their stated maturity within one year, or 	
 		
 	•	are to be called for redemption within one year under arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in our name and at our expense, 	
and we deposit or cause to be deposited with the trustee, money or United States government obligations or a combination thereof, as trust funds, in an amount (such amount to be certified in the case of United States government obligations) to be sufficient to pay and discharge the entire indebtedness on the debt securities not previously delivered to the trustee for cancellation, for the principal, and premium, if any, and interest to the date of the deposit or to the stated maturity or redemption date, as the case may be, then the indenture will cease to be of further effect, and we will be deemed to have satisfied and 
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discharged the indenture. However, we will continue to be obligated to pay all other sums due under the indenture and to provide the officers’ certificates and opinions of counsel described in the indenture. 
Defeasance and Covenant Defeasance 
          Unless we state otherwise in the applicable prospectus supplement, each indenture provides that we may discharge all of our obligations, other than as to transfers and exchanges and certain other specified obligations, under any series of the debt securities at any time, and that we may also be released from our obligations described above under “Limitation upon Liens” and “Consolidation, Merger and Sale of Assets” and from certain other obligations, including obligations imposed by supplemental indentures with respect to that series, if any, and elect not to comply with those sections and obligations without creating an event of default. Discharge under the first procedure is called “defeasance” and under the second procedure is called “covenant defeasance.” 
          Defeasance or covenant defeasance may be effected only if: 
			
 	•	we irrevocably deposit with the trustee money or United States government obligations or a combination thereof, as trust funds in an amount certified to be sufficient to pay on the respective stated maturities, the principal of and any premium and interest on, all outstanding debt securities of that series, 	
 		
 	•	we deliver to the trustee an opinion of counsel to the effect that: 	
			
 	•	the holders of the debt securities of that series will not recognize gain or loss for United States federal income tax purposes as a result of the deposit, defeasance and discharge or as a result of the deposit and covenant defeasance, and 	
 		
 	•	the deposit, defeasance and discharge or the deposit and covenant defeasance will not otherwise alter those holders’ United States federal income tax treatment of principal and interest payments on the debt securities of that series, 	
in the case of a defeasance, this opinion must be based on a ruling of the Internal Revenue Service or a change in United States federal income tax law occurring after the date of execution of the applicable indenture, that result would not occur under current tax law, 
			
 	•	no event of default under the indenture has occurred and is continuing, 	
 		
 	•	such defeasance or covenant defeasance does not result in a breach or violation of, or constitute a default under, any indenture or other agreement or instrument for borrowed money to which we are a party or by which we are bound, 	
 		
 	•	such defeasance or covenant defeasance does not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act of 1940 unless such trust shall be registered under the Investment Company Act of 1940 or exempt from registration thereunder, 	
 		
 	•	we deliver to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent with respect to such defeasance or covenant defeasance have been complied with, and 	
 		
 	•	other conditions specified in the indentures are met. 	
          The subordinated indenture will not be discharged as described above if we have defaulted in the payment of principal of, premium, if any, or interest on any senior debt, as defined below under “Subordination under the Subordinated Indenture,” and that default is continuing or another event of default on the senior debt then exists and has resulted in the senior debt becoming or being declared due and payable prior to the date it otherwise would have become due and payable. 
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Conversion or Exchange 
          We may convert or exchange the debt securities into common stock or other securities. If so, we will describe the specific terms on which the debt securities may be converted or exchanged in the applicable prospectus supplement. The conversion or exchange may be mandatory, at your option, or at our option. The applicable prospectus supplement will describe the manner in which the shares of common stock or other securities you would receive would be converted or exchanged. 
Subordination Under the Subordinated Indenture 
          In the subordinated indenture, we have agreed, and holders of subordinated debt will be deemed to have agreed, that any subordinated debt securities are subordinate and junior in right of payment to all senior debt to the extent provided in the subordinated indenture. 
          Upon any payment or distribution of assets to creditors upon any liquidation, dissolution, winding up, reorganization, assignment for the benefit of creditors, marshaling of assets or any bankruptcy, insolvency, debt restructuring or similar proceeding in connection with our insolvency or bankruptcy, the holders of senior debt will first be entitled to receive payment in full of principal of, premium, if any, and interest on the senior debt before the holders of subordinated debt securities will be entitled to receive or retain any payment of the principal of, premium, if any, or interest on the subordinated debt securities. 
          If the maturity of any subordinated debt securities is accelerated, the holders of all senior debt outstanding at the time of the acceleration will first be entitled to receive payment in full of all amounts due, including any amounts due upon acceleration, before you will be entitled to receive any payment of the principal of, premium, if any, or interest on the subordinated debt securities. 
          We will not make any payments of principal of, premium, if any, or interest on the subordinated debt securities or for the acquisition of subordinated debt securities (other than any sinking fund payment) if: 
			
 	•	a default in any payment on senior debt then exists, 	
 		
 	•	an event of default on any senior debt resulting in the acceleration of its maturity then exists, or 	
 		
 	•	any judicial proceeding is pending in connection with default. 	
          When we use the term “debt” we mean, with respect to any person, whether recourse is to all or a portion of the assets of that person and whether or not contingent: 
			
 	•	every obligation of, or any obligation guaranteed by, that person for money borrowed, 	
 		
 	•	every obligation of, or any obligation guaranteed by, that person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses but excluding the obligation to pay the deferred purchase price of any such property, assets or business if payable in full within 90 days from the date such debt was created, 	
 		
 	•	every capital lease obligation of that person, 	
 		
 	•	leases of property or assets made as part of any sale and lease-back transaction to which that person is a party, and 	
 		
 	•	any amendments, renewals, extensions, modifications and refundings of any such debt. 	
          The term “debt” does not include trade accounts payable or accrued liabilities arising in the ordinary course of business. 
          When we use the term “senior debt” we mean the principal of, premium, if any, and interest on debt, whether incurred on, prior to, or after the date of the subordinated indenture, unless the instrument creating or evidencing that debt or pursuant to which that debt is outstanding states that those obligations 
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are not superior in right of payment to the subordinated debt securities or to other debt which ranks equally with, or junior to, the subordinated debt securities. Interest on this senior debt includes interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to Principal Financial Group, Inc., whether or not the claim for post-petition interest is allowed in that proceeding. 
          However, senior debt will not include: 
			
 	•	any debt of Principal Financial Group, Inc. which when incurred and without regard to any election under Section 1111(b) of the Bankruptcy Code, was without recourse to Principal Financial Group, Inc., 	
 		
 	•	any debt of Principal Financial Group, Inc. to any of its subsidiaries, 	
 		
 	•	debt to any employee of Principal Financial Group, Inc. or any of its subsidiaries, 	
 		
 	•	any liability for taxes, 	
 		
 	•	indebtedness or other monetary obligations to trade creditors or assumed by Principal Financial Group, Inc. or any of its subsidiaries in the ordinary course of business in connection with the obtaining of goods, materials or services, and 	
 		
 	•	the subordinated debt securities. 	
          The subordinated indenture does not limit the amount of additional senior debt that we may incur. We expect from time to time to incur additional senior debt. 
          The subordinated indenture provides that we may change the subordination provisions relating to any particular issue of subordinated debt securities prior to issuance. We will describe any change in the prospectus supplement relating to the subordinated debt securities. 
Governing Law 
          The indentures and the debt securities will be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof. 
Concerning the Trustees 
          The trustee under each indenture will have all the duties and responsibilities of an indenture trustee specified in the Trust Indenture Act. Neither trustee is required to expend or risk its own funds or otherwise incur financial liability in performing its duties or exercising its rights and powers if it reasonably believes that it is not reasonably assured of repayment or adequate indemnity. 
          Each of the trustees acts as depositary for funds of, makes loans to, and performs other services for, us and our subsidiaries in the normal course of business. 
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DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES 
          We will issue the junior subordinated debentures in one or more series under a junior subordinated indenture to be entered into between us and Wilmington Trust Company, as debenture trustee. 
          The following description of the terms of the junior subordinated debentures is a summary. It summarizes only those terms of the junior subordinated debentures which we believe will be most important to your decision to invest in our junior subordinated debentures. You should keep in mind, however, that it is the junior subordinated indenture, and not this summary, which defines your rights as a holder of our junior subordinated debentures. There may be other provisions in the junior subordinated indenture which are also important to you. You should read the junior subordinated indenture for a full description of the terms of the junior subordinated debentures. The junior subordinated indenture is filed as an exhibit to the registration statement that includes this prospectus. See “Where You Can Find More Information” for information on how to obtain a copy of the junior subordinated indenture. 
Ranking of the Junior Subordinated Debentures 
          Each series of junior subordinated debentures will rank equally with all other series of junior subordinated debentures, and will be unsecured and subordinate and junior in right of payment, as described in the junior subordinated indenture, to all of our senior debt as defined in the junior subordinated indenture, which includes all debt issued under our senior indenture or subordinated indenture. See “— Subordination.” 
          As a non-operating holding company, we have no significant business operations of our own. Therefore, we rely on dividends from our insurance company and other subsidiaries as the principal source of cash flow to meet our obligations for payment of principal and interest on our outstanding debt obligations and corporate expenses. Accordingly, the junior subordinated debentures will be effectively subordinated to all existing and future liabilities of our subsidiaries, and you should rely only on our assets for payments on the junior subordinated debentures. The payment of dividends by Principal Life is limited under the Iowa insurance laws. See “Principal Financial Group, Inc.” 
          Unless we state otherwise in the applicable prospectus supplement, the junior subordinated indenture does not limit us from incurring or issuing other secured or unsecured debt under the junior subordinated indenture or any other indenture that we may have entered into or enter into in the future. See “— Subordination” and the prospectus supplement relating to any offering of securities. 
Terms of the Junior Subordinated Debentures 
          We may issue the junior subordinated debentures in one or more series through an indenture that supplements the junior subordinated indenture or through a resolution of our board of directors or an authorized committee of our board of directors. 
          You should refer to the applicable prospectus supplement for the specific terms of the junior subordinated debentures. These may include: 
			
 	•	the title and any limit upon the aggregate principal amount, 	
 		
 	•	the date(s) on which the principal is payable or the method of determining those date(s), 	
 		
 	•	the interest rate(s) or the method of determining these interest rate(s), 	
 		
 	•	the date(s) on which interest will be payable or the method of determining these date(s), 	
 		
 	•	the circumstances in which interest may be deferred, if any, 	
 		
 	•	the regular record date or the method of determining this date, 	
 		
 	•	the place or places where we may pay principal, premium, if any, and interest, 	
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 	•	conversion or exchange provisions, if any, 	
 		
 	•	the redemption or early payment provisions, 	
 		
 	•	the authorized denominations, 	
 		
 	•	the currency, currencies or currency units in which we may pay the purchase price for, the principal of, premium, if any, and interest on the junior subordinated debentures, 	
 		
 	•	additions to or changes in the events of default or any changes in any of our covenants specified in the junior subordinated indenture, 	
 		
 	•	any index or indices used to determine the amount of payments of principal and premium, if any, or the method of determining these amounts, 	

 	• 	whether a temporary global security will be issued and the terms upon which you may exchange a temporary global security for definitive junior subordinated debentures, 	

		
 	• 	whether we will issue the junior subordinated debentures, in whole or in part, in the form of one or more global securities, 	

		
 	• 	the terms and conditions of any obligation or right we would have to convert or exchange the junior subordinated debentures into preferred securities or other securities, 	

		
 	• 	whether a Principal Financial Services, Inc. guarantee will apply to such junior subordinated debentures and, if so, the material terms thereof, and 	

		
 	•	any other special terms of such junior subordinated debentures or related guarantee. 	
		
Special Payment Terms of the Junior Subordinated Debentures 
          We may issue junior subordinated debentures at a substantial discount below their stated principal amount, bearing no interest or interest at a rate which at the time of issuance is below market rates. We will describe United States federal income tax consequences and special considerations relating to any junior subordinated debentures in the applicable prospectus supplement. 
          The purchase price of any of the junior subordinated debentures may be payable in one or more foreign currencies or currency units. The junior subordinated debentures may be denominated in one or more foreign currencies or currency units, or the principal of, premium, if any, or interest on any junior subordinated debentures may be payable in one or more foreign currencies or currency units. We will describe the restrictions, elections, United States federal income tax considerations, specific terms and other information relating to the junior subordinated debentures and the foreign currency units in the applicable prospectus supplement. 
          If we use any index to determine the amount of payments of principal of, premium, if any, or interest on any series of junior subordinated debentures, we will also describe special United States federal income tax, accounting and other considerations relating to the junior subordinated debentures in the applicable prospectus supplement. 
Denominations, Registration and Transfer 
          Unless we state otherwise in the applicable prospectus supplement, we will issue the junior subordinated debentures only in registered form without coupons in denominations of $25 and any integral multiple of $25. Junior subordinated debentures of any series will be exchangeable for other junior subordinated debentures of the same issue and series, of any authorized denomination of a like aggregate principal amount, of the same original issue date and stated maturity and bearing the same interest rate. 
          You may present junior subordinated debentures for exchange as described above, or for registration of transfer, at the office of the securities registrar or at the office of any transfer agent we designate for that purpose. You will not incur a service charge but you must pay any taxes and other 
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governmental charges as described in the junior subordinated indenture. We will appoint the debenture trustee as securities registrar under the junior subordinated indenture. We may at any time rescind the designation of any transfer agent that we initially designate or approve a change in the location through which the transfer agent acts. We must maintain a transfer agent in each place of payment. We will specify the transfer agent in the applicable prospectus supplement. We may at any time designate additional transfer agents. 
          If we redeem any junior subordinated debentures, neither we nor the debenture trustee will be required to: 
			
 	•	issue, register the transfer of, or exchange junior subordinated debentures during a period beginning at the opening of business 15 days before the day of selection for redemption of the junior subordinated debentures and ending at the close of business on the day of mailing of the relevant notice of redemption, or 	
 		
 	•	transfer or exchange any junior subordinated debentures selected for redemption, except for any portion not redeemed of any junior subordinated debenture that is being redeemed in part. 	
Global Junior Subordinated Debentures 
          We may issue a series of junior subordinated debentures in the form of one or more global junior subordinated debentures. We will identify the depositary holding the global junior subordinated debentures in the applicable prospectus supplement. We will issue global junior subordinated debentures only in fully registered form and in either temporary or permanent form. Unless it is exchanged for an individual junior subordinated debenture, a global junior subordinated debenture may not be transferred except: 
			
 	•	by the depositary to its nominee, 	
 		
 	•	by a nominee of the depositary to the depositary or another nominee, or 	
 		
 	•	by the depositary or any nominee to a successor depositary, or any nominee of the successor. 	
          We will describe the specific terms of the depositary arrangement in the applicable prospectus supplement. We expect that the following provisions will generally apply to these depositary arrangements. 

	Beneficial Interests in a Global Junior Subordinated Debenture	
          If we issue a global junior subordinated debenture, the depositary for the global junior subordinated debenture or its nominee will credit on its book-entry registration and transfer system the principal amounts of the individual junior subordinated debentures represented by the global junior subordinated debenture to the accounts of persons that have accounts with it. We refer to those persons as “participants” in this prospectus. The accounts will be designated by the dealers, underwriters or agents for the junior subordinated debentures, or by us if the junior subordinated debentures are offered and sold directly by us. Ownership of beneficial interests in a global junior subordinated debenture will be limited to participants or persons that may hold interests through participants. Ownership and transfers of beneficial interests in the global junior subordinated debenture will be shown on, and effected only through, records maintained by the applicable depositary or its nominee, for interests of participants, and the records of participants, for interests of persons who hold through participants. The laws of some states require that you take physical delivery of securities in definitive form. These limits and laws may impair your ability to transfer beneficial interests in a global junior subordinated debenture. 
          So long as the depositary or its nominee is the registered owner of the global junior subordinated debenture, the depositary or the nominee will be considered the sole owner or holder of the junior 
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subordinated debentures represented by the global junior subordinated debenture for all purposes under the junior subordinated indenture. Except as provided below, you: 
			
 	•	will not be entitled to have any of the individual junior subordinated debentures represented by the global junior subordinated debenture registered in your name, 	
 		
 	•	will not receive or be entitled to receive physical delivery of any junior subordinated debentures in definitive form, and 	
 		
 	•	will not be considered the owner or holder of the junior subordinated debenture under the junior subordinated indenture. 	

	Payments of Principal, Premium and Interest	
          We will make principal, premium and interest payments on global junior subordinated debentures to the depositary that is the registered holder of the global junior subordinated debenture or its nominee. The depositary for the junior subordinated debentures will be solely responsible and liable for all payments made on account of your beneficial ownership interests in the global junior subordinated debenture and for maintaining, supervising and reviewing any records relating to your beneficial ownership interests. 
          We expect that the depositary or its nominee, upon receipt of principal, premium or interest payments, immediately will credit participants’ accounts with amounts in proportion to their respective beneficial interests in the principal amount of the global junior subordinated debenture as shown on the records of the depositary or its nominee. We also expect that payments by participants to you, as an owner of a beneficial interest in the global junior subordinated debenture held through those participants, will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in “street name.” These payments will be the responsibility of those participants. 

	Issuance of Individual Junior Subordinated Debentures	
          Unless we state otherwise in the applicable prospectus supplement, if a depositary for a series of junior subordinated debentures is at any time unwilling, unable or ineligible to continue as depositary, we will issue individual junior subordinated debentures in exchange for the global junior subordinated debenture. In addition, we may at any time and in our sole discretion, subject to any limitations described in the prospectus supplement relating to the junior subordinated debentures, determine not to have any junior subordinated debentures represented by one or more global junior subordinated debentures. If that occurs, we will issue individual junior subordinated debentures in exchange for the global junior subordinated debenture. 
          Further, we may specify that you may, on terms acceptable to us, the debenture trustee and the depositary for the global junior subordinated debenture, receive individual junior subordinated debentures in exchange for your beneficial interest in a global junior subordinated debenture, subject to any limitations described in the prospectus supplement relating to the junior subordinated debentures. In that instance, you will be entitled to physical delivery of individual junior subordinated debentures equal in principal amount to that beneficial interest and to have the junior subordinated debentures registered in your name. Unless we otherwise specify, those individual junior subordinated debentures will be issued in denominations of $25 and integral multiples of $25. 
Payment and Paying Agents 
          Unless we state otherwise in the applicable prospectus supplement, we will pay principal of, premium, if any, and interest on your junior subordinated debentures at the office of the debenture trustee or at the office of any paying agent that we may designate. 
          Unless we state otherwise in the applicable prospectus supplement, we will pay any interest on junior subordinated debentures to the registered owner of the junior subordinated debenture at the close of 
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business on the regular record date for the interest, except in the case of defaulted interest. We may at any time designate additional paying agents or rescind the designation of any paying agent. We must maintain a paying agent in each place of payment for the junior subordinated debentures. 
          Any moneys deposited with the debenture trustee or any paying agent, or then held by us in trust, for the payment of the principal of, premium, if any, and interest on any junior subordinated debenture that remain unclaimed for two years after the principal, premium or interest has become due and payable will, at our request, be repaid to us. After repayment to us, you are entitled to seek payment only from us as a general unsecured creditor. 
Redemption 
          Unless we state otherwise in the applicable prospectus supplement, junior subordinated debentures will not be subject to any sinking fund. 
          We may, at our option, redeem any series of junior subordinated debentures after its issuance date in whole or in part at any time and from time to time. We may redeem junior subordinated debentures in denominations larger than $25 but only in integral multiples of $25. 
     Redemption Price 
          Except as we may otherwise specify in the applicable prospectus supplement, the redemption price for any junior subordinated debenture redeemed will equal any accrued and unpaid interest to the redemption date, plus the greater of: 
			
 	•	the principal amount, and 	
 		
 	•	an amount equal to: 	
			
 	•	for junior subordinated debentures bearing interest at a fixed rate, the discounted remaining fixed amount payments, calculated as described below, or 	
 		
 	•	for junior subordinated debentures bearing interest determined by reference to a floating rate, the discounted swap equivalent payments, calculated as described below. 	
          The discounted remaining fixed amount payments will equal the sum of the current values of the amounts of interest and principal that would have been payable by us on each interest payment date after the redemption date and at stated maturity of the final payment of principal. This calculation will take into account any required sinking fund payments, but will otherwise assume that we have not redeemed the junior subordinated debenture prior to the stated maturity. 
          The current value of any amount is the present value of that amount on the redemption date after discounting that amount on a monthly, quarterly or semiannual basis, whichever corresponds to the interest payment date periods of the related series of junior subordinated debentures, from the originally scheduled date for payment. We will use the treasury rate to calculate this present value. 
          The treasury rate is a per annum rate, expressed as a decimal and, in the case of United States Treasury bills, converted to a per annum yield, determined on the redemption date to be the per annum rate equal to the semiannual bond equivalent yield to maturity, adjusted to reflect monthly or quarterly compounding in the case of junior subordinated debentures having monthly or quarterly interest payment dates for United States Treasury securities maturing at the stated maturity of the final payment of principal of the junior subordinated debentures redeemed. We will determine this rate by reference to the weekly average yield to maturity for United States Treasury securities maturing on that stated maturity if reported in the most recent Statistical Release H.15(519) of the Board of Governors of the Federal Reserve. If no such securities mature at the stated maturity, we will determine the rate by interpolation between the most recent weekly average yields to maturity for two series of United States Treasury securities, (1) one maturing as close as possible to, but earlier than, the stated maturity and (2) the other 
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maturing as close as possible to, but later than, the stated maturity, in each case as published in the most recent Statistical Release H.15(519) of the Board of Governors of the Federal Reserve. 
          The discounted swap equivalent payments will equal the sum of: 
			
 	•	the current value of the amount of principal that would have been payable by us pursuant to the terms of the junior subordinated debenture at the stated maturity of the final payment of the principal of the junior subordinated debentures. This calculation will take into account any required sinking fund payments but will otherwise assume that we had not redeemed the junior subordinated debenture prior to the stated maturity, and 	
 		
 	•	the sum of the current values of the fixed rate payments that leading interest rate swap dealers would require to be paid by an assumed fixed rate payer having the same credit standing as ours against floating rate payments to be made by these leading dealers equal to the interest payments on the junior subordinated debentures being redeemed, taking into account any required sinking fund payment, but otherwise assuming we had not redeemed the junior subordinated debenture prior to the stated maturity, under a standard interest rate swap agreement having a notional principal amount equal to the principal amount of the junior subordinated debentures, a termination date set at the stated maturity of the junior subordinated debentures and payment dates for both fixed and floating rate payers set at each interest payment date of the junior subordinated debentures. The amount of the fixed rate payments will be based on quotations received by the trustee, or an agent appointed for that purpose, from four leading interest rate swap dealers or, if quotations from four leading interest rate swap dealers are not obtainable, three leading interest rate swap dealers. 	
     Special Event Redemption 
          Unless we state otherwise in the applicable prospectus supplement, if a special event relating to a series of junior subordinated debentures then exists, we may, at our option, redeem the series of junior subordinated debentures in whole, but not in part, on any date within 90 days of the special event occurring. The redemption price will equal the principal amount of the junior subordinated debentures then outstanding plus accrued and unpaid interest to the date fixed for redemption. 
          A “special event” means a “tax event” or an “investment company event.” A “tax event” occurs when a trust receives an opinion of counsel experienced in these matters to the effect that, as a result of any amendment to, or change, including any announced prospective change in, the laws or regulations of the United States or any political subdivision or taxing authority affecting taxation, or as a result of any official administrative pronouncement or judicial decision interpreting or applying those laws or regulations, which amendment or change is effective or pronouncement or decision is announced on or after the date of issuance of the preferred securities of a trust, there is more than an insubstantial risk that: 
			
 	•	the trust is, or will be within 90 days of that date, subject to United States federal income tax with respect to income received or accrued on the corresponding series of junior subordinated debentures; 	
 		
 	•	interest payable by us on the series of junior subordinated debentures is not, or within 90 days of that date, will not be, deductible, in whole or in part, for United States federal income tax purposes; or 	
 		
 	•	the trust is, or will be within 90 days of that date, subject to more than a de minimis amount of other taxes, duties or other governmental charges. 	
          An “investment company event” occurs when, in respect of a trust, there is a change in law or regulation, or a change in interpretation or application of law or regulation, by any legislative body, court, governmental agency or regulatory authority such that such trust is or will be considered an “investment company” that is required to be registered under the Investment Company Act of 1940, which change becomes effective on or after the date of issuance of the preferred securities of a trust. 
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     Notice of Redemption 
          We will mail notice of any redemption of your junior subordinated debentures at least 30 days but not more than 60 days before the redemption date to you at your registered address. Unless we default in payment of the redemption price, on and after the redemption date interest will cease to accrue on the junior subordinated debentures or the portions called for redemption. 
Option to Extend Interest Payment Date 
          If provided in the applicable prospectus supplement, we will have the right during the term of any series of junior subordinated debentures to extend the interest payment period for a specified number of interest payment periods, subject to the terms, conditions and covenants specified in the prospectus supplement. However, we may not extend these interest payments beyond the maturity of the junior subordinated debentures. We will describe the United States federal income tax consequences and special considerations relating to any junior subordinated debentures in the applicable prospectus supplement. 
          If we exercise this right, during the extension period we and our subsidiaries may not: 
			
 	•	declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment on, any of our capital stock, or 	
 		
 	•	make any payment of principal, premium, if any, or interest on or repay, repurchase or redeem any debt securities that rank equally with or junior in interest to the junior subordinated debentures or make any related guarantee payments, 	
other than: 
			
 	•	dividends or distributions on our common stock, 	
 		
 	•	redemptions or purchases of any rights pursuant to our rights plan, or any successor to our rights plan, and the declaration of a dividend of these rights in the future, and 	
 		
 	•	payments under any guarantee. 	
Modification of Indenture 
          We and the debenture trustee may, without the consent of the holders of junior subordinated debentures, amend, waive or supplement the junior subordinated indenture for specified purposes, including, among other things, curing ambiguities, defects or inconsistencies. However, no action may materially adversely affect the interests of holders of any series of junior subordinated debentures or, in the case of corresponding junior subordinated debentures, the holders of the corresponding series of preferred securities so long as they remain outstanding. We may also amend the junior subordinated indenture to maintain the qualification of the junior subordinated indenture under the Trust Indenture Act. 
          We and the debenture trustee may, with the consent of the holders of not less than a majority in principal amount of the series of junior subordinated debentures affected, modify the junior subordinated indenture in a manner affecting the rights of the holders of junior subordinated debentures. However, no modification may, without the consent of the holder of each outstanding junior subordinated debenture affected: 
			
 	•	change the stated maturity of the junior subordinated debentures, 	
 		
 	•	reduce the principal amount of the junior subordinated debentures, 	
 		
 	•	reduce the rate or, except as permitted by the junior subordinated indenture and the terms of the series of junior subordinated debentures, extend the time of payment of interest on the junior subordinated debentures, or 	
 		
 	•	reduce the percentage of principal amount of the junior subordinated debentures, the holders of which are required to consent to the modification of the junior subordinated indenture. 	
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          In the case of corresponding junior subordinated debentures, so long as any of the corresponding series of preferred securities remain outstanding: 
			
 	•	no such modification may be made that adversely affects the holders of the preferred securities, 	
 		
 	•	no termination of the junior subordinated indenture may occur, and 	
 		
 	•	no waiver of any debenture event of default or compliance with any covenant under the junior subordinated indenture may be effective, 	
without the prior consent of the holders of at least a majority of the aggregate liquidation preference of the preferred securities unless the principal of the corresponding junior subordinated debentures and all accrued and unpaid interest on the corresponding junior subordinated debentures have been paid in full and other conditions are satisfied. 
          In addition, we and the debenture trustee may execute, without your consent, any supplemental indenture for the purpose of creating any new series of junior subordinated debentures. 
Debenture Events of Default 
          Under the terms of the junior subordinated indenture, each of the following constitutes a debenture event of default for a series of junior subordinated debentures: 
			
 	•	failure for 30 days to pay any interest on the series of junior subordinated debentures when due, subject to the deferral of any due date in the case of an extension period, 	
 		
 	•	failure to pay any principal or premium, if any, on the series of junior subordinated debentures when due, including at maturity, upon redemption or by declaration, 	
 		
 	•	failure to observe or perform in any material respect specified other covenants contained in the junior subordinated indenture for 90 days after written notice from the debenture trustee or the holders of at least 25% in principal amount of the relevant series of outstanding junior subordinated debentures, 	
 		
 	•	our bankruptcy, insolvency or reorganization, or 	

 	• 	any other event of default described in the applicable board resolution, guarantee or supplemental indenture under which the series of debt securities is issued. 	
		
     Effect of Event of Default 
          The holders of a majority in outstanding principal amount of the series of junior subordinated debentures have the right to direct the time, method and place of conducting any proceeding for any remedy available to the debenture trustee. The debenture trustee or the holders of not less than 25% in aggregate outstanding principal amount of the series of junior subordinated debentures may declare the principal due and payable immediately upon a debenture event of default. In the case of corresponding junior subordinated debentures, if the debenture trustee or the holders of the corresponding junior subordinated debentures fail to make this declaration, the holders of at least 25% in aggregate liquidation preference of the corresponding series of preferred securities will have that right. 
     Waiver of Event of Default 
          The holders of a majority in aggregate outstanding principal amount of the series of junior subordinated debentures may rescind and annul the declaration and its consequences if: 
			
 	•	the event of default is other than our non-payment of the principal of the junior subordinated debentures which has become due solely by such acceleration and all other events of default have been cured or waived, and 	
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 	•	we have paid or deposited with the debenture trustee a sum sufficient to pay: 	
			
 	•	all overdue installments of interest (including interest on overdue installments of interest) and principal (and premium, if any) due other than by acceleration, and 	
 		
 	•	certain amounts owing to the debenture trustee, its agents and counsel. 	
          The holders of a majority in aggregate outstanding principal amount of the junior subordinated debentures affected by the default may, on behalf of the holders of all the junior subordinated debentures, waive any past default and its consequences, except: 
			
 	•	a default in the payment of principal (or premium, if any) or interest, and 	
 		
 	•	a default relating to a covenant or provision which under the junior subordinated indenture cannot be modified or amended without the consent of the holder of each outstanding junior subordinated debenture. 	
          We are required under the junior subordinated indenture to file annually with the junior subordinated indenture trustee a certificate of compliance. 
     Direct Actions by Preferred Securityholders 
          If a debenture event of default is attributable to our failure to pay interest or principal on the corresponding junior subordinated debentures on the date the interest or principal is payable, you, as a holder of preferred securities, may institute a legal proceeding directly against us or any guarantor, which we refer to in this prospectus as a “direct action,” for enforcement of payment to you of the principal of or interest on the corresponding junior subordinated debentures having a principal amount equal to the aggregate liquidation amount of your related preferred securities. 
          We may not amend the junior subordinated indenture to remove the right to bring a direct action without the prior written consent of the holders of all of the preferred securities. If the right to bring a direct action is removed, the applicable issue may become subject to the reporting obligations under the Securities Exchange Act of 1934. We have the right under the junior subordinated indenture to set-off any payment made to you as a holder of preferred securities by us in connection with a direct action. You will not be able to exercise directly any other remedy available to holders of the corresponding junior subordinated debentures. 
          You will not be able to exercise directly any remedies other than those described in the preceding paragraph available to holders of the junior subordinated debentures unless there has been an event of default under the trust agreement. 
Consolidation, Merger, Sale of Assets and Other Transactions 
          We will not consolidate with or merge into any other corporation or convey, transfer or lease our properties and assets substantially as an entirety to any person, and no person will consolidate with or merge into us or convey, transfer or lease its properties and assets substantially as an entirety to us, unless: 
			
 	•	if we consolidate with or merge into another corporation or convey or transfer our properties and assets substantially as an entirety to any person, the successor corporation is organized under the laws of the United States or any state or the District of Columbia, and the successor corporation expressly assumes our obligations relating to the junior subordinated debentures, 	
 		
 	•	immediately after giving effect to the consolidation, merger, conveyance or transfer, there exists no debenture event of default, and no event which, after notice or lapse of time or both, would become a debenture event of default, 	
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 	•	in the case of corresponding junior subordinated debentures, the transaction is permitted under the related trust agreement or guarantee and does not give rise to any breach or violation of the related trust agreement or guarantee, and 	
 		
 	•	other conditions described in the junior subordinated indenture are met. 	
          The general provisions of the junior subordinated indenture do not protect you against transactions, such as a highly leveraged transaction, that may adversely affect you. 
Satisfaction and Discharge 
          The junior subordinated indenture provides that when, among other things, all junior subordinated debentures not previously delivered to the debenture trustee for cancellation: 
			
 	•	have become due and payable, or 	
 		
 	•	will become due and payable at their stated maturity within one year, 	
and we deposit or cause to be deposited with the debenture trustee, in trust, an amount in the currency or currencies in which the junior subordinated debentures are payable sufficient to pay and discharge the entire indebtedness on the junior subordinated debentures not previously delivered to the debenture trustee for cancellation, for the principal, premium, if any, and interest on the date of the deposit or to the stated maturity, as the case may be, then the junior subordinated indenture will cease to be of further effect and we will be deemed to have satisfied and discharged the indenture. However, we will continue to be obligated to pay all other sums due under the junior subordinated indenture and to provide the officers’ certificates and opinions of counsel described in the junior subordinated indenture. 
Conversion or Exchange 
          We may convert or exchange the junior subordinated debentures into preferred securities or other securities. If so, we will describe the specific terms on which junior subordinated debentures may be converted or exchanged in the applicable prospectus supplement. The conversion or exchange may be mandatory, at your option or at our option. The applicable prospectus supplement will state the manner in which the preferred securities you would receive would be converted or exchanged. 
Subordination 
          In the junior subordinated indenture, we have agreed that any junior subordinated debentures will be subordinate and junior in right of payment to all senior debt to the extent provided in the junior subordinated indenture. 
          In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to us, the holders of senior debt will first be entitled to receive payment in full of principal of, premium, if any, and interest on the senior debt before the holders of junior subordinated debentures or, in the case of corresponding junior subordinated debentures, the property trustee on behalf of the holders, will be entitled to receive or retain any payment of the principal, premium, if any, or interest on the junior subordinated debentures. 
          If the maturity of any junior subordinated debentures is accelerated, the holders of all senior debt outstanding at the time of the acceleration will first be entitled to receive payment in full of all amounts due, including any amounts due upon acceleration, before you will be entitled to receive any payment of the principal of, premium, if any, or interest on the junior subordinated debentures. 
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          We will not make any payments of principal of, premium, if any, or interest on the junior subordinated debentures if: 
			
 	•	a default in any payment on senior debt then exists, 	
 		
 	•	an event of default on any senior debt resulting in the acceleration of its maturity then exists, or 	
 		
 	•	any judicial proceeding is pending in connection with a default. 	
          When we use the term “debt,” we mean, with respect to any person, whether recourse is to all or a portion of the assets of that person and whether or not contingent: 
			
 	•	every obligation of that person for money borrowed, 	
 		
 	•	every obligation of that person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses, 	
 		
 	•	every reimbursement obligation of that person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of the person, 	
 		
 	•	every obligation of that person issued or assumed as the deferred purchase price of property or services, but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business, 	
 		
 	•	every capital lease obligation of that person, and 	
 		
 	•	every obligation of the type referred to in the prior five clauses of another person and all dividends of another person the payment of which the person has guaranteed or is responsible or liable for, directly or indirectly, including as obligor. 	
          When we use the term “senior debt” we mean the principal, premium, if any, and interest on debt, whether incurred on, prior to or after the date of the junior subordinated indenture, unless the instrument creating or evidencing that debt or pursuant to which that debt is outstanding states that those obligations are not superior in right of payment to the junior subordinated debentures or to other debt which ranks equally with, or junior to, the junior subordinated debentures. Interest on this senior debt includes interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to Principal Financial Group, Inc., whether or not the claim for post-petition interest is allowed in that proceeding. 
          However, senior debt will not include: 
			
 	•	any debt of Principal Financial Group, Inc. which when incurred and without regard to any election under Section 1111(b) of the Bankruptcy Code, was without recourse to Principal Financial Group, Inc., 	
 		
 	•	any debt of Principal Financial Group, Inc. to any of its subsidiaries, 	
 		
 	•	debt to any employee of Principal Financial Group, Inc., 	
 		
 	•	any liability for taxes, and 	
 		
 	•	indebtedness or monetary obligations to trade creditors or assumed by Principal Financial Group, Inc. or any of its subsidiaries in the ordinary course of business in connection with the obtaining of materials or services. 	
          As a non-operating holding company, we have no significant business operations of our own. Therefore, we rely on dividends from our insurance company and other subsidiaries as the principal source of cash flow to meet our obligations for payment of principal and interest on our outstanding debt obligations and corporate expenses. Accordingly, the junior subordinated debentures will be effectively subordinated to all existing and future liabilities of our subsidiaries, and you should rely only on our assets 
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for payments on the junior subordinated debentures. The payment of dividends by Principal Life is limited under Iowa insurance laws. See “Principal Financial Group, Inc.” 
          The junior subordinated indenture does not limit the amount of additional senior debt that we may incur. We expect from time to time to incur additional senior debt. 
          The indenture provides that we may change the subordination provisions relating to any particular issue of junior subordinated debentures prior to issuance. We will describe any change in the prospectus supplement relating to the junior subordinated debentures. 
Governing Law 
          The junior subordinated indenture and the junior subordinated debentures will be governed by and construed in accordance with the laws of the State of New York. 
Information Concerning the Debenture Trustee 
          The debenture trustee will have all the duties and responsibilities of an indenture trustee specified in the Trust Indenture Act. Subject to those provisions, the debenture trustee is not required to exercise any of its powers under the junior subordinated indenture at your request, unless you offer reasonable indemnity against the costs, expenses and liabilities which the trustee might incur. The debenture trustee is not required to expend or risk its own funds or incur personal financial liability in performing its duties if the debenture trustee reasonably believes that it is not reasonably assured of repayment or adequate indemnity. 
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DESCRIPTION OF CAPITAL STOCK OF 
PRINCIPAL FINANCIAL GROUP, INC. 
          Our authorized capital stock consists of 2.5 billion shares of common stock and 500 million shares of preferred stock. 
          As of February 1, 2004, we had 320,775,924 outstanding shares of common stock. Holders of common stock have received a right entitling them, when the right becomes exercisable, to purchase shares of Series A Junior Participating Preferred Stock. See “— Stockholder Right Plan.” No shares of preferred stock are currently outstanding. 
Common Stock 
          Holders of common stock are entitled to receive such dividends as may from time to time be declared by our board of directors out of funds legally available for the payment of such dividends. Holders of common stock are entitled to one vote per share on all matters on which the holders of common stock are entitled to vote and do not have any cumulative voting rights. Holders of common stock have no preemptive, conversion, redemption or sinking fund rights. In the event of a liquidation, dissolution or winding up of Principal Financial Group, Inc., holders of common stock are entitled to share equally and ratably in the assets of Principal Financial Group, Inc., if any, remaining after the payment of all liabilities of Principal Financial Group, Inc. and the liquidation preference of any outstanding class or series of preferred stock. The rights and privileges of holders of common stock are subject to any series of preferred stock that we may issue in the future, as described below. Our common stock is listed on the New York Stock Exchange under the symbol “PFG”. 
Preferred Stock 
          We will describe the particular terms of any series of preferred stock and any related guarantee in the prospectus supplement relating to the offering. 
          Our board of directors has the authority to issue preferred stock in one or more series and to fix the number of shares constituting any such series and the voting rights, designations, preferences and qualifications, limitations and restrictions of the shares constituting any series, without any further vote or action by our stockholders. The issuance of preferred stock by our board of directors could adversely affect the rights of holders of common stock. 
          We will fix or designate the rights, preferences, privileges and restrictions, including dividend rights, voting rights, terms of redemption, retirement and sinking fund provisions and liquidation preferences, if any, of a series of preferred stock through a certificate of designation adopted by our board of directors. We will describe the terms, if any, on which shares of any series of preferred stock are convertible or exchangeable into common stock in the prospectus supplement relating to the offering. The conversion or exchange may be mandatory, at your option or at our option. The applicable prospectus supplement will state the manner in which the shares of common stock that you will receive as a holder of preferred stock would be converted or exchanged. 
          On October 22, 2001 our board of directors authorized the issuance of one right with respect to each share of common stock issued between October 22, 2001 and the distribution date (as described below). When these rights become exercisable, holders of the rights will be entitled to purchase Series A Junior Participating Preferred Stock. See “— Stockholder Rights Plan”. 
Change of Control Related Provisions in Our Certificate of Incorporation and By-Laws, and Delaware Law 
          A number of provisions of our certificate of incorporation and by-laws deal with matters of corporate governance and rights of stockholders. The following discussion is a general summary of selected provisions of our certificate of incorporation and by-laws and regulatory provisions that might be deemed to have a potential antitakeover effect. These provisions may have the effect of discouraging a future takeover 
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attempt which is not approved by our board of directors but which individual stockholders may deem to be in their best interests or in which stockholders may receive a substantial premium for their shares over then current market prices. As a result, stockholders who might desire to participate in such a transaction may not have an opportunity to do so. Such provisions will also render the removal of the incumbent board of directors or management more difficult. Some provisions of the Delaware General Corporation Law and the Iowa insurance laws may also have an antitakeover effect. The following description of selected provisions of our certificate of incorporation and by-laws and selected provisions of the Delaware General Corporation Law and the Iowa insurance laws are necessarily general and reference should be made in each case to our certificate of incorporation and by-laws, which are filed as exhibits to the registration statement that includes this prospectus, and to the provisions of those laws, See “Where You Can Find More Information” for information on where to obtain a copy of our certificate of incorporation and by-laws. 

	Unissued Shares of Capital Stock	
          Common Stock. As of February 1, 2004, we had 320,775,924 outstanding shares of common stock. The remaining shares of authorized and unissued common stock are available for future issuance without additional stockholder approval. While the additional shares are not designed to deter or prevent a change of control, under some circumstances we could use the additional shares to create voting impediments or to frustrate persons seeking to effect a takeover or otherwise gain control by, for example, issuing those shares in private placements to purchasers who might side with our board of directors in opposing a hostile takeover bid. 
          Preferred Stock. Our board of directors has the authority to issue preferred stock in one or more series and to fix the number of shares constituting any such series and the preferences, limitations and relative rights, including dividend rights, dividend rate, voting rights, terms of redemption, redemption price or prices, conversion rights and liquidation preferences of the shares constituting any series, without any further vote or action by our stockholders. The existence of authorized but unissued preferred stock could reduce our attractiveness as a target for an unsolicited takeover bid since we could, for example, issue shares of preferred stock to parties who might oppose such a takeover bid or shares that contain terms the potential acquiror may find unattractive. This may have the effect of delaying or preventing a change in control, may discourage bids for the common stock at a premium over the market price of the common stock, and may adversely affect the market price of, and the voting and other rights of the holders of, common stock. 
          Classified Board of Directors and Removal of Directors. Our certificate of incorporation provides that the directors shall be divided into three classes, as nearly equal in number as possible, with the term of office of each class to be three years. The classes serve staggered terms, such that the term of one class of directors expires each year. Any effort to obtain control of our board of directors by causing the election of a majority of the board of directors may require more time than would be required without a staggered election structure. Our certificate of incorporation also provides that directors may be removed only for cause at a meeting of stockholders by a vote of a majority of the shares then entitled to vote. This provision may have the effect of slowing or impeding a change in membership of our board of directors that would effect a change of control. 
          Restriction on Maximum Number of Directors and Filling of Vacancies on our Board of Directors. Our by-laws provide that the number of directors shall be fixed and increased or decreased from time to time by resolution of the board of directors, but the board of directors shall at no time consist of fewer than three directors. Stockholders can only remove a director for cause by a vote of a majority of the shares entitled to vote, in which case the vacancy caused by such removal may be filled at such meeting by the stockholders entitled to vote for the election of the director so removed. Any vacancy on the board of directors, including a vacancy resulting from an increase in the number of directors or resulting from a removal for cause where the stockholders have not filled the vacancy, may be filled by a majority of the directors then in office, although less than a quorum. If the vacancy is not so filled, it shall be filled by the stockholders at the next annual meeting of stockholders. The stockholders are not permitted to fill 
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vacancies between annual meetings except where the vacancy resulted from a removal for cause. These provisions give incumbent directors significant authority that may have the effect of limiting the ability of stockholders to effect a change in management. 
          Advance Notice Requirements for Nomination of Directors and Presentation of New Business at Meetings of Stockholders; Action by Written Consent. Our by-laws provide for advance notice requirements for stockholder proposals and nominations for director. In addition, under the provisions of both our certificate of incorporation and by-laws, action may not be taken by written consent of stockholders; rather, any action taken by the stockholders must be effected at a duly called meeting. The chief executive officer, or, under some circumstances, the president or any vice president, and the board of directors may call a special meeting. These provisions make it more procedurally difficult for a stockholder to place a proposal or nomination on the meeting agenda or to take action without a meeting, and therefore may reduce the likelihood that a stockholder will seek to take independent action to replace directors or seek a stockholder vote with respect to other matters that are not supported by management. 

	Limitations on Director Liability	
          Our certificate of incorporation contains a provision that is designed to limit our directors’ liability. Specifically, directors will not be held liable to Principal Financial Group, Inc. for monetary damages for breach of their fiduciary duty as a director, except to the extent that this limitation on or exemption from liability is not permitted by the Delaware General Corporation Law and any amendments to that law. 
          The principal effect of the limitation on liability provision is that a stockholder is unable to prosecute an action for monetary damages against a director of Principal Financial Group, Inc. unless the stockholder can demonstrate a basis for liability for which indemnification is not available under the Delaware General Corporation Law. This provision, however, does not eliminate or limit director liability arising in connection with causes of action brought under the federal securities laws. Our certificate of incorporation does not eliminate our directors’ duty of care. The inclusion of this provision in our certificate of incorporation may, however, discourage or deter stockholders or management from bringing a lawsuit against directors for a breach of their fiduciary duties, even though such an action, if successful, might otherwise have benefited Principal Financial Group, Inc. and our stockholders. This provision should not affect the availability of equitable remedies such as injunction or rescission based upon a director’s breach of the duty of care. 
          Our by-laws also provide that we will indemnify our directors and officers to the fullest extent permitted by Delaware law. We are required to indemnify our directors and officers for all judgments, fines, settlements, legal fees and other expenses incurred in connection with pending or threatened legal proceedings because of the director’s or officer’s position with Principal Financial Group, Inc. or another entity that the director or officer serves at our request, subject to various conditions, and to advance funds to our directors and officers to enable them to defend against such proceedings. To receive indemnification, the director or officer must have been successful in the legal proceeding or have acted in good faith and in what was reasonably believed to be a lawful manner in the best interest of Principal Financial Group, Inc. 
          Supermajority Voting Requirement for Amendment of Certain Provisions of our Certificate of Incorporation and By-Laws. The provisions of our certificate of incorporation governing, among other things the classified board, the director’s discretion in determining what he or she reasonably believes to be in the best interests of Principal Financial Group, Inc., the liability of directors and the elimination of stockholder actions by written consent may not be amended, altered or repealed unless the amendment is approved by the vote of holders of three/fourths of the shares then entitled to vote at an election of directors. This requirement exceeds the majority vote of the outstanding stock that would otherwise be required by the Delaware General Corporation Law for the repeal or amendment of such provisions of the certificate of incorporation. Our by-laws may be amended by the board of directors or by the vote of holders of three/ fourths of the shares then entitled to vote. These provisions make it more difficult for any person to remove or amend any provisions that have an antitakeover effect. 
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          Business Combination Statute. In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law, unless we elect in our certificate of incorporation not to be governed by the provisions of Section 203. We have not made that election. Section 203 can affect the ability of an “interested stockholder” of Principal Financial Group, Inc. to engage in business combinations, such as mergers, consolidations or acquisitions of additional shares of Principal Financial Group, Inc., for a period of three years following the time that the stockholder becomes an “interested stockholder.” An “interested stockholder” is defined to include persons owning directly or indirectly 15% or more of the outstanding voting stock of a corporation. The provisions of Section 203 are not applicable in some circumstances, including those in which (a) the business combination or transaction which results in the stockholder becoming an “interested stockholder” is approved by the corporation’s board of directors prior to the time the stockholder becomes an “interested stockholder” or (b) the “interested stockholder,” upon consummation of such transaction, owns at least 85% of the voting stock of the corporation outstanding prior to such transaction. 

	Limitations on Acquisitions of Securities	
          Iowa law prohibits for a period of 5 years following October 26, 2001, the date of distribution of consideration to Principal Life’s policyholders in exchange for their membership interests: 
			
 	•	any person, other than the reorganized company, or other than an employee benefit plan or employee benefit trust sponsored by the reorganized company from, directly or indirectly, acquiring or offering to acquire the beneficial ownership of more than 5% of any class of voting security of the reorganized company, and 	
 		
 	•	any person, other than the reorganized company, or other than an employee benefit plan or employee benefit trust sponsored by the reorganized company, who acquires 5% or more of any class of voting security of the reorganized company prior to the conversion from, directly or indirectly, acquiring or offering to acquire the beneficial ownership of additional voting securities of the reorganized company, 	
unless the acquisition is approved by the Insurance Commissioner of the State of Iowa and by the board of directors of the reorganized company. 
          By virtue of these provisions, we may not be subject to an acquisition by another company during the 5 years following October 26, 2001, the date of distribution of consideration to Principal Life’s policyholders in exchange for their membership interests. 
          The insurance holding company and other insurance laws of many states also regulate changes of control of insurance holding companies, such as Principal Financial Group, Inc. A change of control is generally presumed upon acquisitions of 10% or more of voting securities. The Iowa, Arizona and Vermont insurance holding company laws, which are applicable to us require filings in connection with proposed acquisitions of control of domestic insurance companies. These insurance holding company laws prohibit a person from acquiring direct or indirect control of an insurer incorporated in the relevant jurisdiction without prior insurance regulatory approval. 
Stockholder Rights Plan 
          Our board of directors has adopted a stockholder rights plan under which each outstanding share of our common stock issued between October 22, 2001 and the distribution date (as described below) is coupled with a stockholder right. The stockholder rights are attached to the certificates representing outstanding shares of common stock, and no separate rights certificates will be distributed. Each right entitles the holder to purchase one one-thousandth of a share of our Series A Junior Participating Preferred Stock. Each one one-thousandth of a share of Series A Junior Participating Preferred Stock have economic and voting terms equivalent to one share of Principal Financial Group, Inc.’s common stock. Until it is exercised, the right itself will not entitle the holder of the right to any rights as a stockholder, including the right to receive dividends or to vote at stockholder meetings. The description and terms of 
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the rights are found in a rights agreement entered into between Principal Financial Group, Inc. and Mellon Investor Services LLC, as rights agent. The following description of the rights agreement is a summary. You should read the rights agreement for a full description. The rights agreement is filed as an exhibit to the registration statement that includes this prospectus. See “Where You Can Find More Information.” 
          Stockholder rights are not exercisable until the distribution date and will expire at the close of business on October 22, 2011, unless earlier redeemed or exchanged by us. A distribution date would occur upon the earlier of: 
			
 	•	the tenth day after the first public announcement or communication to us that a person or group of affiliated or associated persons (referred to as an acquiring person) has acquired beneficial ownership of 10% or more of our outstanding common stock (the date of such announcement or communication is referred to as the stock acquisition time); or 	
 		
 	•	the tenth business day after the commencement or announcement of the intention to commence a tender offer or exchange offer that would result in a person or group becoming an acquiring person. 	
If any person becomes an acquiring person, each holder of a stockholder right will be entitled to exercise the right and receive, instead of Series A Junior Participating Preferred Stock, common stock or, in some circumstances, cash, a reduction in purchase price, property or other securities of Principal Financial Group, Inc., having a value equal to two times the purchase price of the stockholder right. All stockholder rights that are beneficially owned by an acquiring person or its transferee will become null and void. 
          If at any time after a public announcement has been made or Principal Financial Group, Inc. has received notice that a person has become an acquiring person: 
			
 	•	Principal Financial Group, Inc. is acquired in a merger or other business combination, or 	
 		
 	•	50% or more of Principal Financial Group, Inc.’s assets, cash flow or earning power is sold or transferred, 	
each holder of a stockholder right, except rights which previously have been voided as described above, will have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the purchase price of the right. 
          The purchase price payable, the number of one one-thousandth of a share of Series A Junior Participating Preferred Stock or other securities or property issuable upon exercise of stockholder rights and the number of such rights outstanding, are subject to adjustment from time to time to prevent dilution. Except as provided in the rights agreement, no adjustment in the purchase price or the number of shares of Series A Junior Participating Preferred Stock issuable upon exercise of a stockholder right will be required until the cumulative adjustment would require an increase or decrease of at least one percent in the purchase price or number of shares for which a right is exercisable. 
          At any time until the earlier of (1) the stock acquisition time or (2) the final expiration date of the rights agreement, we may redeem all the stockholder rights at a price of $0.001 per right. At any time after a person has become an acquiring person and prior to the acquisition by such person of 50% or more of the outstanding shares of our common stock, we may exchange the stockholder rights, in whole or in part, at an exchange ratio of one share of common stock, or one one-thousandth of a share of Series A Junior Participating Preferred Stock or of a share of a class or series of preferred stock having equivalent rights, preferences and privileges, per right. 
          The stockholder rights plan is designed to protect stockholders in the event of unsolicited offers to acquire Principal Financial Group, Inc. and other coercive takeover tactics which, in the opinion of Principal Financial Group, Inc.’s board of directors, could impair its ability to represent stockholder interests. The provisions of the stockholder rights plan may render an unsolicited takeover more difficult or less likely to occur or may prevent such a takeover, even though such takeover may offer our stockholders 
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the opportunity to sell their stock at a price above the prevailing market rate and may be favored by a majority of our stockholders. 
Transfer Agent and Registrar 
          The transfer agent and registrar for our common stock and our Series A Junior Participating Preferred Stock is Mellon Investor Services LLC. 
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DESCRIPTION OF DEPOSITARY SHARES 
General Terms 
          We may elect to offer depositary shares representing receipts for fractional interests in debt securities or preferred stock. In this case, we will issue receipts for depositary shares, each of which will represent a fraction of a debt security or share of a particular series of preferred stock, as the case may be. 
          We will deposit the debt securities or shares of any series of preferred stock represented by depositary shares under a deposit agreement between us and a depositary which we will name in the applicable prospectus supplement. Subject to the terms of the deposit agreement, as an owner of a depositary share you will be entitled, in proportion to the applicable fraction of a debt security or share of preferred stock represented by the depositary share, to all the rights and preferences of the debt security or preferred stock, as the case may be, represented by the depositary share, including, as the case may be, interest, dividend, voting, conversion, redemption, sinking fund, repayment at maturity, subscription and liquidation rights. 
          The following description of the terms of the deposit agreement is a summary. It summarizes only those terms of the deposit agreement that we believe will be most important to your decision to invest in our depositary shares. You should keep in mind, however, that it is the deposit agreement, and not this summary, which defines your rights as a holder of depositary shares. There may be other provisions in the deposit agreement that are also important to you. You should read the deposit agreement for a full description of the terms of the depositary shares. The form of the deposit agreement is filed as an exhibit to the registration statement that includes this prospectus. See “Where You Can Find More Information” for information on how to obtain a copy of the deposit agreement. 
Interest, Dividends and Other Distributions 
          The depositary will distribute all payments of interest, cash dividends or other cash distributions received on the debt securities or preferred stock, as the case may be, to you in proportion to the number of depositary shares that you own. 
          In the event of a distribution other than in cash, the depositary will distribute property received by it to you in an equitable manner, unless the depositary determines that it is not feasible to make a distribution. In that case the depositary may sell the property and distribute the net proceeds from the sale to you. 
Redemption of Depositary Shares 
          If we redeem a debt security or series of preferred stock represented by depositary shares, the depositary will redeem your depositary shares from the proceeds received by the depositary resulting from the redemption. The redemption price per depositary share will be equal to the applicable fraction of the redemption price per debt security or share of preferred stock, as the case may be, payable in relation to the redeemed series of debt securities or preferred stock. Whenever we redeem debt securities or shares of preferred stock held by the depositary, the depositary will redeem as of the same redemption date the number of depositary shares representing, as the case may be, the debt securities or shares of preferred stock redeemed. If fewer than all the depositary shares are to be redeemed, the depositary shares to be redeemed will be selected by lot, proportionately or by any other equitable method as the depositary may determine. 
Exercise of Rights under the Indentures or Voting the Preferred Stock 
          Upon receipt of notice of any meeting at which you are entitled to vote, or of any request for instructions or directions from you as holder of debt securities, the depositary will mail to you the information contained in that notice. Each record holder of the depositary shares on the record date will be entitled to instruct the depositary how to give instructions or directions with respect to the debt securities 
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represented by that holder’s depositary shares or how to vote the amount of the preferred stock represented by that holder’s depositary shares. The record date for the depositary shares will be the same date as the record date for the debt securities or preferred stock, as the case may be. The depositary will endeavor, to the extent practicable, to give instructions or directions with respect to the debt securities or to vote the amount of the preferred stock, as the case may be, represented by the depositary shares in accordance with those instructions. We will agree to take all reasonable action which the depositary may deem necessary to enable the depositary to do so. The depositary will abstain from giving instructions or directions with respect to the debt securities or voting shares of the preferred stock, as the case may be, if it does not receive specific instructions from you. 
Amendment and Termination of the Deposit Agreement 
          We and the depositary may amend the form of depositary receipt evidencing the depositary shares and any provision of the deposit agreement at any time. However, any amendment which materially and adversely alters the rights of the holders of the depositary shares will not be effective unless the amendment has been approved by the holders of at least a majority of the depositary shares then outstanding. 
          The deposit agreement will terminate if: 
			
 	•	all outstanding depositary shares have been redeemed, or 	
 		
 	•	there has been a complete repayment or redemption of the debt securities or a final distribution in respect of the preferred stock, including in connection with our liquidation, dissolution or winding up, and the repayment, redemption or distribution proceeds, as the case may be, have been distributed to you. 	
Resignation and Removal of Depositary 
          The depositary may resign at any time by delivering to us notice of its election to do so. We also may, at any time, remove the depositary. Any resignation or removal will take effect upon the appointment of a successor depositary and its acceptance of such appointment. We must appoint the successor depositary within 60 days after delivery of the notice of resignation or removal. The successor depositary must be a bank or trust company having its principal office in the United States and having a combined capital and surplus of at least $50,000,000. 
Charges of Depositary 
          We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will pay charges of the depositary in connection with the initial deposit of the debt securities or preferred stock, as the case may be, and issuance of depositary receipts, all withdrawals of shares of debt securities or preferred stock, as the case may be, by you and any repayment or redemption of the debt securities or preferred stock, as the case may be. You will pay other transfer and other taxes and governmental charges, as well as the other charges that are expressly provided in the deposit agreement to be for your account. 
Miscellaneous 
          The depositary will forward all reports and communications from us which are delivered to the depositary and which we are required or otherwise determine to furnish to holders of debt securities or preferred stock, as the case may be. 
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          Neither we nor the depositary will be liable under the deposit agreement to you other than for the depositary’s gross negligence, willful misconduct or bad faith. Neither we nor the depositary will be obligated to prosecute or defend any legal proceedings relating to any depositary shares, debt securities or preferred stock unless satisfactory indemnity is furnished. We and the depositary may rely upon written advice of counsel or accountants, or upon information provided by persons presenting debt securities or shares of preferred stock for deposit, you or other persons believed to be competent and on documents which we and the depositary believe to be genuine. 
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DESCRIPTION OF WARRANTS 
          We may issue warrants, including warrants to purchase debt securities, preferred stock, common stock or other of our securities. We may issue warrants independently or together with any other securities, and they may be attached to or separate from those securities. We will issue the warrants under warrant agreements between us and a bank or trust company, as warrant agent, that we will describe in the prospectus supplement relating to the warrants that we offer. 
          The following description of the terms of the warrants is a summary. It summarizes only those terms of the warrants and the warrant agreement which we believe will be most important to your decision to invest in our warrants. You should keep in mind, however, that it is the warrant agreement and the warrant certificate relating to the warrants, and not this summary, which defines your rights as a warrantholder. There may be other provisions in the warrant agreement and the warrant certificate relating to the warrants which are also important to you. You should read these documents for a full description of the terms of the warrants. Forms of these documents are filed as exhibits to the registration statement that includes this prospectus. See “Where You Can Find More Information” for information on how to obtain copies of these documents. 
Debt Warrants 
          We will describe in the applicable prospectus supplement the terms of warrants to purchase debt securities that we may offer, the warrant agreement relating to the debt warrants and the warrant certificates representing the debt warrants. These terms will include the following: 
			
 	•	the title of the debt warrants, 	
 		
 	•	the debt securities for which the debt warrants are exercisable, 	
 		
 	•	the aggregate number of the debt warrants, 	
 		
 	•	the principal amount of debt securities that you may purchase upon exercise of each debt warrant, and the price or prices at which we will issue the debt warrants, 	
 		
 	•	the procedures and conditions relating to the exercise of the debt warrants, 	

 	• 	the designation and terms of any related debt securities and guarantee issued with the debt warrants, and the number of debt warrants issued with each debt security, 	

 	•	the date, if any, from which you may separately transfer the debt warrants and the related securities, 	
 		
 	•	the date on which your right to exercise the debt warrants commences, and the date on which your right expires, 	
 		
 	•	the maximum or minimum number of the debt warrants which you may exercise at any time, 	
 		
 	•	if applicable, a discussion of material United States federal income tax considerations, 	
 		
 	•	any other terms of the debt warrants and terms, procedures and limitations relating to your exercise of the debt warrants, and 	
 		
 	•	the terms of the securities you may purchase upon exercise of the debt warrants. 	
          We will also describe in the applicable prospectus supplement any provisions for a change in the exercise price or expiration date of the warrants and the kind, frequency and timing of any notice to be given. You may exchange debt warrant certificates for new debt warrant certificates of different denominations and may exercise debt warrants at the corporate trust office of the warrant agent or any other office that we indicate in the applicable prospectus supplement. Prior to exercise, you will not have any of the rights of holders of the debt securities purchasable upon that exercise and will not be entitled to payments of principal, premium, if any, or interest on the debt securities purchasable upon the exercise. 
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Other Warrants 
          We may issue other warrants. We will describe in the applicable prospectus supplement the following terms of those warrants: 
			
 	•	the title of the warrants, 	
 		
 	•	the securities, which may include preferred stock or common stock, for which you may exercise the warrants, 	
 		
 	•	the aggregate number of the warrants, 	
 		
 	•	the number of securities that you may purchase upon exercise of each warrant, and the price or prices at which we will issue the warrants, 	
 		
 	•	the procedures and conditions relating to the exercise of the warrants, 	

 	• 	the designation and terms of any related securities issued with the warrants, and the number of warrants issued with each security, 	

 	•	the date, if any, from which you may separately transfer the warrants and the related securities, 	
 		
 	•	the date on which your right to exercise the warrants commences, and the date on which your right expires, 	
 		
 	•	the maximum or minimum number of warrants which you may exercise at any time, 	
 		
 	•	if applicable, a discussion of material United States federal income tax considerations, and 	
 		
 	•	any other terms of the warrants, including terms, procedures and limitations relating to your exchange and exercise of the warrants. 	
          We will also describe in the applicable prospectus supplement any provisions for a change in the exercise price or the expiration date of the warrants and the kind, frequency and timing of any notice to be given. You may exchange warrant certificates for new warrant certificates of different denominations and may exercise warrants at the corporate trust office of the warrant agent or any other office that we indicate in the applicable prospectus supplement. Prior to the exercise of your warrants, you will not have any of the rights of holders of the preferred stock, common stock or other securities purchasable upon that exercise and will not be entitled to dividend payments, if any, or voting rights of the preferred stock, common stock or other securities purchasable upon the exercise. 
Exercise of Warrants 
          We will describe in the prospectus supplement relating to the warrants the principal amount or the number of our securities that you may purchase for cash upon exercise of a warrant, and the exercise price. You may exercise a warrant as described in the prospectus supplement relating to the warrants at any time up to the close of business on the expiration date stated in the prospectus supplement. Unexercised warrants will become void after the close of business on the expiration date, or any later expiration date that we determine. 
          We will forward the securities purchasable upon the exercise as soon as practicable after receipt of payment and the properly completed and executed warrant certificate at the corporate trust office of the warrant agent or other office stated in the applicable prospectus supplement. If you exercise less than all of the warrants represented by the warrant certificate, we will issue you a new warrant certificate for the remaining warrants. 
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DESCRIPTION OF PURCHASE CONTRACTS AND PURCHASE UNITS 
          We may issue purchase contracts, including contracts obligating you to purchase from us, and for us to sell to you, a specific number of debt securities, shares of our common stock or preferred stock, depositary shares, warrants, trust preferred securities or other property, at a future date or dates. The price per share of preferred stock or common stock may be fixed at the time the purchase contracts are issued or may be determined by reference to a specific formula described in the purchase contracts. We may issue purchase contracts separately or as a part of units each consisting of a purchase contract and debt securities, undivided beneficial ownership interests in debt securities, trust preferred securities, depositary shares representing fractional interests in debt securities or shares of preferred stock, or debt obligations of third parties, including U.S. Treasury securities, securing your obligations under the purchase contract. The purchase contracts may require us to make periodic payments to you or vice versa and the payments may be unsecured or prefunded on some basis. The purchase contracts may require you to secure your obligations in a specified manner. We will describe in the applicable prospectus supplement the terms of any purchase contracts or purchase units and any related guarantee. 
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DESCRIPTION OF PREFERRED SECURITIES 
          The trustees of each trust will issue preferred securities and common securities of the trust. The preferred securities will represent preferred undivided beneficial interests in the assets of the related trust. As a holder of trust preferred securities, you will generally be entitled to a preference with respect to distributions and amounts payable on redemption or liquidation over the common securities of the trust, as well as other benefits as described in the corresponding trust agreement. Each of the trusts is a legally separate entity and the assets of one trust are not available to satisfy the obligations of any other trust. 
          The following description of the terms of the form of trust agreement is a summary. It summarizes only those portions of the form of trust agreement which we believe will be most important to your decision to invest in the preferred securities. You should keep in mind, however, that it is the trust agreement, and not this summary, which defines your rights as a holder. There may be other provisions in the trust agreement which are also important to you. You should read the form of trust agreement itself for a full description of the terms of the preferred securities. The form of trust agreement is filed as an exhibit to the registration statement that includes this prospectus. See “Where You Can Find More Information” for information on how to obtain a copy of the trust agreement. 
Ranking of Preferred Securities 
          The preferred securities of a trust will rank equally, and we will make payments proportionately, with the common securities of the trust except as described under “— Subordination of Common Securities.” The preferred securities of each trust represent preferred undivided beneficial interests in the assets of the trust. The property trustee will hold legal title to the corresponding junior subordinated debentures in trust for the benefit of the holders of the related preferred securities and common securities. 
          Each guarantee agreement that we execute for your benefit, as a holder of preferred securities of a trust, will be a guarantee on a subordinated basis with respect to the related preferred securities. However, our guarantee will not guarantee payment of distributions or amounts payable on redemption or liquidation of the preferred securities when the related trust does not have funds on hand available to make such payments. See “Description of Guarantee by Principal Financial Group, Inc. of the Preferred Securities.” 
Distributions on the Preferred Securities 
          The trust will pay the distributions on the preferred securities and common securities at a rate specified in the prospectus supplement. 
          The amount of distributions the trust must pay for any period will be computed on the basis of a 360-day year of twelve 30-day months unless we otherwise specify in the applicable prospectus supplement. Distributions that are in arrears may bear interest at the rate per annum specified in the applicable prospectus supplement. The term “distributions” as we use it in this prospectus includes any additional amounts provided in the corresponding trust agreement. 
          Distributions on the preferred securities will be cumulative, will accrue from the date of original issuance and will be payable on the dates specified in the applicable prospectus supplement. If any date on which distributions are payable on the preferred securities is not a business day, the trust will instead make the payment on the next succeeding day that is a business day, and without any interest or other payment on account of the delay. However, if that business day is in the next succeeding calendar year, the trust will make the payment on the immediately preceding business day. In each case payment will be made with the same force and effect as if made on the date the payment was originally due. When we use the term “business day” in this prospectus, we mean any day other than a Saturday or a Sunday, or a day on which banking institutions in the City of New York are authorized or required by law or executive order to remain closed or a day on which the corporate trust office of the applicable trustee is closed for business. 
          If provided in the applicable prospectus supplement, we have the right under the junior subordinated indenture, the contract that provides the terms for the corresponding junior subordinated debentures, to extend the interest payment period for a specified number of periods. However, we may not 
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extend these interest payments beyond the maturity of the junior subordinated debentures. As a consequence of any extension, distributions on the corresponding preferred securities would be deferred by the trust during the extension period. These distributions would continue to accumulate additional distributions at the rate per annum set form in the prospectus supplement. 
          If we exercise this right, during the extension period we and our subsidiaries may not: 
			
 	•	declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment on, any of our capital stock, or 	
 		
 	•	make any payment of principal, premium, if any, or interest on or repay, repurchase or redeem any debt securities that rank equally with or junior in interest to the corresponding junior subordinated debentures or make any related guarantee payments, 	
other than: 
			
 	•	dividends or distributions on our common stock, 	
 		
 	•	redemptions or purchases of any rights pursuant to our rights plan, or any successor to our rights plan, and the declaration of a dividend of these rights in the future, and 	
 		
 	•	payments under any guarantee. 	
          We anticipate that the revenue of each trust available for distribution to you, as a holder of preferred securities, will be limited to payments under the corresponding junior subordinated debentures in which the trust will invest the proceeds from the issuance and sale of its preferred securities and its common securities. See “Description of Corresponding Junior Subordinated Debentures.” 
          If we do not make interest payments on the corresponding junior subordinated debentures, the property trustee will not have funds available to pay distributions on the corresponding preferred securities. The payment of distributions, if and to the extent the trust has funds legally available for the payment of these distributions is guaranteed by us on a limited basis as set forth under “Description of Guarantee by Principal Financial Group, Inc. of the Preferred Securities.” 
          The trust will pay distributions on the preferred securities to you provided you are entered in the register of the trust on the relevant record dates. As long as the preferred securities remain in book-entry form, the record date will be one business day prior to the relevant distribution date. If any preferred securities are not in book-entry form, the record date for the preferred securities will be the date 15 days prior to the relevant distribution date. 
Redemption 

	Redemption on a Repayment or Redemption of the Corresponding Junior Subordinated Debentures	
          Upon the repayment or redemption, in whole or in part, of any corresponding junior subordinated debentures, the property trustee must apply the proceeds from that repayment or redemption to redeem a like amount of the corresponding preferred securities. This redemption must be made upon not less than 30 nor more than 60 days notice to you. The redemption price will be equal to the aggregate liquidation preference of the preferred securities, plus accumulated and unpaid distributions on the preferred securities to the date of redemption and the related amount of any premium paid by us upon the concurrent redemption of the corresponding junior subordinated debentures. See “Description of Corresponding Junior Subordinated Debentures — Optional Redemption.” 
          If less than all of any series of corresponding junior subordinated debentures are repaid or redeemed, then the proceeds from the repayment or redemption will be allocated to redeem a proportionate amount of each of the preferred securities and the common securities. The amount of premium, if any, paid by us upon the redemption of all or any part of any series of any corresponding junior subordinated debentures repaid or redeemed will be allocated proportionately to the redemption of the preferred securities and the common securities. 
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          We must repay the principal of the corresponding junior subordinated debentures when they are due. In addition, we will have the right to redeem any series of corresponding junior subordinated debentures: 
			
 	•	in whole or in part, subject to the conditions we describe under “Description of Corresponding Junior Subordinated Debentures — Optional Redemption,” 	
 		
 	•	at any time, in whole, but not in part, upon the occurrence of a tax event or an investment company event, each as defined below, and subject to the further conditions we describe under “Description of Corresponding Junior Subordinated Debentures — Optional Redemption,” or 	
 		
 	•	as we may otherwise specify in the applicable prospectus supplement. 	

	Redemption or Distribution Upon the Occurrence of a Tax Event or an Investment Company Event	
          If an event occurs that constitutes a tax event or an investment company event we will have the right to: 
			
 	•	redeem the corresponding junior subordinated debentures in whole, but not in part, and cause a mandatory redemption of the preferred securities and common securities in whole, but not in part, within 90 days following the occurrence of the tax event or an investment company event, or 	
 		
 	•	dissolve the related trust and cause the corresponding junior subordinated debentures to be distributed to the holders of the preferred securities and common securities in liquidation of the trust. 	
          If provided in the applicable prospectus supplement, we will have the right to extend or shorten the maturity of any series of corresponding junior subordinated debentures at the time that we exercise our right to elect to dissolve the related trust and cause the corresponding junior subordinated debentures to be distributed to the holders of the preferred securities and common securities in liquidation of the trust. 
          When we use the term “additional sums” in this prospectus we mean the additional amounts that may be necessary in order that the amount of distributions then due and payable by a trust on its outstanding preferred securities and common securities will not be reduced as a result of any additional taxes, duties and other governmental charges to which the trust has become subject as a result of a tax event. 
          When we use the term “tax event” we mean the receipt by the trust of an opinion of counsel experienced in those matters to the effect that, as a result of any amendment to, or change, including any announced prospective change, in, the laws of the United States or any political subdivision or taxing authority affecting taxation, or as a result of any official administrative pronouncement or judicial decision interpreting or applying those laws or regulations, which amendment or change is effective or pronouncement or decision is announced on or after the trust issues the preferred securities, there is more than an insubstantial risk that: 
			
 	•	the trust is, or will be within 90 days of the date of the opinion, subject to United States federal income tax with respect to income received or accrued on the corresponding series of corresponding junior subordinated debentures, 	
 		
 	•	interest payable by us on the series of corresponding junior subordinated debentures is not, or within 90 days of the date of the opinion, will not be, deductible, in whole or in part, for United States federal income tax purposes, or 	
 		
 	•	the trust is, or will be within 90 days of the date of the opinion, subject to more than a de minimis amount of other taxes, duties or other governmental charges. 	
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          When we use the term “investment company event” we mean the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority to the effect that the applicable trust is or will be considered an investment company that is required to be registered under the Investment Company Act of 1940, which change becomes effective on or after the date of original issuance of the series of preferred securities issued by the trust. 
          When we use the term “like amount,” we mean: 
			
 	•	with respect to a redemption of any series of preferred securities, preferred securities having a liquidation amount equal to that portion of the principal amount of corresponding junior subordinated debentures to be contemporaneously redeemed, the proceeds of which will be used to pay the redemption price of the preferred securities, and 	
 		
 	•	with respect to a distribution of corresponding junior subordinated debentures to you, as a holder of preferred securities in connection with a dissolution or liquidation of the related trust, corresponding junior subordinated debentures having a principal amount equal to the liquidation amount of your preferred securities. 	
          When we use the term “liquidation amount,” we mean the stated amount of $25 per preferred security and common security. 
          After the liquidation date fixed for any distribution of corresponding junior subordinated debentures for any series of preferred securities: 
			
 	•	the series of preferred securities will no longer be deemed to be outstanding, 	
 		
 	•	The Depository Trust Company, which we refer to in this prospectus as “DTC,” or its nominee, as the record holder of the series of preferred securities, will receive a registered global certificate or certificates representing the corresponding junior subordinated debentures to be delivered upon that distribution, and 	
 		
 	•	any certificates representing the series of preferred securities not held by DTC or its nominee will be deemed to represent the corresponding junior subordinated debentures having a principal amount equal to the stated liquidation preference of the series of preferred securities, and bearing accrued and unpaid interest in an amount equal to the accrued and unpaid distributions on the series of preferred securities until you present the certificates to the administrative trustees or their agent for transfer or reissuance. 	
          We can make no assurance as to what the market prices will be for the preferred securities or the corresponding junior subordinated debentures that may be distributed to you in exchange for your preferred securities if a dissolution and liquidation of a trust were to occur. Accordingly, the preferred securities that you purchase, or the corresponding junior subordinated debentures that you receive on dissolution and liquidation of a trust, may trade at a discount to the price that you paid to purchase the preferred securities. 
Voluntary Distribution of Junior Subordinated Debentures 
          If we so provide in the applicable prospectus supplement, we may elect, at any time, to dissolve the trust and cause the corresponding junior subordinated debentures to be distributed to you, as a holder of the preferred securities, and us, as the holder of the common securities, in liquidation of the trust. 
Redemption Procedures 
          The trust will redeem the preferred securities on each redemption date at the redemption price with the applicable proceeds from the contemporaneous redemption of the corresponding junior subordinated debentures. The trust will make redemptions of the preferred securities and pay the 
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redemption price only to the extent that it has funds available for the payment of the redemption price. See also “— Subordination of Common Securities.” 
          If a trust gives notice to you of redemption of your preferred securities, then by 12:00 noon, New York City time, on the redemption date, to the extent funds are available, the property trustee will irrevocably deposit with DTC funds sufficient to pay the applicable redemption price and will give DTC irrevocable instructions and authority to pay the redemption price to you. See “— Book-Entry Issuance.” 
          If the preferred securities are no longer in book-entry form, the trust, to the extent funds are available, will irrevocably deposit with the paying agent for the preferred securities funds sufficient to pay the applicable redemption price to you and will give the paying agent irrevocable instructions and authority to pay the redemption price to you upon surrender of your certificates. 
          The trust will pay any distributions payable on or prior to the redemption date for any preferred securities called for redemption to you on the relevant record dates for the distribution. If the trust has given notice of redemption and has deposited the required funds, then upon the date of the deposit, all your rights will cease, except your right to receive the redemption price, without interest on that redemption price, and your preferred securities will cease to be outstanding. If any date fixed for redemption of preferred securities is not a business day, then the trust will pay the redemption price on the next succeeding day which is a business day, and without any interest or other payment on account of the delay. However, if the business day falls in the next calendar year, the trust will make the payment on the immediately preceding business day. If payment of the redemption price is improperly withheld or refused and not paid either by the trust or by us pursuant to the guarantee as described under “Description of Guarantee by Principal Financial Group, Inc. of the Preferred Securities,” distributions on the preferred securities will continue to accrue at the then applicable rate, from the redemption date originally established by the trust for the preferred securities to the date the redemption price is actually paid. In this case the actual payment date will be the date fixed for redemption for purposes of calculating the redemption price. 
          Subject to applicable law, including United States federal securities law, we or our subsidiaries may at any time purchase outstanding preferred securities by tender, in the open market or by private agreement. 
          The trust will make payment of the redemption price on the preferred securities and any distribution of corresponding junior subordinated debentures to the applicable record holders as they appear on the register for the preferred securities on the relevant record date. This date will generally be one business day prior to the relevant redemption date or liquidation date. However, if any preferred securities are not in book-entry form, the relevant record date for the preferred securities will be the date 15 days prior to the redemption date or liquidation date. 
          If less than all of the preferred securities and common securities issued by a trust are to be redeemed on a redemption date, then the aggregate liquidation amount of the preferred securities and common securities to be redeemed will be allocated proportionately among the preferred securities and the common securities. The property trustee will select the particular preferred securities to be redeemed on a proportionate basis not more than 60 days prior to the redemption date from the outstanding preferred securities not previously called for redemption, by any method that the property trustee deems fair and appropriate. This method may provide for the selection for redemption of portions, equal to $25 or an integral multiple of $25, of the liquidation amount of preferred securities. The property trustee will promptly notify the trust registrar in writing of the preferred securities selected for redemption and, in the case of any preferred securities selected for partial redemption, the liquidation amount of the preferred securities to be redeemed. 
Subordination of Common Securities 
          The trust will make payment of distributions, any additional amounts and the redemption price on the preferred securities and common securities proportionately based on the liquidation amount of the 
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preferred securities and common securities. However, if on any distribution date or redemption date a debenture event of default exists, the trust will not make any payment on the common securities unless payment in full in cash of all accumulated and unpaid distributions, any additional amounts and the full amount of the redemption price on all of the outstanding preferred securities of the trust, has been made or provided for. The property trustee will apply all available funds first to the payment in full in cash of all distributions on, or redemption price of, the preferred securities then due and payable. If any event of default resulting from a debenture event of default exists, we as holder of the common securities of the trust will be deemed to have waived any right to act with respect to the event of default under the trust agreement until the effect of all those events of default with respect to the preferred securities have been cured, waived or otherwise eliminated. Until any events of default under the trust agreement with respect to the preferred securities have been so cured, waived or otherwise eliminated, the property trustee will act solely on your behalf, as a holder of the preferred securities, and not on our behalf as holder of the common securities, and only you acting with the other holders will have the right to direct the property trustee to act on your behalf. 
Liquidation Distribution Upon Dissolution 
          Each trust will automatically dissolve upon expiration of its term or the redemption of all of the preferred securities of the trust. In addition, we will dissolve the trust on the first to occur of: 
			
 	•	our bankruptcy, dissolution or liquidation, 	
 		
 	•	the distribution of a like amount of corresponding junior subordinated debentures to the holders of its preferred securities and common securities, 	
 		
 	•	the redemption of all of the preferred securities, and 	
 		
 	•	the entry of an order for the dissolution of the trust by a court of competent jurisdiction. 	
          If an early dissolution occurs as described in the clauses above (except with respect to a redemption of all of the preferred securities), the trustees will liquidate the trust as expeditiously as the trustees determine to be possible by distributing, after satisfaction of liabilities to creditors of the trust as provided by applicable law, to the holders of the preferred securities and common securities a like amount of corresponding junior subordinated debentures. If the property trustee determines that this distribution is not practical, you will be entitled to receive out of the assets of the trust available for distribution, after satisfaction of liabilities to creditors of the trust as provided by applicable law, an amount equal to the aggregate of the liquidation amount plus accrued and unpaid distributions to the date of payment. We refer to this liquidation amount in this prospectus as the “liquidation distribution.” If the trust can make the liquidation distribution only in part because it has insufficient assets available to pay the full aggregate liquidation distribution, then it will pay the amounts on a proportionate basis. We, as the holder of the common securities, will be entitled to receive distributions upon any liquidation proportionately with you, and the other holders of the preferred securities, except that if an event exists that constitutes a debenture event of default, the preferred securities will have a priority over the common securities. A supplemental indenture may provide that if an early dissolution occurs as described in the third clause above, the corresponding junior subordinated debentures may be subject to optional redemption in whole, but not in part. 
Events of Default; Notice 
          Under the terms of the form of trust agreement, each of the following constitutes an event of default for a series of preferred securities: 
			
 	• 	the occurrence of a debenture event of default under the junior subordinated indenture (see “Description of Junior Subordinated Debentures — Debenture Events of Default”) or an event of default described in any related guarantee, 	
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 	•	default by the trust in the payment of any distribution when it becomes due and payable, and continuation of that default for a period of 30 days, 	
 		
 	•	default by the trust in the payment of any redemption price of the preferred securities or common securities when it becomes due and payable, 	
 		
 	•	default in the performance, or breach, in any material respect, of any covenant or warranty of the trustees in the trust agreement, other than a covenant or warranty a default in the performance of which or the breach of which is dealt with in the second and third clauses above, and continuation of the default or breach for a period of 60 days after there has been given to the defaulting trustee or trustees by the holders of at least 10% in aggregate liquidation amount of the outstanding preferred securities, a written notice specifying the default or breach and requiring it to be remedied and stating that the notice is a notice of default under such trust agreement, or 	
 		
 	•	the bankruptcy or insolvency of the property trustee and our failure to appoint a successor property trustee within 60 days of that event. 	
          Within five business days after the occurrence of any event of default actually known to the property trustee, the property trustee will transmit notice of the event of default to you, the administrative trustees and us, as depositor, unless the event of default has been cured or waived. We, as depositor, and the administrative trustees are required to file annually with the property trustee a certificate as to whether or not we are and they are in compliance with all the conditions and covenants applicable to them and to us under the trust agreement. 
          If a debenture event of default then exists, the preferred securities will have a preference over the common securities upon termination of the trust. See “— Liquidation Distribution Upon Dissolution.” 
          The existence of an event of default does not entitle you to accelerate the maturity. 
Removal of Trustees 
          Unless a debenture event of default then exists, the holder of the common securities may remove any trustee. If a debenture event of default then exists the holders of a majority in liquidation amount of the outstanding preferred securities may remove the property trustee and the Delaware trustee. In no event will you have the right to vote to appoint, remove or replace the administrative trustees. These voting rights are vested exclusively in us as the holder of the common securities. No resignation or removal of a trustee and no appointment of a successor trustee will be effective until the acceptance of appointment by the successor trustee in accordance with the provisions of the trust agreement. 
Co-trustees and Separate Property Trustee 
          Unless an event of default then exists, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the trust property may be located, we, as the holder of the common securities, and the administrative trustees will have power to appoint one or more persons approved by the property trustee either to act as a co-trustee, jointly with the property trustee, of all or any part of the trust property, or, to the extent required by law, to act as separate trustee. These persons will have the powers provided in the instrument of appointment, and we may vest in that person or persons any property, title, right or power deemed necessary or desirable, subject to the provisions of the trust agreement. If a debenture event of default exists, the property trustee alone will have power to make that appointment. 
Merger or Consolidation of Trustees 
          Any corporation into which the property trustee, the Delaware trustee or any administrative trustee that is not a natural person 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 is a party, or 
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any corporation succeeding to all or substantially all the corporate trust business of the trustee, will be the successor of such trustee under the trust agreements, provided that the corporation is otherwise qualified and eligible. 
Mergers, Consolidations, Amalgamations or Replacements of the Trusts 
          A trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other body, except as described below or as described under “— Liquidation Distribution Upon Dissolution.” 
          A trust may, at our request, with the consent of the administrative trustees and without your consent, merge with or into, consolidate, amalgamate, or be replaced by a trust organized under the laws of any state. However, the following conditions must be satisfied: 
			
 	•	the successor entity must either: 	
			
 	•	expressly assume all of the obligations of the trust relating to the preferred securities, or 	
 		
 	•	substitute for the preferred securities other securities having substantially the same terms and the same ranking as the preferred securities, 	
			
 	•	we must expressly appoint a trustee of the successor entity possessing the same powers and duties as the property trustee as the holder of the corresponding junior subordinated debentures, 	
 		
 	•	the successor securities must be listed, or any successor securities must be listed upon notification of issuance, on any national securities exchange or other organization on which the preferred securities are then listed, 	
 		
 	•	the merger, consolidation, amalgamation or replacement must not cause the preferred securities, including any successor securities, to be downgraded by any nationally recognized statistical rating organization, 	
 		
 	•	the merger, consolidation, amalgamation or replacement must not adversely affect the rights, preferences and privileges of holders of the preferred securities, including any successor securities, in any material respect, 	
 		
 	•	the successor entity must have a purpose substantially identical to that of the trust, 	
 		
 	•	prior to the merger, consolidation, amalgamation, replacement, conveyance, transfer or lease we must have received an opinion of counsel to the trust to the effect that: 	
			
 	•	the merger, consolidation, amalgamation or replacement does not adversely affect the rights, preferences and privileges of holders of the preferred securities, including any successor securities, in any material respect, and 	
 		
 	•	following the merger, consolidation, amalgamation or replacement neither the trust nor the successor entity will be required to register as an investment company under the Investment Company Act, and 	
			
 	•	we or any permitted successor or assignee must own all of the common securities of the successor entity and guarantee the obligations of such successor entity under the successor securities at least to the extent provided by the guarantee. 	
          However, a trust must not, except with the consent of holders of 100% in liquidation amount of the preferred securities, consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if it would cause the trust or the successor entity to be classified as other than a grantor trust for United States federal income tax purposes. 
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Voting Rights; Amendment of Trust Agreement 
          Except as provided below and under “Description of Guarantee by Principal Financial Group, Inc. of the Preferred Securities — Amendments and Assignment” and as otherwise required by law and the applicable trust agreement, you will have no voting rights. 
          We and the administrative trustees may amend a trust agreement without your consent: 
			
 	•	to cure any ambiguity, correct or supplement any provisions in the trust agreement which may be inconsistent with any other provision, or to make any other provisions with respect to matters or questions arising under the trust agreement, which are not inconsistent with the other provisions of the trust agreement, or 	
 		
 	•	to modify, eliminate or add to any provisions of the trust agreement to the extent necessary to ensure that the trust will be classified for United States federal income tax purposes as a grantor trust at all times that any preferred securities and common securities are outstanding, or to ensure that the trust will not be required to register as an investment company under the Investment Company Act. 	
          However, in the case of the first clause above, the action may not adversely affect in any material respect the interests of the holders of the preferred securities or our interests, as the holder of the common securities. Any such amendments of the trust agreement will become effective when notice is given to you and us. 
          We and the administrative trustees may also amend a trust agreement with: 
			
 	•	the consent of holders representing not less than a majority, based upon liquidation amounts, of the outstanding preferred securities and common securities, and 	
 		
 	•	receipt by the trustees of an opinion of counsel to the effect that the amendment or the exercise of any power granted to the trustees under the amendment will not affect the status of the trust as a grantor trust for United States federal income tax purposes or its exemption from the status of an “investment company” under the Investment Company Act. 	
          Without both your and our consent a trust agreement may not be amended to: 
			
 	•	change the amount or timing of any distribution on the preferred securities and common securities or otherwise adversely affect the amount of any distribution of the preferred securities and common securities as of a specified date, or 	
 		
 	•	restrict your or our right to institute suit for the enforcement of any payment on or after that date. 	
          So long as any corresponding junior subordinated debentures are held by the property trustee, the trustees may not: 
			
 	•	direct the time, method and place of conducting any proceeding for any remedy available to the debenture trustee, or for executing any trust or power conferred on the debenture trustee with respect to the corresponding junior subordinated debentures, 	
 		
 	•	waive any past default that is waiveable under specified sections of the junior subordinated indenture, 	
 		
 	•	exercise any right to rescind or annul a declaration that the principal of all the junior subordinated debentures is due and payable, or 	
 		
 	•	consent to any amendment, modification or termination of the junior subordinated indenture or the corresponding junior subordinated debentures, where that consent is required, 	
without, in each case, obtaining the prior approval of the holders of a majority in aggregate liquidation amount of all outstanding preferred securities. However, where a consent under the junior subordinated 
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indenture would require the consent of each holder of corresponding junior subordinated debentures affected by the consent, no consent may be given by the property trustee without the prior consent of each holder of the corresponding preferred securities. 
          The trustees may not revoke any action previously authorized or approved by a vote of the preferred securities except by subsequent vote of the holders of the preferred securities. The property trustee will notify you of any notice of default with respect to the corresponding junior subordinated debentures. In addition to obtaining the approval of the holders of the preferred securities prior to taking any of these actions, the trustees must obtain an opinion of counsel experienced in these matters to the effect that the trust will not be classified as a corporation or partnership for United States federal income tax purposes on account of the action. 
          Any required approval of holders of preferred securities may be given at a meeting of holders of preferred securities convened for that purpose or through a written consent. The property trustee will cause a notice of any meeting at which you are entitled to vote to be given to each holder of record of preferred securities in the manner set forth in the trust agreement. 
          Your vote or consent is not required for a trust to redeem and cancel the preferred securities under the applicable trust agreement. 
          Any preferred securities that are owned by us, the trustees or any of our affiliates or any affiliate of the trustees, will, for purposes of a vote or consent, be treated as if they were not outstanding. 
Global Preferred Securities 
          We may issue a series of preferred securities in the form of one or more global preferred securities. We will identify the depositary which will hold the global preferred security in the applicable prospectus supplement. Unless we otherwise indicate in the applicable prospectus supplement, the depositary will be DTC. We will issue global preferred securities only in fully registered form and in either temporary or permanent form. Unless it is exchanged for individual preferred securities, a global preferred security may not be transferred except: 
			
 	•	by the depositary to its nominee, 	
 		
 	•	by a nominee of the depositary to the depositary or another nominee, or 	
 		
 	•	by the depositary or any nominee to a successor depositary, or any nominee of the successor. 	
          We will describe the specific terms of the depositary arrangement in the applicable prospectus supplement. We expect that the following provisions will generally apply to these depositary arrangements. 
     Beneficial Interests in a Global Preferred Security 
          If we issue a global preferred security, the depositary for the global preferred security or its nominee will credit on its book-entry registration and transfer system the aggregate liquidation amounts of the individual preferred securities represented by the global preferred securities to the accounts of participants. The accounts will be designated by the dealers, underwriters or agents for the preferred securities, or by us if the preferred securities are offered and sold directly by us. Ownership of beneficial interests in a global preferred security will be limited to participants or persons that may hold interests through participants. Ownership and transfers of beneficial interests in the global preferred security will be shown on, and effected only through, records maintained by the applicable depositary or its nominee, for interests of participants, and the records of participants, for interests of persons who hold through participants. The laws of some states require that you take physical delivery of the securities in definitive form. These limits and laws may impair your ability to transfer beneficial interests in a global preferred security. 
          So long as the depositary or its nominee is the registered owner of the global preferred security, the depositary or nominee will be considered the sole owner or holder of the preferred securities 
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represented by the global preferred security for all purposes under the trust agreement. Except as provided below, you: 
			
 	•	will not be entitled to have any of the individual preferred securities represented by the global preferred security registered in your name, 	
 		
 	•	will not receive or be entitled to receive physical delivery of any preferred securities in definitive form, and 	
 		
 	•	will not be considered the owner or holder of the preferred security under the trust agreement. 	
     Payments of Distributions 
          We will pay distributions on global preferred securities to the depositary that is the registered holder of the global security, or its nominee. The depositary for the preferred securities will be solely responsible and liable for all payments made on account of your beneficial ownership interests in the global preferred security and for maintaining, supervising and reviewing any records relating to your beneficial ownership interests. 
          We expect that the depositary or its nominee, upon receipt of any payment of liquidation amount, premium or distributions, immediately will credit participants’ accounts with amounts in proportion to their respective beneficial interests in the aggregate liquidation amount of the global preferred security as shown on the records of the depositary or its nominee. We also expect that payments by participants to owners of beneficial interests in the global preferred security held through those participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in “street name.” These payments will be the responsibility of those participants. 
     Issuance of Individual Preferred Securities 
          Unless we state otherwise in the applicable prospectus supplement, if a depositary for a series of preferred securities is at any time unwilling, unable or ineligible to continue as a depositary and we do not appoint a successor depositary within 90 days, we will issue individual preferred securities in exchange for the global preferred security. In addition, we may at any time and in our sole discretion, subject to any limitations described in the prospectus supplement relating to the preferred securities, determine not to have any preferred securities represented by one or more global preferred securities. If that occurs, we will issue individual preferred securities in exchange for the global preferred security. 
          Further, we may specify that you may, on terms acceptable to us, the property trustee and the depositary for the global preferred security, receive individual preferred securities in exchange for your beneficial interests in a global preferred security, subject to any limitations described in the prospectus supplement relating to the preferred securities. In that instance, you will be entitled to physical delivery of individual preferred securities equal in liquidation amount to that beneficial interest and to have the preferred securities registered in its name. Unless we otherwise specify, those individual preferred securities will be issued in denominations of $25 and integral multiples of $25. 
Payment and Paying Agency 
          A trust will make payments on the preferred securities to DTC, which will credit the relevant accounts at DTC on the applicable distribution dates. However, if any preferred securities are not held by DTC, the trust will make the payments by check mailed to the address of the holder entitled to the payment as shown on the register. Unless we state otherwise in the applicable prospectus supplement, the paying agent will initially be the property trustee, together with any co-paying agent chosen by the property trustee and acceptable to the administrative trustees and us. The paying agent may resign as paying agent upon 30 days’ written notice to the administrative trustees, property trustees and us. If the property trustee ceases to be the paying agent, the administrative trustees will appoint a successor to act as 
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paying agent. The successor must be a bank or trust company acceptable to the administrative trustees and us. 
Registrar and Transfer Agent 
          Unless we state otherwise in the applicable prospectus supplement, the property trustee will act as registrar and transfer agent for the preferred securities. 
          A trust will register transfers of preferred securities without charge, but upon your payment of any tax or other governmental charges that may be imposed in connection with any transfer or exchange. A trust will not be required to register the transfer of its preferred securities after the preferred securities have been called for redemption. 
Information Concerning the Property Trustee 
          The property trustee, unless an event of default then exists, will be required to perform only those duties that are specifically set forth in the applicable trust agreement. After an event of default, the property trustee must exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. However, the property trustee is under no obligation to exercise any of the powers vested in it by the trust agreement at your request unless you offer reasonable indemnity against the costs, expenses and liabilities that it might incur. If no event of default then exists and the property trustee is required to decide between alternative causes of action, construe ambiguous provisions in a trust agreement or is unsure of the application of any provision of a trust agreement, and the matter is not one on which holders are entitled under the trust agreement to vote, then the property trustee will take such action as is directed by us. If it is not so directed, the property trustee will take such action as it deems advisable and in the best interests of the holders of the preferred securities and the holder of the common securities and will have no liability except for its own bad faith, negligence or willful misconduct. 
Miscellaneous 
          The trust agreements authorize and direct the administrative trustees to operate the related trusts in such a way that the trusts will not be deemed to be an investment company required to be registered under the Investment Company Act or taxed as a corporation for United States federal income tax purposes and so that the corresponding junior subordinated debentures will be treated as our indebtedness for United States federal income tax purposes. We and the administrative trustees are authorized to take any action, not inconsistent with applicable law, the certificate of trust of a trust or the trust agreement, that we and the administrative trustees determine in our discretion to be necessary or desirable for these purposes, as long as the action does not materially adversely affect the interests of the holders of the preferred securities. 
          You have no preemptive or similar rights as a holder of preferred securities. No trust may borrow money or issue debt or mortgage or pledge any of its assets. 
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DESCRIPTION OF GUARANTEE BY PRINCIPAL FINANCIAL GROUP, INC. 
OF THE PREFERRED SECURITIES 
          At the same time as the issuance by a trust of its preferred securities, we will execute and deliver a guarantee for your benefit, as a holder of the preferred securities. Wilmington Trust Company will act as indenture trustee under the guarantee for the purposes of compliance with the Trust Indenture Act. The guarantee will be qualified as an indenture under the Trust Indenture Act. 
          The following description of the terms of the guarantee is a summary. It summarizes only those portions of the guarantee that we believe will be most important to your decision to invest in the preferred securities of a trust. You should keep in mind, however, that it is the guarantee, and not this summary, which defines your rights as a holder of preferred securities. There may be other provisions in the guarantee that are also important to you. You should read the guarantee itself for a full description of its terms. The guarantee is filed as an exhibit to the registration statement that includes this prospectus. See “Where You Can Find More Information” for information on how to obtain a copy of the guarantee. When we refer in this summary to preferred securities, we mean the preferred securities issued by a trust to which the guarantee relates. 
General Terms of the Guarantee 
          We will irrevocably agree to pay in full on a subordinated basis, to the extent described below, the guarantee payments, as defined below, to you, as and when due, regardless of any defense, right of set-off or counterclaim that the trust may have or assert other than the defense of payment. 
          The following payments, which we refer to in this prospectus as the “guarantee payments,” to the extent not paid by or on behalf of the related trust, will be subject to the guarantee: 
			
 	•	any accrued and unpaid distributions required to be paid to you on the related preferred securities, to the extent that the trust has funds available for the payments, 	
 		
 	•	the redemption price for any preferred securities called for redemption, to the extent that the trust has funds available for the payments, or 	
 		
 	•	upon a voluntary or involuntary dissolution, winding up or liquidation of the trust, unless the corresponding junior subordinated debentures are distributed to you, the lesser of: 	
			
 	•	the liquidation distribution, and 	
 		
 	•	the amount of assets of the trust remaining available for distribution to you. 	
          Our obligation to make a guarantee payment may be satisfied by us directly paying to you the required amounts or by causing the trust to pay the amounts to you. 
          The guarantee will be an irrevocable guarantee on a subordinated basis of the related trust obligations under the preferred securities, but will apply only to the extent that the related trust has funds sufficient to make the payments. It is not a guarantee of collection. 
          If we do not make interest payments on the corresponding junior subordinated debentures held by the trust, we expect that the trust will not pay distributions on the preferred securities and will not have funds legally available for those payments. The guarantee will rank subordinate and junior in right of payment to all senior debt. See “— Status of the Guarantee.” 
          As a non-operating holding company, we have no significant business operations of our own. Therefore, we rely on dividends from our insurance company and other subsidiaries as the principal source of cash flow to meet our obligations for payment of principal and interest on our outstanding debt obligations and corporate expenses. Accordingly, our obligations under the guarantee will be effectively subordinated to all existing and future liabilities of our subsidiaries, and you should rely only on our assets for payments under the guarantee. The payment of dividends by Principal Life is limited under Iowa insurance laws. See “Principal Financial Group, Inc.” 
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          Unless we state otherwise in the applicable prospectus supplement, the guarantee does not limit the amount of secured or unsecured debt that we may incur. We expect from time to time to incur additional senior debt. 
          We have, through the guarantee, the trust agreement, the junior subordinated debentures, the junior subordinated indenture and the expense agreement, taken together, fully, irrevocably and unconditionally guaranteed all of the obligations of the trust under the preferred securities. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes the guarantee. It is only the combined operation of these documents that has the effect of providing a full, irrevocable and unconditional guarantee of the obligations of the trust under the preferred securities. See “Relationship Among the Preferred Securities, the Corresponding Junior Subordinated Debentures and the Guarantees by Principal Financial Group, Inc. of the Preferred Securities.” 
Status of the Guarantee 
          The guarantee will constitute an unsecured obligation of Principal Financial Group, Inc. and will rank subordinate and junior in right of payment to all its senior debt. 
          Unless we state otherwise in the applicable prospectus supplement, the guarantee of a series of preferred securities will rank equally with the guarantees relating to all other series of preferred securities that we may issue. The guarantee will constitute a guarantee of payment and not of collection, which means that the guaranteed party may institute a legal proceeding directly against us to enforce its rights under the guarantee without first instituting a legal proceeding against any other person or entity. The property trustee of the related trust will hold the guarantee for your benefit. The guarantee will not be discharged except by payment of the guarantee payments in full to the extent not paid by the trust or upon distribution of the corresponding junior subordinated debentures to you. 
Amendments and Assignment 
          We may not amend the guarantee without the prior approval of the holders of not less than a majority of the aggregate liquidation amount of outstanding preferred securities, except for any changes which do not materially adversely affect the rights of the holders of the preferred securities, in which case no vote will be required. The manner of obtaining any approval will be as set forth under “Description of the Preferred Securities — Voting Rights; Amendment of Trust Agreement.” 
          All guarantees and agreements contained in the guarantee will bind our successors, assigns, receivers, trustees and representatives and will inure to the benefit of the holders of the related preferred securities then outstanding. 
Events of Default 
          An event of default under the guarantee will occur when we fail to perform any of our payment or other obligations under the guarantee. The holders of not less than a majority in aggregate liquidation amount of the related preferred securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the guarantee trustee under the guarantee or to direct the exercise of any trust or power conferred upon the guarantee trustee under the guarantee. 
          You may institute a legal proceeding directly against us to enforce your rights under the guarantee without first instituting a legal proceeding against the trust, the guarantee trustee or any other person or entity. 
          We, as guarantor, are required to file annually with the guarantee trustee a certificate as to whether or not we are in compliance with all the conditions and covenants applicable to us under the guarantee. 
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Information Concerning the Guarantee Trustee 
          The guarantee trustee, unless a default by us in the performance of the guarantee then exists, is required to perform only those duties that are specifically set forth in the guarantee. After a default under the guarantee, the guarantee trustee must exercise the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. However, the guarantee trustee is under no obligation to exercise any of the powers vested in it by the guarantee at your request unless you offer reasonable indemnity against the costs, expenses and liabilities that it might incur. 
Termination of the Guarantee 
          The guarantee will terminate and be of no further force and effect: 
			
 	•	upon full payment of the redemption price of the related preferred securities, 	
 		
 	•	upon full payment of the amounts payable upon liquidation of the related trust, or 	
 		
 	•	upon distribution of corresponding junior subordinated debentures to the holders of the preferred securities. 	
          The guarantee will continue to be effective or will be reinstated if at any time you must restore payment of any sums paid under the preferred securities or the guarantee. 
Governing Law 
          The guarantee will be governed by and construed in accordance with the laws of the State of New York. 
The Expense Agreement 
          Under an expense agreement entered into by us, we will irrevocably and unconditionally guarantee to each person or entity to whom a trust becomes indebted or liable, the full payment of any costs, expenses or liabilities of the trust, other than obligations of the trust to pay to you the amounts due to you under the terms of the preferred securities. 
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DESCRIPTION OF CORRESPONDING JUNIOR SUBORDINATED DEBENTURES 
          The corresponding junior subordinated debentures are to be issued in one or more series of junior subordinated debentures under the junior subordinated indenture with terms corresponding to the terms of the related preferred securities. See “Description of Junior Subordinated Debentures.” 
          The following description of the terms of the corresponding junior subordinated debentures and the junior subordinated indenture is a summary. It summarizes only those portions of the junior subordinated indenture which we believe will be most important to your decision to invest in the preferred securities. You should keep in mind, however, that it is the junior subordinated indenture, and not this summary, which defines your rights. There may be other provisions in the junior subordinated indenture which are also important to you. You should read the junior subordinated indenture itself for a full description of its terms. The junior subordinated indenture is filed as an exhibit to the registration statement that includes this prospectus. See “Where You Can Find More Information” for information on how to obtain a copy of the junior subordinated indenture. 
General Terms of the Corresponding Junior Subordinated Debentures 
          At the same time a trust issues preferred securities, the trust will invest the proceeds from the sale and the consideration paid by us for the common securities in a series of corresponding junior subordinated debentures issued by us to the trust. Each series of corresponding junior subordinated debentures will be in the principal amount equal to the aggregate stated liquidation amount of the related preferred securities plus our investment in the common securities and, unless we state otherwise in the applicable prospectus supplement, will rank equally with all other series of corresponding junior subordinated debentures. The corresponding junior subordinated debentures will be unsecured and subordinate and junior in right of payment to the extent and in the manner set forth in the junior subordinated indenture to all our senior debt. See “Description of Junior Subordinated Debentures — Subordination” and the prospectus supplement relating to any offering of related preferred securities. 
Optional Redemption 
          Unless we state otherwise in the applicable prospectus supplement, we may, at our option, redeem the corresponding junior subordinated debentures on any interest payment date, in whole or in part. Unless we state otherwise in the applicable prospectus supplement, the redemption price for any corresponding junior subordinated debentures will be equal to any accrued and unpaid interest to the date fixed for redemption, plus the greater of: 
			
 	•	the principal amount of the debentures, and 	
 		
 	•	an amount equal to: 	
			
 	•	for junior subordinated debentures bearing interest at a fixed rate, the discounted remaining fixed amount payments. See “Description of Junior Subordinated Debentures — Redemption.” 	
 		
 	•	for junior subordinated debentures bearing interest determined by reference to a floating rate, the discounted swap equivalent payments. See “Description of Junior Subordinated Debentures — Redemption.” 	
          If a tax event or an investment company event exists, we may, at our option, redeem the corresponding junior subordinated debentures on any interest payment date falling within 90 days of the occurrence of the tax event or investment company event, in whole but not in part, subject to the provisions of the junior subordinated indenture. The redemption price for any corresponding junior subordinated debentures will be equal to 100% of the principal amount of the corresponding junior subordinated debentures then outstanding plus accrued and unpaid interest to the date fixed for redemption. See “Description of Junior Subordinated Debentures — Redemption.” 
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          For so long as the applicable trust is the holder of all the outstanding series of corresponding junior subordinated debentures, the trust will use the proceeds of any redemption to redeem the corresponding preferred securities. We may not redeem a series of corresponding junior subordinated debentures in part unless all accrued and unpaid interest has been paid in full on all outstanding corresponding junior subordinated debentures of the series for all interest periods terminating on or prior to the redemption date. 
Covenants of Principal Financial Group, Inc. 
          We will covenant in the junior subordinated indenture for each series of corresponding junior subordinated debentures that we will pay additional sums to the trust, if: 
			
 	•	the trust that has issued the corresponding series of preferred securities and common securities is the holder of all of the corresponding junior subordinated debentures, 	
 		
 	•	a tax event exists, and 	
 		
 	•	we have not redeemed the corresponding junior subordinated debentures or terminated the trust. 	
          We will also covenant, for each series of corresponding junior subordinated debentures, that we and our subsidiaries will not: 
			
 	•	declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment on any of our capital stock, or 	
 		
 	•	make any payment of principal of, interest or premium, if any, on or repay or repurchase or redeem any debt securities, including other corresponding junior subordinated debentures, that rank equally with or junior in interest to the corresponding junior subordinated debentures or make any related guarantee payments, 	
other than: 
			
 	•	dividends or distributions in our common stock, 	
 		
 	•	redemptions or purchases of any rights pursuant to our rights plan, or any successor to our rights plan, and the declaration of a dividend of these rights in the future, and 	
 		
 	•	payments under any guarantee of preferred securities, 	
if at that time: 
			
 	•	there has occurred any event of which we have actual knowledge that with the giving of notice or the lapse of time, or both, would constitute an “event of default” under the junior subordinated indenture for that series of corresponding junior subordinated debentures which we have not taken reasonable steps to cure, 	
 		
 	•	we are in default on our payment of any obligations under the related guarantee, or 	
 		
 	•	we have given notice of our selection of an extension period as provided in the junior subordinated indenture for that series of corresponding junior subordinated debentures and have not rescinded that notice, or the extension period, or any extension, is continuing. 	
          We will also covenant, for each series of corresponding junior subordinated debentures: 
			
 	•	to maintain, by ourselves or our permitted successors, directly or indirectly, 100% ownership of the common securities of the trust to which corresponding junior subordinated debentures have been issued, 	
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 	•	not to voluntarily terminate, wind-up or liquidate any trust, except in connection with a distribution of corresponding junior subordinated debentures to you in liquidation of the trust, or in connection with mergers, consolidations or amalgamations permitted by the related trust agreement, and 	
 		
 	•	to use our reasonable efforts, consistent with the terms and provisions of the related trust agreement, to cause the trust to remain a statutory trust and not to be classified as an association taxable as a corporation for United States federal income tax purposes. 	
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RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE CORRESPONDING 
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEES 
BY PRINCIPAL FINANCIAL GROUP, INC. OF THE PREFERRED SECURITIES 
          As long as payments of interest and other payments are made when due on each series of corresponding junior subordinated debentures, these payments will be sufficient to cover distributions and other payments due on the related preferred securities, primarily because: 
			
 	•	the aggregate principal amount of each series of corresponding junior subordinated debentures will be equal to the sum of the aggregate stated liquidation amount of the corresponding preferred securities and corresponding common securities, 	
 		
 	•	the interest rate and interest and other payment dates on each series of corresponding junior subordinated debentures will match the distribution rate and distribution and other payment dates for the corresponding preferred securities, 	
 		
 	•	we will pay for all and any costs, expenses and liabilities of the trust except the obligations of the trust to holders of its preferred securities under the preferred securities, and 	
 		
 	•	each trust agreement further provides that the trust will not engage in any activity that is not consistent with the limited purposes of the trust. 	
          We will irrevocably guarantee payments of distributions and other amounts due on the preferred securities, to the extent the trust has funds available for the payment of such distributions, to the extent set forth under “Description of Guarantee by Principal Financial Group, Inc. of the Preferred Securities.” 
          Taken together, our obligations under each series of junior subordinated debentures, the junior subordinated indenture, the related trust agreement, the related expense agreement and the related guarantee provide a full, irrevocable and unconditional guarantee of payments of distributions and other amounts due on the related series of preferred securities. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes the guarantee. It is only the combined operation of these documents that has the effect of providing a full, irrevocable and unconditional guarantee of the obligations of the trust under the preferred securities. If and to the extent that we do not make payments on any series of corresponding junior subordinated debentures, the trust will not pay distributions or other amounts due on its preferred securities. 
          Notwithstanding anything to the contrary in the junior subordinated indenture, we have the right to set-off any payment we are otherwise required to make under the junior subordinated indenture with and to the extent we have made or are making a payment under the related guarantee. 
          You may institute a legal proceeding directly against us to enforce your rights under the related guarantee without first instituting a legal proceeding against the guarantee trustee, the related trust or any other person or entity. 
          The preferred securities of each trust evidence your rights to the benefits of the trust. Each trust exists for the sole purpose of issuing its preferred securities and common securities, investing the proceeds from the sale of such securities in corresponding junior subordinated debentures and related purposes. 
          A principal difference between your rights as a holder of a preferred security and the rights of a holder of a corresponding junior subordinated debenture is that a holder of a corresponding junior subordinated debenture will accrue, and, subject to the permissible extension of the interest period, is entitled to receive, interest on the principal amount of corresponding junior subordinated debentures held, while you are only entitled to receive distributions if and to the extent the trust has funds available for the payment of those distributions. 
          Upon any voluntary or involuntary termination, winding-up or liquidation of any trust involving the liquidation of the corresponding junior subordinated debentures, you will be entitled to receive, out of assets held by the trust, the liquidation distribution in cash. See “Description of Preferred Securities — Liquidation Distribution Upon Termination.” 
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          Upon any voluntary or involuntary liquidation or bankruptcy of Principal Financial Group, Inc., the property trustee, as holder of the corresponding junior subordinated debentures, would be a subordinated creditor. In this case, the property trustee would be subordinated in right of payment to all senior debt, but entitled to receive payment in full of principal and interest, before any of our stockholders receive payments or distributions. Since we are the guarantor under each guarantee and have agreed to pay for all costs, expenses and liabilities of each trust, your position as a holder of the preferred securities and the position of a holder of the corresponding junior subordinated debentures relative to other creditors and to our stockholders in the event of liquidation or bankruptcy of our company would be substantially the same. 
          A default or event of default under any senior debt would not constitute a default or event of default under the junior subordinated indenture. However, in the event of payment defaults under, or acceleration of, senior debt, the subordination provisions of the junior subordinated indenture provide that we may not make payments on the corresponding junior subordinated debentures until the senior debt has been paid in full or any payment default under the senior debt has been cured or waived. Our failure to make required payments on any series of corresponding junior subordinated debentures would constitute an event of default under the junior subordinated indenture. 
PLAN OF DISTRIBUTION 
          We may sell the securities offered by this prospectus through agents, underwriters or dealers, or directly to purchasers. 
          Agents whom we designate may solicit offers to purchase the securities. 
			
 	•	We will name any agent involved in offering or selling securities, and disclose any commissions that we will pay to the agent, in the applicable prospectus supplement. 	
 		
 	•	Unless we indicate otherwise in the applicable prospectus supplement, our agents will act on a best efforts basis for the period of their appointment. 	
 		
 	•	Our agents may be deemed to be underwriters under the Securities Act of 1933, as amended, of any of the securities that they offer or sell. 	
          We may use an underwriter or underwriters in the offer or sale of our securities. 
			
 	•	If we use an underwriter or underwriters, we will execute an underwriting agreement with the underwriter or underwriters at the time that we reach an agreement for the sale of the securities. 	
 		
 	•	We will include the names of the specific managing underwriter or underwriters, as well as the names of any other underwriters, and the terms of the transactions, including the compensation the underwriters and dealers will receive, in the applicable prospectus supplement. 	
 		
 	•	The underwriters will use the applicable prospectus supplement to sell the securities. 	
          We may use a dealer to sell the securities. 
			
 	•	If we use a dealer, we, as principal, will sell the securities to the dealer. 	
 		
 	•	The dealer will then sell the securities to the public at varying prices that the dealer will determine at the time it sells our securities. 	
 		
 	•	We will include the name of the dealer and the terms of our transactions with the dealer in the applicable prospectus supplement. 	
          We may solicit directly offers to purchase the securities, and we may directly sell the securities to institutional or other investors. We will describe the terms of our direct sales in our prospectus supplement. 
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          We may also offer and sell securities, if so indicated in the applicable prospectus supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more firms referred to as remarketing firms, acting as principals for their own accounts or as our agents. Any remarketing firm will be identified and the terms of its agreement, if any, with us, and its compensation will be described in the applicable prospectus supplement. Remarketing firms may be deemed to be underwriters under the Securities Act in connection with the securities they remarket. 
          We may also offer and sell, or agree to deliver, securities pursuant to, or in connection with, any put option or other contractual arrangement. We will describe the terms of any such put option or other contractual arrangement in the prospectus supplement relating to such securities. 
          We may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us or other to settle those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and, if not identified in this prospectus, will be identified in the applicable prospectus supplement (or a post-effective amendment). 
          We may indemnify agents, underwriters, dealers and remarketing firms against certain liabilities, including liabilities under the Securities Act. Our agents, underwriters, dealers and remarketing firms, or their affiliates, may be customers of, engage in transactions with or perform services for us, in the ordinary course of business. 
          We may authorize our agents and underwriters to solicit offers by certain institutions to purchase the securities at the public offering price under delayed delivery contracts. 
			
 	•	If we use delayed delivery contracts, we will disclose that we are using them in the prospectus supplement and will tell you when we will demand payment and delivery of the securities under the delayed delivery contracts. 	
 		
 	•	These delayed delivery contracts will be subject only to the conditions that we describe in the prospectus supplement. 	
 		
 	•	We will describe in the applicable prospectus supplement the commission that underwriters and agents soliciting purchases of the securities under delayed contracts will be entitled to receive. 	
          The maximum underwriting compensation in connection with any shelf take-down will not exceed 8% of the offering proceeds, from such take-down. 
LEGAL OPINIONS 
          Unless we state otherwise in the applicable prospectus supplement the validity of any securities offered by this prospectus will be passed upon for us by Debevoise & Plimpton LLP, New York, New York, and for the trusts and us by Richards, Layton & Finger, P.A., special Delaware counsel to the trusts, and for any underwriters or agents by counsel that we will name in the applicable prospectus supplement. 
EXPERTS 
          The consolidated financial statements and schedules of Principal Financial Group, Inc. appearing in Principal Financial Group, Inc.’s Annual Report (Form 10-K) for the year ended December 31, 2002, have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon 
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included therein and incorporated herein by reference. Such consolidated financial statements and schedules are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing. 
WHERE YOU CAN FIND MORE INFORMATION 
          This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission. The registration statement, including the attached exhibits, contains additional relevant information about us. The rules and regulations of the Securities and Exchange Commission allow us to omit some of the information about us. In addition, we file reports, proxy statements, information statements and other information with the Securities and Exchange Commission. This information may be read and copied at the Public Reference Room of the Securities and Exchange Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. Information regarding the operation of the Public Reference Room may be obtained by calling the Securities and Exchange Commission at 1-800-SEC-0330. The material may also be accessed electronically by means of the Securities and Exchange Commission’s home page on the Internet at http://www.sec.gov or through our web site at http://www.principal.com. 
          Our common stock is listed on the New York Stock Exchange, Inc. You can also inspect reports and other information concerning us at the office of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. 
INCORPORATION BY REFERENCE 
          The rules of the Securities and Exchange Commission allow us to incorporate by reference information into this prospectus. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the Securities and Exchange Commission will automatically update and supercede this information. This prospectus incorporates by reference the documents listed below. 
			
 	•	Our Annual Report on Form 10-K for the year ended December 31, 2002, 	

 	• 	Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2003, June 30, 2003, and September 30, 2003, 	

		
 	• 	Our Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2003, filed on February 13, 2004, 	

		
 	• 	Description of our common stock and the rights associated with our common stock contained in our registration statements on Form 8-A, dated October 10, 2001, 	

		
 	•	Our Proxy Statement for the Annual Meeting of Shareholders held on May 19, 2003, and 	

		
 	• 	All documents filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this prospectus. 	
		
          We will provide without charge to each person, including any beneficial owner, to whom a copy of this prospectus is delivered, upon written or oral request of such person, a copy of any or all of the documents referred to above which have been or may be incorporated by reference in this prospectus. You should direct requests for those documents to Principal Financial Group, Inc., Attention: Joyce N. Hoffman, Senior Vice President and Corporate Secretary (Telephone: 515-247-5111). 
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PART II 
INFORMATION NOT REQUIRED IN PROSPECTUS 

Item 14.	Other Expenses of Issuance and Distribution	
          The following table sets forth those expenses to be incurred by Principal Financial Group, Inc. in connection with the issuance and distribution of the securities being registered. Except for the Securities and Exchange Commission filing fee, all amounts shown are estimates. 
 	 	 	 	 	 	
Securities and Exchange Commission filing fee 	 	$	242,700	 	
Fees and expenses of Trustee 	 	$	15,000	 	
Printing and engraving expenses 	 	$	8,000	 	
Accountant’s fees and expenses 	 	$	10,000	 	
Legal fees and expenses 	 	$	90,000	 	
Miscellaneous expenses 	 	$	4,300	 	
 	 	 		 	
 	Total 	 	$	370,000	 	

		
Item 15.	Indemnification of Directors and Officers	
Principal Financial Group, Inc. 
          Our directors and officers may be indemnified against liabilities, fines, penalties and claims imposed upon or asserted against them as provided in the Delaware General Corporation Law and our certificate of incorporation and by-laws. Such indemnification covers all costs and expenses incurred by a director or officer in his or her capacity as such. The board of directors, by a majority vote of a quorum of disinterested directors or, under certain circumstances, independent counsel appointed by the board of directors, must determine that the director or officer seeking indemnification was not guilty of willful misconduct or a knowing violation of the criminal law. In addition, the Delaware General Corporation Law and our certificate of incorporation may, under certain circumstances, eliminate the liability of directors and officers in a stockholder or derivative proceeding. If the person involved is not a director or officer of Principal Financial Group, Inc., the board of directors may cause Principal Financial Group, Inc. to indemnify, to the same extent allowed for our directors and officers, such person who was or is a party to a proceeding by reason of the fact that he or she is or was our employee or agent, or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. We have policies in force and effect that insure our directors and officers against losses which they or any of them will become legally obligated to pay by reason of any actual or alleged error or misstatement or misleading statement or act or omission or neglect or breach of duty by such directors and officers in the discharge of their duties, individually or collectively, or as a result of any matter claimed against them solely by reason of their being directors or officers. Such coverage is limited by the specific terms and provisions of the insurance policies. 
Principal Financial Services, Inc. 
          The Iowa Business Corporation Act grants Principal Financial Services, Inc. the power to indemnify its directors and officers against liabilities under certain circumstances. The articles of incorporation and the by-laws of Principal Financial Services, Inc. provide for indemnification of directors, officers and employees to the full extent provided by the Iowa Business Corporation Act. The articles of incorporation and the by-laws provide that Principal Financial Services, Inc. shall indemnify its directors and officers, as provided under the Iowa Business Corporation Act subject to the limitations as may be established by Principal Financial Services, Inc. The articles of incorporation further provide that a director shall not be personally liable to Principal Financial Services, Inc. or its shareholders for monetary damages for breach of fiduciary duty as a director, except for liability (a) for a breach of the director’s duty of loyalty to Principal Financial Services, Inc. or its shareholders, (b) for acts or omissions not in 
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good faith or which involve intentional misconduct or knowing violation of the law, (c) for a transaction from which the director derives an improper personal benefit or (d) under Section 490.833 of the Iowa Business Corporation Act (relating to certain unlawful distributions to shareholders). 
          The by-laws provide that Principal Financial Services, Inc. shall indemnify, directly or through insurance coverage, its directors and officers against all damages, awards, legal fees and other expenses reasonably incurred in connection with or resulting from any proceeding because of the director’s or officer’s position with Principal Financial Services, Inc. or another entity that the director or officer serves at Principal Financial Services, Inc.’s request. The by-laws further state that the indemnification provided therein shall not be deemed exclusive and shall be in addition to any rights as may be otherwise provided as a matter of law subject to such limitations as may be established by Principal Financial Services, Inc. 
The Trusts 
          Principal Financial Group, Inc., as depositor under the respective trust agreements, has agreed to indemnify each trust’s trustee for, and to hold each such trustee harmless against, any loss, damage, claims, liability, penalty or expense incurred without negligence or bad faith on the part of any such trustee, arising out of or in connection with the acceptance or administration of the respective trust agreements, including the costs and expenses of any trustee of defending itself against any claim or liability in connection with the exercise and performance of any of its powers or duties under the respective trust agreements. 

Item 16.	Exhibits	
 	 	 	 	 	
Exhibit			
No.		Description	
			
 	1	.01	 	Form of Underwriting Agreement (Equity).**** 	
 	1	.02	 	Form of Underwriting Agreement (Debt).**** 	
 	1	.03	 	Form of Underwriting Agreement (Preferred Securities).**** 	
 	1	.04	 	Form of Underwriting Agreement (Purchase Contracts).**** 	
 	1	.05	 	Form of Underwriting Agreement (Purchase Units).**** 	
 	1	.06	 	Form of Underwriting Agreement (Warrants).**** 	
 	2	.01	 	Plan of Conversion.** 	
 	3	.01	 	Form of Amended and Restated Certificate of Incorporation of Principal Financial Group, Inc. (included in Exhibit 2.01). 	
 	3	.02	 	Form of By-laws of Principal Financial Group, Inc. (included in Exhibit 2.01). 	
 	4	.01	 	Form of Certificate for the Common Stock of Principal Financial Group, Inc. par value $0.01 per share.** 	
 	4	.02	 	Amended and Restated Stockholder Rights Agreement, dated as of October 22, 2001.*** 	
 	4	.03	 	Form of Senior Indenture to be entered into between Principal Financial Group, Inc. and The Bank of New York, as Trustee. 	
 	4	.04	 	Form of Subordinated Indenture to be entered into between Principal Financial Group, Inc. and The Bank of New York, as Trustee. 	
 	4	.05	 	Form of Junior Subordinated Indenture to be entered into between Principal Financial Group, Inc. and Wilmington Trust Company, as Trustee. 	
 	4	.06	 	Certificate of Trust of Principal Capital I.* 	
 	4	.07	 	Trust Agreement of Principal Capital I.* 	
 	4	.08	 	Certificate of Trust of Principal Capital II.* 	
 	4	.09	 	Trust Agreement of Principal Capital II.* 	
 	4	.10	 	Certificate of Trust of Principal Capital III.* 	
 	4	.11	 	Trust Agreement of Principal Capital III.* 	
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Exhibit			
No.		Description	
			
 	4	.12	 	Form of Amended and Restated Trust Agreement for Principal Capital I.* 	
 	4	.13	 	Form of Preferred Security Certificate for Principal Capital I (included as Exhibit E of Exhibit 4.12). 	
 	4	.14	 	Form of Agreement as to Expenses and Liabilities for Principal Capital I (included as Exhibit D of Exhibit 4.12). 	
 	4	.15	 	Form of Guarantee Agreement in respect of Principal Capital I.* 	
 	4	.16	 	Form of Amended and Restated Trust Agreement for Principal Capital II.* 	
 	4	.17	 	Form of Preferred Security Certificate for Principal Capital II (included as Exhibit E of Exhibit 4.16). 	
 	4	.18	 	Form of Agreement as to Expenses and Liabilities for Principal Capital II (included as Exhibit D of Exhibit 4.16). 	
 	4	.19	 	Form of Guarantee Agreement in respect of Principal Capital II.* 	
 	4	.20	 	Form of Amended and Restated Trust Agreement for Principal Capital III.* 	
 	4	.21	 	Form of Preferred Security Certificate for Principal Capital III (included as Exhibit E of Exhibit 4.20). 	
 	4	.22	 	Form of Agreement as to Expenses and Liabilities for Principal Capital III (included as Exhibit D of Exhibit 4.20). 	
 	4	.23	 	Form of Guarantee Agreement in respect of Principal Capital III.* 	
 	4	.24	 	Form of Depositary Receipt.**** 	
 	4	.25	 	Form of Depositary Agreement.**** 	
 	4	.26	 	Form(s) of Warrant Agreement(s), including form of Warrant.**** 	
 	4	.27	 	Form of Purchase Contract Agreement.**** 	
 	4	.28	 	Form of Pledge Agreement.**** 	
 	4	.29	 	Form of Global Security (Senior Debt) (included in Exhibit 4.03). 	
 	4	.30	 	Form of Global Security (Subordinated Debt) (included in Exhibit 4.04). 	
 	4	.31	 	Form of Global Security (Junior Subordinated Debt) (included in Exhibit 4.05). 	
 	4	.32	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Preferred Stock of Principal Financial Group, Inc.**** 	
 	4	.33	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Depositary Shares of Principal Financial Group, Inc.**** 	
 	4	.34	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Warrants of Principal Financial Group, Inc.**** 	
 	4	.35	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Purchase Contracts of Principal Financial Group, Inc.**** 	
 	4	.36	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Purchase Units of Principal Financial Group, Inc.**** 	
 	4	.37	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Guarantee by Principal Financial Group, Inc. of the Preferred Securities.**** 	
 	4	.38	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Senior Debt of Principal Financial Group, Inc.**** 	
 	4	.39	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Subordinated Debt of Principal Financial Group, Inc.**** 	
 	4	.40	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Junior Subordinated Debt of Principal Financial Group, Inc.**** 	
 	5	.01	 	Opinion of Debevoise & Plimpton LLP. 	
 	5	.02	 	Opinion of Richards, Layton & Finger, P.A., special Delaware counsel, relating to the legality of the Preferred Securities of Principal Capital I.* 	
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Exhibit			
No.		Description	
			
 	5	.03	 	Opinion of Richards, Layton & Finger, P.A., special Delaware counsel, relating to the legality of the Preferred Securities of Principal Capital II.* 	
 	5	.04	 	Opinion of Richards, Layton & Finger, P.A., special Delaware counsel, relating to the legality of the Preferred Securities of Principal Capital III.* 	
 	12	.01	 	Statement Re: Computation of Ratio of Earnings to Fixed Charges. 	
 	23	.01	 	Consent of Ernst & Young LLP. 	
 	23	.02	 	Consent of Debevoise & Plimpton LLP (included in Exhibit 5.01). 	
 	23	.03	 	Consent of Richards, Layton & Finger, P.A., special Delaware counsel (included in Exhibits 5.02, 5.03 and 5.04). 	
 	24	.01	 	Powers of Attorney for Principal Financial Group, Inc. (included on signature page).* 	
 	24	.02	 	Powers of Attorney for Principal Financial Services, Inc. (included on signature page). 	
 	25	.01	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Trustee for the Junior Subordinated Indenture.* 	
 	25	.02	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Property Trustee for the Amended and Restated Trust Agreement of Principal Capital I.* 	
 	25	.03	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Guarantee Trustee for the Guarantee for Principal Capital I.* 	
 	25	.04	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Property Trustee for the Amended and Restated Trust Agreement of Principal Capital II.* 	
 	25	.05	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Guarantee Trustee for the Guarantee for Principal Capital II.* 	
 	25	.06	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Property Trustee for the Amended and Restated Trust Agreement of Principal Capital III.* 	
 	25	.07	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Guarantee Trustee for the Guarantee for Principal Capital III.* 	
 	25	.08	 	Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as Trustee for the Senior Debt Securities. 	
 	25	.09	 	Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as Trustee for the Subordinated Debt Securities. 	
 	25	.10	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Trustee under the Guarantee by Principal Financial Services, Inc. of the Junior Subordinated Debt Securities of Principal Financial Group, Inc. 	

 	* 	Previously filed. 	
			
 	** 	Incorporated by reference to the exhibit with the same number filed with Principal Financial Group, Inc.’s Registration Statement on Form S-1, as amended (Commission File No. 333-62558) 	
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*** 	Incorporated by reference to Exhibit 4.2 to Principal Financial Group, Inc.’s Form 10-K for the year ended December 31, 2002. 	
		
**** 	To be filed by amendment or by a report on Form 8-K pursuant to Item 601 of Regulation S-K. 	
Item 17.     Undertakings 
          (a) Rule 415 Offering 
          Each undersigned registrant hereby undertakes: 
		
 	          (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: 	
		
 	          (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; 	
 		
 	          (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; 	
 		
 	          (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; 	
          Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. 
		
 	          (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 	
 		
 	          (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 	
          (b) Filings Incorporating Subsequent Exchange Act Documents by Reference 
          Each undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of such registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 
          (c) Acceleration of Effectiveness 
          Insofar as indemnifications for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing 
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provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a registrant of expenses incurred or paid by a director, officer or controlling person, if any, of such registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, such registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 
          (d) Rule 430A Offering 
          Each undersigned registrant hereby undertakes that: 
		
 	          (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. 	
 		
 	          (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 	
          (e) Equity Offerings of Non-reporting Registrants 
          Each undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. 
          (f) Qualification of Trust Indentures for Delayed Offerings 
          Each undersigned registrant hereby undertakes to file an application for the purpose of determining eligibility of the trustee to act under subsection (a) of section 310 of the Trust Indenture Act (“Act”) in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act. 
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SIGNATURES 
          Pursuant to the requirements of the Securities Act of 1933, Principal Financial Group, Inc. (i) certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and (ii) has duly caused this Amendment No. 1 to the Registration Statement on Form S-3 (No. 333-111352) to be signed on its behalf by the undersigned, thereunto duly authorized, in Des Moines, Iowa, on this 23rd day of February, 2004. 
		
 	PRINCIPAL FINANCIAL GROUP, INC. 	
			
 	By: 	/s/ Joyce N. Hoffman 	

 	Name: Joyce N. Hoffman 	
 	Title: Senior Vice President and Corporate Secretary 	
          Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-3 (No. 333-111352) has been signed by the following persons in the capacities and on the dates indicated. 

Signature		Title		Date	
					
*

J. Barry Griswell 	 	Chairman, President, Chief
Executive Officer and Director
(Principal Executive Officer) 	 	February 23, 2004 	
 	
*

Michael H. Gersie 	 	Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and
Chief Accounting Officer) 	 	February 23, 2004 	
 	
*

Betsy J. Bernard 	 	Director 	 	February 23, 2004 	
 	
*

Jocelyn Carter-Miller 	 	Director 	 	February 23, 2004 	
 	
*

Gary E. Costley 	 	Director 	 	February 23, 2004 	
 	
*

David J. Drury 	 	Director 	 	February 23, 2004 	
 	
 *

C. Daniel Gelatt, Jr. 	 	Director 	 	February 23, 2004 	
 	
*

Sandra L. Helton 	 	Director 	 	February 23, 2004 	
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Signature		Title		Date	

*

Charles S. Johnson 	 	Director 	 	February 23, 2004 	
 	
*

William T. Kerr 	 	Director 	 	February 23, 2004 	
 	
*

Richard L. Keyser 	 	Director 	 	February 23, 2004 	
 	
*

Victor H. Loewenstein 	 	Director 	 	February 23, 2004 	
 	
*

Arjun K. Mathrani 	 	Director 	 	February 23, 2004 	
 	
*

Federico F. Pena 	 	Director 	 	February 23, 2004 	
 	
*

Elizabeth E. Tallett 	 	Director 	 	February 23, 2004 	
 	
*By: 	 	/s/ Joyce N. Hoffman

Joyce N. Hoffman 	 	 	 	 	
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SIGNATURES 
          Pursuant to the requirements of the Securities Act of 1933, Principal Financial Services, Inc. (i) certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and (ii) has duly caused this Amendment No. 1 to the Registration Statement on Form S-3 (No. 333-111352) to be signed on its behalf by the undersigned, thereunto duly authorized, in Des Moines, Iowa, on this 23rd day of February, 2004. 
		
 	PRINCIPAL FINANCIAL SERVICES, INC. 	
			
 	By: 	  /s/ Joyce N. Hoffman 	

		
 	Name:  Joyce N. Hoffman 	
			
 	Title: 	Senior Vice President and Corporate Secretary 	
POWER OF ATTORNEY 
          KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael H. Gersie, Joyce N. Hoffman and Karen E. Shaff, and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and to sign any and all capacities, to sign any and all registration statements relating to the same offering of securities as this Registration Statement that are filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and any other regulatory authority, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. 
          Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-3 (No. 333-111352) has been signed by the following persons in the capacities and on the dates indicated. 

Signature		Title		Date	
					
/s/ J. Barry Griswell

J. Barry Griswell 	 	Chairman, President, Chief
Executive Officer and Director
(Principal Executive Officer) 	 	February 23, 2004 	
 	
/s/ Michael H. Gersie

Michael H. Gersie 	 	Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and
Chief Accounting Officer) 	 	February 23, 2004 	
 	
/s/ Betsy J. Bernard

Betsy J. Bernard 	 	Director 	 	February 23, 2004 	
II-9 

Table of Contents

Signature		Title		Date	

/s/ Jocelyn Carter-Miller

Jocelyn Carter-Miller 	 	Director 	 	February 23, 2004 	
 	
/s/ Gary E. Costley

Gary E. Costley 	 	Director 	 	February 23, 2004 	
 	
/s/ David J. Drury

David J. Drury 	 	Director 	 	February 23, 2004 	
 	
/s/ C. Daniel Gelatt, Jr.

C. Daniel Gelatt, Jr. 	 	Director 	 	February 23, 2004 	
 	
/s/ Sandra L. Helton

Sandra L. Helton 	 	Director 	 	February 23, 2004 	
 	
/s/ Charles S. Johnson

Charles S. Johnson 	 	Director 	 	February 23, 2004 	
 	
/s/ William T. Kerr

William T. Kerr 	 	Director 	 	February 23, 2004 	
 	
/s/ Richard L. Keyser

Richard L. Keyser 	 	Director 	 	February 23, 2004 	
 	
/s/ Victor H. Loewenstein

Victor H. Loewenstein 	 	Director 	 	February 23, 2004 	
 	
/s/ Arjun K. Mathrani

Arjun K. Mathrani 	 	Director 	 	February 23, 2004 	
 	
/s/ Federico F. Pena

Federico F. Pena 	 	Director 	 	February 23, 2004 	
 	
/s/ Elizabeth E. Tallett

Elizabeth E. Tallett 	 	Director 	 	February 23, 2004 	
II-10 

Table of Contents
SIGNATURE 
          Pursuant to the requirements of the Securities Act of 1933, Principal Capital I (i) certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and (ii) has duly caused this Amendment No. 1 to the Registration Statement on Form S-3 (No. 333-11352) to be signed on its behalf by the undersigned, thereunto duly authorized, in Des Moines, Iowa, on this 23rd day of February, 2004. 
		
 	PRINCIPAL CAPITAL I 	
			
 	By: 	PRINCIPAL FINANCIAL GROUP, INC., 	
		
 	as Depositor 	
			
 	By: 	/s/ Joyce N. Hoffman 	

 	Name: Joyce N. Hoffman 	
 	Title: Senior Vice President and Corporate Secretary 	
II-11 

Table of Contents
SIGNATURE 
          Pursuant to the requirements of the Securities Act of 1933, Principal Capital II (i) certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and (ii) has duly caused this Amendment No. 1 to the Registration Statement on Form S-3 (No. 333-11352) to be signed on its behalf by the undersigned, thereunto duly authorized, in Des Moines, Iowa, on this 23rd day of February, 2004. 
		
 	PRINCIPAL CAPITAL II 	
			
 	By: 	PRINCIPAL FINANCIAL GROUP, INC., 	
		
 	as Depositor 	
			
 	By: 	/s/ Joyce N. Hoffman 	

 	Name: Joyce N. Hoffman 	
 	Title: Senior Vice President and Corporate Secretary 	
II-12 

Table of Contents
SIGNATURE 
          Pursuant to the requirements of the Securities Act of 1933, Principal Capital III (i) certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and (ii) has duly caused this Amendment No. 1 to the Registration Statement on Form S-3 (No. 333-11352) to be signed on its behalf by the undersigned, thereunto duly authorized, in Des Moines, Iowa, on this 23rd day of February, 2004. 
		
 	PRINCIPAL CAPITAL III 	
			
 	By: 	PRINCIPAL FINANCIAL GROUP, INC., 	
		
 	as Depositor 	
			
 	By: 	/s/ Joyce N. Hoffman 	

 	Name: Joyce N. Hoffman 	
 	Title: Senior Vice President and Corporate Secretary 	
II-13 

Table of Contents
EXHIBIT INDEX 
 	 	 	 	 	
Exhibit			
No.		Description	
			
 	1	.01	 	Form of Underwriting Agreement (Equity).**** 	
 	1	.02	 	Form of Underwriting Agreement (Debt).**** 	
 	1	.03	 	Form of Underwriting Agreement (Preferred Securities).**** 	
 	1	.04	 	Form of Underwriting Agreement (Purchase Contracts).**** 	
 	1	.05	 	Form of Underwriting Agreement (Purchase Units).**** 	
 	1	.06	 	Form of Underwriting Agreement (Warrants).**** 	
 	2	.01	 	Plan of Conversion.** 	
 	3	.01	 	Form of Amended and Restated Certificate of Incorporation of Principal Financial Group, Inc. (included in Exhibit 2.01). 	
 	3	.02	 	Form of By-laws of Principal Financial Group, Inc. (included in Exhibit 2.01). 	
 	4	.01	 	Form of Certificate for the Common Stock of Principal Financial Group, Inc. par value $0.01 per share.** 	
 	4	.02	 	Amended and Restated Stockholder Rights Agreement, dated as of October 22, 2001.*** 	
 	4	.03	 	Form of Senior Indenture to be entered into between Principal Financial Group, Inc. and The Bank of New York, as Trustee. 	
 	4	.04	 	Form of Subordinated Indenture to be entered into between Principal Financial Group, Inc. and The Bank of New York, as Trustee. 	
 	4	.05	 	Form of Junior Subordinated Indenture to be entered into between Principal Financial Group, Inc. and Wilmington Trust Company, as Trustee. 	
 	4	.06	 	Certificate of Trust of Principal Capital I.* 	
 	4	.07	 	Trust Agreement of Principal Capital I.* 	
 	4	.08	 	Certificate of Trust of Principal Capital II.* 	
 	4	.09	 	Trust Agreement of Principal Capital II.* 	
 	4	.10	 	Certificate of Trust of Principal Capital III.* 	
 	4	.11	 	Trust Agreement of Principal Capital III.* 	
 	4	.12	 	Form of Amended and Restated Trust Agreement for Principal Capital I.* 	
 	4	.13	 	Form of Preferred Security Certificate for Principal Capital I (included as Exhibit E of Exhibit 4.12). 	
 	4	.14	 	Form of Agreement as to Expenses and Liabilities for Principal Capital I (included as Exhibit D of Exhibit 4.12). 	
 	4	.15	 	Form of Guarantee Agreement in respect of Principal Capital I.* 	
 	4	.16	 	Form of Amended and Restated Trust Agreement for Principal Capital II.* 	
 	4	.17	 	Form of Preferred Security Certificate for Principal Capital II (included as Exhibit E of Exhibit 4.16). 	
 	4	.18	 	Form of Agreement as to Expenses and Liabilities for Principal Capital II (included as Exhibit D of Exhibit 4.16). 	
 	4	.19	 	Form of Guarantee Agreement in respect of Principal Capital II.* 	
 	4	.20	 	Form of Amended and Restated Trust Agreement for Principal Capital III.* 	
 	4	.21	 	Form of Preferred Security Certificate for Principal Capital III (included as Exhibit E of Exhibit 4.20). 	
 	4	.22	 	Form of Agreement as to Expenses and Liabilities for Principal Capital III (included as Exhibit D of Exhibit 4.20). 	
 	4	.23	 	Form of Guarantee Agreement in respect of Principal Capital III.* 	
 	4	.24	 	Form of Depositary Receipt.**** 	
 	4	.25	 	Form of Depositary Agreement.**** 	
 	4	.26	 	Form(s) of Warrant Agreement(s), including form of Warrant.**** 	

Table of Contents
 	 	 	 	 	
Exhibit			
No.		Description	
			
 	4	.27	 	Form of Purchase Contract Agreement.**** 	
 	4	.28	 	Form of Pledge Agreement.**** 	
 	4	.29	 	Form of Global Security (Senior Debt) (included in Exhibit 4.03). 	
 	4	.30	 	Form of Global Security (Subordinated Debt) (included in Exhibit 4.04). 	
 	4	.31	 	Form of Global Security (Junior Subordinated Debt) (included in Exhibit 4.05). 	
 	4	.32	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Preferred Stock of Principal Financial Group, Inc.**** 	
 	4	.33	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Depositary Shares of Principal Financial Group, Inc.**** 	
 	4	.34	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Warrants of Principal Financial Group, Inc.**** 	
 	4	.35	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Purchase Contracts of Principal Financial Group, Inc.**** 	
 	4	.36	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Purchase Units of Principal Financial Group, Inc.**** 	
 	4	.37	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Guarantee by Principal Financial Group, Inc. of the Preferred Securities.**** 	
 	4	.38	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Senior Debt of Principal Financial Group, Inc.**** 	
 	4	.39	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Subordinated Debt of Principal Financial Group, Inc.**** 	
 	4	.40	 	Form of Guarantee of Principal Financial Services, Inc. with respect to Junior Subordinated Debt of Principal Financial Group, Inc.**** 	
 	5	.01	 	Opinion of Debevoise & Plimpton LLP. 	
 	5	.02	 	Opinion of Richards, Layton & Finger, P.A., special Delaware counsel, relating to the legality of the Preferred Securities of Principal Capital I.* 	
 	5	.03	 	Opinion of Richards, Layton & Finger, P.A., special Delaware counsel, relating to the legality of the Preferred Securities of Principal Capital II.* 	
 	5	.04	 	Opinion of Richards, Layton & Finger, P.A., special Delaware counsel, relating to the legality of the Preferred Securities of Principal Capital III.* 	
 	12	.01	 	Statement Re: Computation of Ratio of Earnings to Fixed Charges. 	
 	23	.01	 	Consent of Ernst & Young LLP. 	
 	23	.02	 	Consent of Debevoise & Plimpton LLP (included in Exhibit 5.01). 	
 	23	.03	 	Consent of Richards, Layton & Finger, P.A., special Delaware counsel (included in Exhibits 5.02, 5.03 and 5.04). 	
 	24	.01	 	Powers of Attorney for Principal Financial Group, Inc. (included on signature page).* 	
 	24	.02	 	Powers of Attorney for Principal Financial Services, Inc. (included on signature page). 	
 	25	.01	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Trustee for the Junior Subordinated Indenture.* 	
 	25	.02	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Property Trustee for the Amended and Restated Trust Agreement of Principal Capital I.* 	
 	25	.03	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Guarantee Trustee for the Guarantee for Principal Capital I.* 	
 	25	.04	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Property Trustee for the Amended and Restated Trust Agreement of Principal Capital II.* 	
 	25	.05	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Guarantee Trustee for the Guarantee for Principal Capital II.* 	
 	25	.06	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Property Trustee for the Amended and Restated Trust Agreement of Principal Capital III.* 	

Table of Contents
 	 	 	 	 	
Exhibit			
No.		Description	
			
 	25	.07	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Guarantee Trustee for the Guarantee for Principal Capital III.* 	
 	25	.08	 	Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as Trustee for the Senior Debt Securities. 	
 	25	.09	 	Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as Trustee for the Subordinated Debt Securities. 	
 	25	.10	 	Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as Trustee under the Guarantee by Principal Financial Services, Inc. of the Junior Subordinated Debt Securities of Principal Financial Group, Inc. 	

 	* 	Previously filed. 	
			
 	** 	Incorporated by reference to the exhibit with the same number filed with Principal Financial Group, Inc.’s Registration Statement on Form S-1, as amended (Commission File No. 333-62558) 	
			
 	*** 	Incorporated by reference to Exhibit 4.2 to Principal Financial Group, Inc.’s Form 10-K for the year ended December 31, 2002. 	
			
 	**** 	To be filed by amendment or by a report on Form 8-K pursuant to Item 601 of Regulation S-K. 	

                                                                    Exhibit 4.03

================================================================================

                         PRINCIPAL FINANCIAL GROUP, INC.

                                       TO

                              THE BANK OF NEW YORK

                                     Trustee

                                SENIOR INDENTURE

                               Dated as of -, 200-

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

================================================================================

                                TABLE OF CONTENTS

                                                                                                                       Page
                                                                                                                       ----
                                                                                                                    
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION......................................................1
      SECTION 101.                                         Definitions...................................................1
          Act............................................................................................................2
          Affiliate......................................................................................................2
          Authenticating Agent...........................................................................................2
          Board of Directors.............................................................................................2
          Board Resolution...............................................................................................2
          Business Day...................................................................................................2
          Commission.....................................................................................................2
          Company........................................................................................................2
          Company Request and Company Order..............................................................................2
          Corporate Trust Office.........................................................................................3
          corporation....................................................................................................3
          Covenant Defeasance............................................................................................3
          Defaulted Interest.............................................................................................3
          Defeasance.....................................................................................................3
          Depositary.....................................................................................................3
          Dollar.........................................................................................................3
          Event of Default...............................................................................................3
          Exchange Act...................................................................................................3
          Expiration Date................................................................................................3
          Foreign Currency...............................................................................................3
          Global Security................................................................................................3
          Governmental Authority.........................................................................................3
          Government Obligations.........................................................................................3
          Guarantee......................................................................................................4
          Guarantor......................................................................................................4
          Holder.........................................................................................................4
          Indebtedness...................................................................................................4
          Indenture......................................................................................................4
          Interest Payment Date..........................................................................................4
          Interest Rate..................................................................................................5
          Investment Company Act.........................................................................................5
          Lien...........................................................................................................5
          Maturity.......................................................................................................5
          Notice of Default..............................................................................................5
          Officers' Certificate..........................................................................................5
          Opinion of Counsel.............................................................................................5
          Original Issue Date............................................................................................5
          Original Issue Discount Security...............................................................................5
          Outstanding....................................................................................................5
          Paying Agent...................................................................................................6

                                       i

                                                                                                                     
          Person.........................................................................................................6
          Place of Payment...............................................................................................6
          Predecessor Security...........................................................................................6
          Preferred Stock................................................................................................7
          Redemption Date................................................................................................7
          Redemption Price...............................................................................................7
          Regular Record Date............................................................................................7
          Responsible Officer............................................................................................7
          Restricted Subsidiary..........................................................................................7
          Securities or Security.........................................................................................7
          Securities Act.................................................................................................7
          Security Register and Security Registrar.......................................................................7
          Special Record Date............................................................................................7
          Stated Maturity................................................................................................8
          Subsidiary.....................................................................................................8
          Trust Indenture Act............................................................................................8
          Trustee........................................................................................................8
          Vice President.................................................................................................8
      SECTION 102.   Compliance Certificates and Opinions................................................................8
      SECTION 103.   Form of Documents Delivered to Trustee..............................................................9
      SECTION 104.   Acts of Holders; Record Dates.......................................................................9
      SECTION 105.   Notices, Etc., to Trustee and Company..............................................................12
      SECTION 106.   Notice to Holders; Waiver..........................................................................12
      SECTION 107.   Conflict with Trust Indenture Act..................................................................12
      SECTION 108.   Effect of Headings and Table of Contents...........................................................13
      SECTION 109.   Successors and Assigns.............................................................................13
      SECTION 110.   Separability Clause................................................................................13
      SECTION 111.   Benefits of Indenture..............................................................................13
      SECTION 112.   Governing Law; Waiver of Jury Trial................................................................13
      SECTION 113.   Legal Holidays.....................................................................................13
      SECTION 114.   Computations.......................................................................................14
ARTICLE TWO SECURITY FORMS .............................................................................................14
      SECTION 201.   Forms Generally....................................................................................14
      SECTION 202.   Form of Legend for Global Securities...............................................................15
      SECTION 203.   Form of Trustee's Certificate of Authentication....................................................15
ARTICLE THREE THE SECURITIES ...........................................................................................16
      SECTION 301.   Title; Terms.......................................................................................16
      SECTION 302.   Denominations......................................................................................18
      SECTION 303.   Execution, Authentication, Delivery and Dating.....................................................18
      SECTION 304.   Temporary Securities...............................................................................19
      SECTION 305.   Registration, Registration of Transfer and Exchange................................................20
      SECTION 306.   Mutilated, Destroyed, Lost and Stolen Securities...................................................22
      SECTION 307.   Payment of Interest; Interest Rights Preserved.....................................................23
      SECTION 308.   Persons Deemed Owners..............................................................................24
      SECTION 309.   Cancellation.......................................................................................24

                                       ii

                                                                                                                     
      SECTION 310.   Computation of Interest............................................................................25
      SECTION 311.   CUSIP Numbers......................................................................................25
ARTICLE FOUR SATISFACTION AND DISCHARGE ................................................................................25
      SECTION 401.   Satisfaction and Discharge of Indenture............................................................25
      SECTION 402.   Application of Trust Money.........................................................................26
ARTICLE FIVE REMEDIES ..................................................................................................27
      SECTION 501.   Events of Default..................................................................................27
      SECTION 502.   Acceleration of Maturity; Rescission and Annulment.................................................28
      SECTION 503.   Collection of Indebtedness and Suits for Enforcement by Trustee....................................29
      SECTION 504.   Trustee May File Proofs of Claim...................................................................30
      SECTION 505.   Trustee May Enforce Claims Without Possession of Securities........................................30
      SECTION 506.   Application of Money Collected.....................................................................30
      SECTION 507.   Limitation on Suits................................................................................31
      SECTION 508.   Unconditional Right of Holders to Receive Principal, Premium and Interest..........................32
      SECTION 509.   Restoration of Rights and Remedies.................................................................32
      SECTION 510.   Rights and Remedies Cumulative.....................................................................32
      SECTION 511.   Delay or Omission Not Waiver.......................................................................32
      SECTION 512.   Control by Holders.................................................................................32
      SECTION 513.   Waiver of Past Defaults............................................................................33
      SECTION 514.   Undertaking for Costs..............................................................................33
      SECTION 515.   Waiver of Usury, Stay or Extension Laws............................................................34
ARTICLE SIX THE TRUSTEE ................................................................................................34
      SECTION 601.   Certain Duties and Responsibilities................................................................34
      SECTION 602.   Notice of Defaults.................................................................................35
      SECTION 603.   Certain Rights of Trustee..........................................................................35
      SECTION 604.   Not Responsible for Recitals or Issuance of Securities.............................................37
      SECTION 605.   May Hold Securities................................................................................37
      SECTION 606.   Money Held in Trust................................................................................38
      SECTION 607.   Compensation and Reimbursement.....................................................................38
      SECTION 608.   Disqualification; Conflicting Interests............................................................38
      SECTION 609.   Corporate Trustee Required; Eligibility............................................................39
      SECTION 610.   Resignation and Removal; Appointment of Successor..................................................39
      SECTION 611.   Acceptance of Appointment by Successor.............................................................41
      SECTION 612.   Merger, Conversion, Consolidation or Succession to Business........................................42
      SECTION 613.   Preferential Collection of Claims Against Company..................................................42
      SECTION 614.   Appointment of Authenticating Agent................................................................42

                                      iii

                                                                                                                     
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.........................................................44
      SECTION 701.   Company to Furnish Trustee Names and Addresses of Holders..........................................44
      SECTION 702.   Preservation of Information; Communications to Holders.............................................44
      SECTION 703.   Reports by Trustee.................................................................................45
      SECTION 704.   Reports by Company.................................................................................45
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE......................................................46
      SECTION 801.   Company May Consolidate, Etc., Only on Certain Terms...............................................46
      SECTION 802.   Successor Corporation Substituted..................................................................47
ARTICLE NINE SUPPLEMENTAL INDENTURES ...................................................................................47
      SECTION 901.   Supplemental Indentures Without Consent of Holders.................................................47
      SECTION 902.   Supplemental Indentures With Consent of Holders....................................................48
      SECTION 903.   Execution of Supplemental Indentures...............................................................49
      SECTION 904.   Effect of Supplemental Indentures..................................................................49
      SECTION 905.   Conformity with Trust Indenture Act................................................................50
      SECTION 906.   Reference in Securities to Supplemental Indentures.................................................50
ARTICLE TEN COVENANTS ..................................................................................................50
      SECTION 1001.  Payment of Principal, Premium and Interest.........................................................50
      SECTION 1002.  Maintenance of Office or Agency....................................................................50
      SECTION 1003.  Money for Securities Payments to Be Held in Trust..................................................51
      SECTION 1004.  Statement by Officers as to Default................................................................52
      SECTION 1005.  Existence. ........................................................................................52
      SECTION 1006.  Payment of Taxes...................................................................................52
      SECTION 1007.  Limitation on Liens................................................................................53
      SECTION 1008.  Waiver of Certain Covenants........................................................................53
      SECTION 1009.  Calculation of Original Issue Discount.............................................................53
ARTICLE ELEVEN REDEMPTION OF SECURITIES ................................................................................53
      SECTION 1101.  Company's Right of Redemption......................................................................53
      SECTION 1102.  Applicability of Article...........................................................................54
      SECTION 1103.  Election to Redeem; Notice to Trustee..............................................................54
      SECTION 1104.  Selection by Trustee of Securities to Be Redeemed..................................................54
      SECTION 1105.  Notice of Redemption...............................................................................55
      SECTION 1106.  Deposit of Redemption Price........................................................................56
      SECTION 1107.  Securities Payable on Redemption Date..............................................................56
      SECTION 1108.  Securities Redeemed in Part........................................................................56
ARTICLE TWELVE DEFEASANCE AND COVENANT DEFEASANCE ......................................................................57
      SECTION 1201.  Company's Option to Effect Defeasance or Covenant Defeasance.......................................57

                                       iv

                                                                                                                     
      SECTION 1202.  Defeasance and Discharge...........................................................................57
      SECTION 1203.  Covenant Defeasance................................................................................57
      SECTION 1204.  Conditions to Defeasance or Covenant Defeasance....................................................58
      SECTION 1205.  Deposited Money and Government Obligations to Be Held in Trust; Miscellaneous Provisions...........59
      SECTION 1206.  Reinstatement......................................................................................60
      SECTION 1207.  Qualifying Trustee.................................................................................60

                                       v

                   CERTAIN SECTIONS OF THIS INDENTURE RELATING
                          TO SECTIONS 310 THROUGH 318,
                  INCLUSIVE OF THE TRUST INDENTURE ACT OF 1939:

                                                      
TRUST INDENTURE ACT SECTION                              INDENTURE SECTION
SECTION 310(a)(1).................................................609, 610
(a)(2).................................................................609
(a)(3)......................................................NOT APPLICABLE
(a)(4)......................................................NOT APPLICABLE
(a)(5) ................................................................609
(b)...............................................................608, 610
SECTION 311(a).........................................................613
(b)....................................................................613
SECTION 312(a)....................................................701, 702
(b)....................................................................702
(c)....................................................................702
SECTION 313(a).........................................................703
(b)....................................................................703
(c)....................................................................703
(d)....................................................................703
SECTION 314(a).........................................................704
(a)(4)...........................................................101, 1004
(b).........................................................NOT APPLICABLE
(c)(1).................................................................102
(c)(2).................................................................102
(c)(3)......................................................NOT APPLICABLE
(d).........................................................NOT APPLICABLE
(e)....................................................................102
SECTION 315(a).........................................................601
(b)....................................................................602
(c)....................................................................601
(d)....................................................................601
(e)....................................................................514
SECTION 316(a).........................................................101
(a)(1)(a).........................................................502, 512
(a)(1)(b)..............................................................513
(a)(2)......................................................NOT APPLICABLE
(b)....................................................................508
(c)....................................................................104
SECTION 317(a)(1)......................................................503
(a)(2).................................................................504
(b)...................................................................1003
SECTION 318(a).........................................................107

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.

                                       vi

         SENIOR INDENTURE, dated as of -, 200-, between Principal Financial
Group, Inc., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
711 High Street, Des Moines, Iowa 50392, and The Bank of New York, a New York
banking corporation, as Trustee (herein called the "Trustee").

                             RECITALS OF THE COMPANY

         The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured senior
debt securities in one or more series (the "Securities") of substantially the
tenor hereinafter provided, and to provide the terms and conditions upon which
the Securities are to be authenticated, issued and delivered; and all things
necessary to make the Securities, when executed by the Company and authenticated
and delivered hereunder and duly issued by the Company, the valid obligations of
the Company, and to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done.

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of a series thereof,
as follows:

                                   ARTICLE ONE
                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

SECTION 101. Definitions.

         For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

         (1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;

         (2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;

         (3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted at the
time of such computation; provided, that when two or more principles are so
generally accepted, it shall mean that set of principles consistent with those
in use by the Company;

         (4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Indenture; and

         (5) the words "herein", "hereinafter", "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.

         "Act" when used with respect to any Holder, has the meaning specified
in Section 104.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any 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.

         "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.

         "Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.

         "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors or such committee of the Board of Directors to which
authority to act on behalf of the Board of Directors has been delegated, and to
be in full force and effect on the date of such certification, and delivered to
the Trustee.

         "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which the Corporate Trust Office, banking
institutions in New York, New York, Chicago, Illinois or Des Moines, Iowa, or
any Place of Payment are authorized or obligated by law or executive order to
close.

         "Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, 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.

         "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.

         "Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by (i) its Chairman,
President, Chief Executive Officer or any Vice President and (ii) its Treasurer,
any Associate Treasurer,

                                       2

any Assistant Treasurer, its Controller, its Secretary or any Assistant
Secretary, and delivered to the Trustee.

         "Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date hereof is located at 2 North LaSalle
Street, Suite 1020, Chicago, Illinois 60602, Attention: Corporate Trust
Department, or such other address as the Trustee may designate from time to time
by notice to the Holders and the Company, or the principal corporate trust
office of any successor Trustee (or such other address as such successor Trustee
may designate from time to time by notice to the Holders and the Company).

         "corporation" means a corporation, association, company, joint-stock
company or business trust.

         "Covenant Defeasance" has the meaning specified in Section 1203.

         "Defaulted Interest" has the meaning specified in Section 307.

         "Defeasance" has the meaning specified in Section 1202.

         "Depositary" means the clearing agency registered under the Exchange
Act that is designated by the Company in Section 301 to act as depositary for
any series of Securities with respect to such series (or any successor to such
clearing agency).

         "Dollar" means the currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debts.

         "Event of Default," unless otherwise specified with respect to
Securities of a series pursuant to Section 301, has the meaning specified in
Section 501.

         "Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.

         "Expiration Date" has the meaning specified in Section 104.

         "Foreign Currency" means any currency issued by the government of one
or more countries other than the United States of America or by any recognized
confederation or association of such governments.

         "Global Security" means a Security that evidences all or part of a
series of Securities issued to the Depositary or its nominee for such series,
and registered in the name of such Depositary or its nominee and bearing the
legend set forth in Section 202.

         "Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.

         "Government Obligations" means, with respect to the Securities of any
series, securities which are (i) direct obligations of the United States of
America or (ii)

                                       3

obligations 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 by the United States of America and which, in either
case, are full faith and credit obligations of the United States of America and
are not callable or redeemable at the option of the issuer thereof and shall
also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act) as custodian with respect to any such Government
Obligation held by such custodian for the account of the holder of such
depository receipt; 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 depository receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of interest on or principal of
the Government Obligation evidenced by such depository receipt.

         "Guarantee", when used with respect to the Securities of or within any
series, means a guarantee by the Guarantor of the obligations of the Company
under such Securities, which guarantee may be included in an indenture or
indentures supplemental hereto or in a separate agreement.

         "Guarantor" means Principal Financial Services, Inc., an Iowa business
corporation, and its successors and assigns.

         "Holder" means a Person in whose name a Security is registered in the
Security Register.

         "Indebtedness" of any person means the principal of and premium, if
any, and interest due on indebtedness of such Person, whether outstanding on the
date of this Indenture or thereafter created, incurred or assumed, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent which is (a) indebtedness for money borrowed, and (b) any amendments,
renewals, extensions, modifications and refundings of any such indebtedness. For
the purposes of this definition, "indebtedness for money borrowed" means (i) any
obligation of, or any obligation guaranteed by, such Person for the repayment of
borrowed money, whether or not evidenced by bonds, debentures, notes or other
written instruments, (ii) any obligation of, or any such obligation guaranteed
by, such Person evidenced by bonds, debentures, notes or similar written
instruments, including obligations assumed or incurred in connection with the
acquisition of property, assets or businesses (provided, however, that the
deferred purchase price of any property, assets or business shall not be
considered Indebtedness if the purchase price thereof is payable in full within
90 days from the date on which such indebtedness was created), and (iii) any
obligations of such Person as lessee under leases required to be capitalized on
the balance sheet of the lessee under generally accepted accounting principles
and leases of property or assets made as part of any sale and lease-back
transaction to which such Person is a party. Indebtedness does not include trade
accounts payable or accrued liability arising in the ordinary course of
business.

         "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of each particular series of Securities established
as contemplated by Section 301, including, for all purposes of this instrument
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.

         "Interest Payment Date" means as to each series of Securities the
Stated Maturity of an installment of interest on such Securities.

                                       4

         "Interest Rate" means the rate of interest specified or determined as
specified in each Security as being the rate of interest payable on such
Security.

         "Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.

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

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

         "Notice of Default" means a written notice of the kind specified in
Section 501(3).

         "Officers' Certificate" means a certificate signed by (i) the Chairman,
President, Chief Executive Officer or any Vice President, and (ii) the
Treasurer, any Associate Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Assistant Secretary, of the Company, and delivered to the
Trustee. One of the officers signing an Officers' Certificate given pursuant to
Section 1004 shall be the principal executive, financial or accounting officer
of the Company.

         "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for (and an employee of) the Company, and who shall be reasonably
acceptable to the Trustee.

         "Original Issue Date" means the date of issuance specified as such in
each Security.

         "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 502.

         "Outstanding" when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:

         (1) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;

         (2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders of
such Securities; provided that, if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and

                                       5

         (3) Securities which have been paid pursuant to Section 306 or 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 Holders in whose hands such Securities are
valid, binding and legal obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, and (C) Securities beneficially owned by the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in
conclusively relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Securities which a Responsible
Officer knows to be so owned shall 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" means the Trustee or any other Person authorized by the
Company to pay the principal of or any premium or interest on any Securities on
behalf of the Company.

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

         "Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of and any premium and interest on the
Securities of such series are payable as specified as contemplated by Section
301.

         "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

                                       6

         "Preferred Stock" shall mean any capital stock entitled by its terms to
a preference (a) as to dividends or (b) upon a distribution of assets.

         "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" when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

         "Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of a series means, unless otherwise provided pursuant to
Section 301 with respect to Securities of a series, the date which is fifteen
days next preceding such Interest Payment Date (whether or not a Business Day).

         "Responsible Officer" shall mean any officer within the corporate trust
department of the Trustee, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other
officer of the Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.

         "Restricted Subsidiary" means Principal Life Insurance Company and any
other Subsidiary which is incorporated in any State of the United States or in
the District of Columbia and which is a regulated insurance company principally
engaged in one or more of the life, annuity, property and casualty insurance
businesses, provided that no such Subsidiary, other than Principal Life
Insurance Company, shall be a Restricted Subsidiary if (i) the total assets of
such Subsidiary are less than 10% of the total assets of the Company and its
consolidated Subsidiaries (including such Subsidiary), in each case as set forth
on the most recent fiscal year-end balance sheets of such Subsidiary and the
Company and its consolidated Subsidiaries, respectively, and computed in
accordance with generally accepted accounting principles, or (ii) in the
judgment of the Board of Directors, as evidenced by a Board Resolution, such
Subsidiary is not material to the financial condition of the Company and its
consolidated Subsidiaries taken as a whole.

         "Securities" or "Security" means any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.

         "Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.

         "Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.

         "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.

                                       7

         "Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable, in the case of
such principal or installment of principal, as such date may be extended or
shortened as provided pursuant to the terms of such Security.

         "Subsidiary" means a corporation, partnership or other entity of which,
at the time of determination, more than 50% of the outstanding voting stock or
equivalent interest is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.

         "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; 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" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall 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 shall mean the Trustee with respect to
the Securities of that series.

         "Vice President" when used with respect to the Company or the Trustee,
means any officer with a title of "Vice President", "Senior Vice President" or
"Executive Vice President".

SECTION 102. Compliance Certificates and Opinions.

         Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture. In the case of an application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.

                                       8

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 1004) shall include:

         (1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;

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

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

         (4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.

SECTION 103. 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.

         Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers, or other management employee of the
Company or any Subsidiary stating that the information with respect to such
factual matters is in the possession of the Company or such Subsidiary, unless
such counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.

         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 104. 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, made
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor

                                       9

signed by such Holders in person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall 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 shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive and may be relied upon by the Trustee,
the Company, and any agent of the Trustee or the Company, if made in the manner
provided in this Section.

         (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 any 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 Person acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.

         (c) The fact and date of the execution by any Person 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 and in
accordance with such reasonable rules as the Trustee may determine.

         (d) The ownership of Securities shall be proved by the Security
Register.

         (e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor 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.

         (f) The Company may, but shall not be obligated to, set any day as a
record date for the purpose of determining the Holders of Outstanding Securities
entitled to give, make or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided or permitted by this Indenture
to be given, made or taken by Holders of Securities, provided that the Company
may not set a record date for, and the provisions of this paragraph shall not
apply with respect to, the giving or making of any notice, declaration, request
or direction referred to in the next paragraph. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Securities on such record
date, and no other Holders, shall be entitled to take the relevant action,
whether or not such Holders remain Holders after such record date; provided that
no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date (as defined below) by Holders of the requisite
principal amount of Outstanding Securities on such record date. Nothing in this
paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been

                                       10

set pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities on the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Company, at its own expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities in the manner set forth in Section 106.

         The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in Section 502, (iii) any request to institute proceedings referred
to in Section 507(2) or (iv) any direction referred to in Section 512. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Trustee, at the Company's
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Company in writing and to
each Holder of Securities in the manner set forth in Section 106.

         With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities in the manner set forth in Section 106, on or prior
to the existing Expiration Date. If an Expiration Date is not designated with
respect to any record date set pursuant to this Section, the party hereto which
set such record date shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.

         Without limiting the foregoing, a Holder entitled hereunder to 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

                                       11

which may do so pursuant to such appointment with regard to all or any part of
such principal amount.

SECTION 105. Notices, Etc., to Trustee and Company.

         Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:

         (1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed to or with the
Trustee in writing at its Corporate Trust Office or

         (2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class, postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company, Attention: [General Counsel].

         Neither the Company nor the Trustee shall be deemed to have received
any such request, demand, authorization, direction, notice, consent, waiver or
Act of Holders unless given, furnished or filed as provided in this Section 105.

SECTION 106. Notice to Holders; Waiver.

         Where this Indenture provides for notice to Holders of any event, such
notice shall 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 the address of such Holder 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 shall
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 shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall 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 shall be impracticable to give such notice by mail,
then such notification as shall be made with the written approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.

SECTION 107. Conflict with Trust Indenture Act.

         If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act which is required under such Act to be a part of and
govern this Indenture,

                                       12

the latter provision shall control. If any provision of this Indenture modifies
or excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.

SECTION 108. Effect of Headings and Table of Contents.

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

SECTION 109. Successors and Assigns.

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

SECTION 110. Separability Clause.

         In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 111. Benefits of Indenture.

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

SECTION 112. Governing Law; Waiver of Jury Trial.

         This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York, without regard to conflicts
of laws principles thereof.

         EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE, THE
SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.

SECTION 113. Legal Holidays.

         In any case where any Interest Payment Date, Redemption Date, Maturity
or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if

                                       13

made on the Interest Payment Date or Redemption Date, or at the Maturity or
Stated Maturity and no interest shall accrue for the period from and after such
Interest Payment Date, Redemption Date, Maturity or Stated Maturity, as the case
may be, if such payment is made or duly provided for on the next succeeding
Business Day, except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day.

SECTION 114. Computations.

         Unless otherwise specifically provided, the certificate or opinion of
any independent firm of public accountants of recognized standing selected by
the Board of Directors shall be conclusive evidence of the correctness of any
computation made under the provisions of this Indenture. The Company shall
furnish to the Trustee upon its request a copy of any such certificate or
opinion.

                                  ARTICLE TWO

                                 SECURITY FORMS

SECTION 201. Forms Generally.

         The Securities of each series shall be substantially in the form
attached as Exhibit A, or in such other form or forms as shall be established by
or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate provisions as are required or
permitted by this Indenture, 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 applicable tax laws or the rules of any securities
exchange or Depositary therefor or as may, consistently herewith, be determined
by the officers executing such Securities, as evidenced by their execution
thereof. 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
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 with respect to the authentication and delivery of
such Securities.

         The Trustee's certificate of authentication shall be substantially in
the form set forth in this Article.

         The definitive Securities shall be printed, typewritten or 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.

         The Securities of each series will initially be issued in the form of
one or more Global Securities. Each such Global Security shall represent such of
the Outstanding Securities of such series as shall be specified therein and each
shall provide that it shall represent the aggregate amount of Outstanding
Securities of such series from time to time endorsed thereon and that the
aggregate amounts of Outstanding Securities of such series

                                       14

represented thereby may from time to time be reduced or increased, as
appropriate. The Global Security or Securities evidencing the Securities of a
series (and all Securities issued in exchange therefore) shall bear the legend
indicated in Section 202.

SECTION 202. Form of Legend for Global Securities.

         Every Global Security authenticated and delivered hereunder shall, in
addition to the provisions contained in Exhibit A, bear a legend in
substantially the following form:

         UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
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 INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

         THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE
THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY
REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN DTC OR SUCH NOMINEE, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

SECTION 203. Form of Trustee's Certificate of Authentication.

         The Trustee's certificates of authentication shall be in substantially
the following form:

                          Certificate of Authentication

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

Dated:
                                    _________________________
                                    as Trustee

                                    By:______________________
                                         Authorized Signatory

                                       15

                                  ARTICLE THREE

                                 THE SECURITIES

Section 301. Title; Terms.

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

      The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of a series:

      (a) the title of the securities of such series, which shall distinguish
the Securities of the series from all other Securities;

      (b) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
or transfer of, or in exchange for, or in lieu of, other Securities of the same
series pursuant to Section 304, 305, 306, 906 or 1108 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder); provided, however, that the authorized
aggregate principal amount of such series may be increased above such amount by
a Board Resolution to such effect;

      (c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof;

      (d) the rate or rates, if any, at which the Securities of such series
shall bear interest or the method of determining such rate or rates, the
Interest Payment Dates on which such interest shall be payable, the right, if
any, of the Company to defer or extend an Interest Payment Date, the Regular
Record Date (if other than as defined in this Indenture) for the interest
payable on any Interest Payment Date and the dates from which interest shall
accrue and the method of determining these dates;

      (e) the place or places where the principal of (and premium, if any) and
interest on the Securities of such series shall be payable, the place or places
where the Securities of such series may be presented for registration of
transfer or exchange, and the place or places where notices and demands to or
upon the Company in respect of the Securities of such series may be made;

      (f) the period or periods within or the date or dates on which, if any,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed or prepaid, in whole or in part, at
the option of the Company;

      (g) the obligation or the right, if any, of the Company to redeem, repay
or purchase the Securities of such series pursuant to any sinking fund,
amortization or

                                       16

analogous provisions or at the option of a Holder thereof and the period or
periods within which, the price or prices at which, the currency or currencies
(including currency unit or units) in which and the other terms and conditions
upon which Securities of the series shall be redeemed, repaid or purchased, in
whole or in part, pursuant to such obligation;

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

      (i) if other than Dollars, the currency or currencies (including currency
unit or units) in which the principal of (and premium, if any) and interest, if
any, on the Securities of the series shall be payable, or in which the
Securities of the series shall be denominated;

      (j) the additions, modifications or deletions, if any, in the Events of
Default or covenants of the Company set forth herein with respect to the
Securities of such series;

      (k) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;

      (l) the additions or changes, if any, to this Indenture with respect to
the Securities of such series as shall be necessary to permit or facilitate the
issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;

      (m) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;

      (n) the issuance of a temporary Global Security representing all of the
Securities of such series and the terms upon which such temporary Global
Security may be exchanged for definitive Securities of such series;

      (o) whether the Securities of the series shall be issued in whole or in
part in the form of one or more Global Securities and, in such case, the
identity of the Depositary for such Global Securities;

      (p) the appointment of any Paying Agent or Agents for the Securities of
such series;

      (q) the terms and conditions of any right or obligation on the part of the
Company, or any option on the part of the Holders, to convert or exchange
Securities of such series into cash or any other securities or property of the
Company or any other Person, and the additions or changes, if any, to this
Indenture with respect to the Securities of such series to permit or facilitate
such conversion or exchange;

      (r) whether the Guarantor will guarantee the obligations of the
Company under the Securities of such series and if so, the specific form of such
Guarantee or Guarantees, any related modifications, amendments, supplements or
deletions of any of the terms of this Indenture, and a statement that the
Guarantor shall be an "obligor" as such term is defined in and solely for
purposes of the Trust Indenture Act and shall be required to comply with those
provisions of this Indenture compliance with which is required by an "obligor"
under the Trust Indenture Act; and

      (s) any other terms of the Securities of such series or any related
Guarantee (which terms shall not be inconsistent with the provisions of the
Trust Indenture Act, but may modify, amend, supplement or delete any of the
terms of this Indenture with respect to such series), including any terms which
may be required by or advisable under United States laws or regulations or
advisable (as determined by the Company) in connection with the marketing of
Securities of the series;

provided, that if the Guarantor will guarantee the obligations of the Company
under the Securities of a series, such matters shall be established in one or
more indenture supplements hereto to which the Company, the Guarantor and the
Trustee shall be a party.

                                       17

      All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided herein or in or
pursuant to such Board Resolution and set forth in such Officers' Certificate or
in any such indenture supplemental hereto.

      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 shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.

Section 302. Denominations.

      The Securities of each series shall be in registered form without coupons
and shall be issuable in denominations of $1,000 and any integral multiples
thereof, unless otherwise specified as contemplated by Section 301.

Section 303. Execution, Authentication, Delivery and Dating.

      The Securities shall be executed on behalf of the Company by its Chairman,
President, Chief Executive Officer or any Vice President. The signature of any
of these officers on the Securities may be manual or facsimile.

      Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall 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.

      At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities 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 shall authenticate and deliver such Securities.

      Notwithstanding the provisions of the preceding paragraph, if all
Securities of a series are not to be originally issued at one time, it shall not
be necessary to deliver the Company Order otherwise required pursuant to such
preceding paragraph at or prior to the authentication of each Security of such
series if such Company Order is delivered at or prior to the authentication upon
original issuance of the first Security of such series to be issued.

      Each Security shall be dated the date of its authentication.

      No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been

                                       18

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 309, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this
Indenture.

      Minor typographical and other minor errors in the text of any Security
shall not affect the validity and enforceability of such Security if it has been
duly authenticated and delivered by the Trustee.

      The Company shall execute and the Trustee shall authenticate and deliver
one or more Global Securities with respect to each series of Securities that (i)
shall represent an aggregate amount equal to the aggregate principal amount of
the initially issued Securities of such series, (ii) shall be registered in the
name of the Depositary or the nominee of the Depositary, (iii) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially in the form required in
Section 202.

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

      The Depositary must, at all times while it serves as such Depositary, be a
clearing agency registered under the Exchange Act, and any other applicable
statute or regulation. Neither the Trustee nor any agent shall have any
responsibility for any actions taken or not taken by the Depositary.

Section 304. Temporary Securities.

      Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, typewritten or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities of any series in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.

      If temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities shall
be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company in a Place of Payment without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of

                                       19

definitive Securities of the same series of authorized denominations and having
the same Original Issue Date and Stated Maturity and having the same terms as
such temporary Securities. Until so exchanged, the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.

Section 305. Registration, Registration of Transfer and Exchange.

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

      Upon surrender for registration of transfer of any Security at the office
or agency of the Company in a Place of Payment, the Company shall execute, and
the Trustee shall authenticate and deliver, 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 tenor and aggregate principal amount, of
the same original Issue Date and Stated Maturity and having the same terms.

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

      At the option of the Holder, Securities may be exchanged for other
Securities, of the same series of any authorized denominations, of like tenor
and aggregate principal amount, of the same Original Issue Date and Stated
Maturity and having the same terms, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.

      If at any time the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary or if at any time the Depositary shall cease to
be a clearing agency registered under the Exchange Act as provided in Section
303, the Company shall appoint a successor Depositary. If a successor Depositary
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such ineligibility, the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
individual Securities, will authenticate and make available for delivery,
individual Securities in an aggregate principal amount equal

                                       20

to the principal amount of the Global Security or Securities representing the
Securities in exchange for such Global Security or Securities.

      The Company may at any time and in its sole discretion determine that
individual Securities issued in the form of one or more Global Securities shall
no longer be represented by such Global Security or Securities. In such event
the Company will execute, and the Trustee, upon receipt of a Company Order for
the authentication and delivery of individual Securities, will authenticate and
make available for delivery, individual Securities in an aggregate principal
amount equal to the principal amount of the Global Security or Securities
representing the Securities in exchange for such Global Security or Securities.

      The Depositary may surrender a Global Security in exchange in whole or in
part for individual Securities on such terms as are acceptable to the Company,
the Trustee and such Depositary. Thereupon, the Company shall execute, and the
Trustee shall authenticate and make available for delivery, without service
charge:

      (1) to each Person specified by such Depositary a new individual Security
or Securities of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's beneficial
interest in the Global Security; and

      (2) to such Depositary a new Global Security in a denomination equal to
the difference, if any, between the principal amount of the surrendered Global
Security and the aggregate principal amount of individual Securities delivered
to Holders thereof.

      Upon the exchange of a Global Security for individual Securities in an
aggregate principal amount equal to the principal amount of such Global
Security, such Global Security shall be canceled by the Trustee. Individual
Securities issued in exchange for a Global Security pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depositary for such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall make available for delivery such individual Securities to the Persons in
whose names such Securities are so registered.

      All Securities issued upon any registration of transfer or exchange of
Securities shall be the 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.

      Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.

      No service charge shall be made to a Holder for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to

                                       21

cover any tax, assessment 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 304, 906 or 1108 not involving any transfer.

      Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section: (i) to issue, register the transfer of or exchange
any Security of any series during a period beginning at the opening of business
15 Business Days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption of Securities pursuant to Article Eleven
and ending at the close of business on the day of such mailing of notice of
redemption; or (ii) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except, in the case of any Security
to be redeemed in part, any portion thereof that is not redeemed.

Section 306. Mutilated, Destroyed, Lost and Stolen Securities.

      If any mutilated Security is surrendered to the Trustee together with such
security or indemnity as may be required by the Company or the Trustee to save
each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same issue
and series, of like tenor and principal amount, having the same Original Issue
Date and Stated Maturity and bearing the same Interest Rate as such mutilated
Security, and bearing a number not contemporaneously outstanding.

      If there shall be delivered to the Company and to 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 issuing Company shall execute and upon its request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same issue and series of like tenor and
principal amount, having the same Original Issue Date and Stated Maturity and
bearing the same Interest Rate as such destroyed, lost or stolen Security, and
bearing a number not contemporaneously outstanding.

      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.

      Upon the issuance of any new Security under this Section, 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.

      Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time

                                       22

enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.

      The provisions of this Section are exclusive and shall 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 307. Payment of Interest; Interest Rights Preserved.

      Interest on any Security of any series which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall 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
in respect of Securities of such series. The initial payment of interest on any
Security of any series which is issued between a Regular Record Date and the
related Interest Payment Date shall be payable as provided in such Security or
in the Board Resolution pursuant to Section 301 with respect to the related
series of Securities.

      Any interest on any Security which is payable, but is not timely paid or
duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest"), shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:

      (1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first class, postage prepaid, to each Holder of a
Security of such series at the address of such Holder as it appears in the
Security Register not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Securities of such

                                       23

series (or their respective Predecessor Securities) are registered at the close
of business on such Special Record Date and shall no longer be payable pursuant
to the following Clause (2).

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

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

Section 308. Persons Deemed Owners.

      The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

      None of the Company, the Trustee nor any agent of the Company or the
Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a
Global Security or maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

Section 309. Cancellation.

      All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall be promptly cancelled 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 shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed by the
Trustee in accordance with its customary procedures. Acquisition by the Company
of any Security shall not operate as

                                       24

a redemption or satisfaction of the indebtedness represented by such Security
unless and until the same is delivered to the Trustee for cancellation.

Section 310. Computation of Interest.

      Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.

Section 311. CUSIP Numbers.

      The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to 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 shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee in writing of any change in the "CUSIP" numbers.

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture.

      This Indenture shall upon 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 of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:

      (1) either

            (A) all Securities theretofore authenticated and delivered (other
      than (i) Securities which have been destroyed, lost or stolen and which
      have been replaced or paid as provided in Section 306 and (ii) Securities
      for whose payment 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 1003) have
      been delivered to the Trustee for cancellation; or

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

                  (i) have become due and payable, or

                                       25

                  (ii) will become due and payable at their Stated Maturity
            within one year of the date of deposit, or

                  (iii) 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 (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds: (A) money in an amount;
(B) Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount; or
(C) a combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee of such series (but such
opinion need only be delivered if Government Obligations have been so
deposited), to pay and discharge, and which shall be applied by the Trustee, to
pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and premium, if any)
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;

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

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

      The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 401 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of Outstanding Securities.

      Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and the preceding
paragraph, the obligations of the Company to any Authenticating Agent under
Section 614 and, if money and/or Government Obligations shall have been
deposited with the Trustee pursuant to subclause (B) of Clause (1) of this
Section, the obligations of the Trustee under Section 402 and the last paragraph
of Section 1003 shall survive.

Section 402. Application of Trust Money.

      Subject to the provisions of the last paragraph of Section 1003, all money
and Government Obligations deposited with the Trustee pursuant to Section 401
and all proceeds of such Government Obligations and the interest thereon, shall
be held in trust

                                       26

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 and Government Obligations have been
deposited with the Trustee.

                                  ARTICLE FIVE

                                    REMEDIES

Section 501. Events of Default.

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

      (1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and such default continues for a period
of 30 days; or

      (2) default in the payment of the principal of or premium, if any, on any
Security of that series at its Maturity; or

      (3) 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 of which or the breach of which is specifically dealt with
elsewhere in this Section), and continuance of such default or breach for a
period of 90 days after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in aggregate 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;
or

      (4) the entry of a decree or order by a court having jurisdiction in the
premises adjudging the Company bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company 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 unstayed and in effect for a period of 90 consecutive days; or

      (5) the institution by the Company of proceedings to be adjudicated
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
of consent seeking reorganization or relief under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the

                                       27

appointment of a receiver, liquidator assignee, trustee, sequestrator (or other
similar official) of the Company or of any substantial part of its property, 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
and its willingness to be adjudicated bankrupt, or the taking of corporate
action by the Company in furtherance of any such action; or

      (6) any other Event of Default specified with respect to Securities of
that series as contemplated in Section 301.

Section 502. Acceleration of Maturity; Rescission and Annulment.

      If an Event of Default (other than an Event of Default specified in
Section 501(4) or 501(5)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) 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) shall become
immediately due and payable. If an Event of Default specified in Section 501(4)
or 501(5) with respect to Securities of a series at the time Outstanding occurs,
the principal amount of all the Securities of such series (or specified amount)
shall automatically, and without any declaration or other action on the part of
the Trustee or any Holder, become immediately due and payable.

      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 provided, the Holders of not less than a majority in aggregate 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:

      (1) 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 borne by such
      Securities,

            (C) to the extent that payment of such interest is lawful, interest
      upon overdue installments of interest at the rate or rates borne by or
      prescribed therefor in such Securities, and

                                       28

            (D) all sums paid or advanced by the Trustee hereunder and the
      compensation, reasonable disbursements, advances and expenses of the
      Trustee, its agents and counsel; and

      (2) all Events of Default with respect to Securities of that series, other
than the non-payment of the principal (or a specified portion of the principal)
of and interest on Securities of that series which has become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
513.

      No such rescission shall affect any subsequent default or impair any right
consequent thereon.

Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

      The Company covenants that if:

      (1) 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 days, or

      (2) default is made in the payment of the principal or premium, if any, on
any Security at the Maturity thereof,

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, including any sinking fund payment or analogous
obligations (and premium, if any) and interest, including, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal or premium, if any, and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the compensation, reasonable disbursements, advances and expenses of
the Trustee, its agents and counsel.

      If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.

      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.

                                       29

Section 504. Trustee May File Proofs of Claim.

      In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors:

      (a) the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise,

            (i) 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, and

            (ii) in particular, the Trustee shall be authorized to collect and
      receive any moneys or other property payable or deliverable on any such
      claims and to distribute the same in accordance with Section 506; and

      (b) 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 for distribution in
accordance with Section 506, 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 it for the compensation, reasonable disbursements, advances and
expenses of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.

      No provision of this Indenture 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; 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.

Section 505. Trustee May Enforce Claims Without Possession of Securities.

      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 shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the compensation, reasonable disbursements, advances and
expenses of the Trustee, 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 506. Application of Money Collected.

      Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or

                                       30

property on account of principal or premium, if any, 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 and any predecessor
Trustee under Section 607;

      SECOND: To the payment of the amounts then due and unpaid upon such series
of Securities for principal (and premium, if any) and interest 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 series of Securities for principal (and premium, if any) and
interest, respectively; and

      THIRD: To the payment of the remainder, if any, to the Company, its
successors or assigns or to whomsoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.

Section 507. Limitation on Suits.

      No Holder of any Securities of any series shall 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:

      (1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;

      (2) the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of that series have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;

      (3) such Holder or Holders have offered to the Trustee security or
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;

      (4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and

      (5) 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 aggregate
principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall 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 (it being understood that the Trustee does not have an affirmative
duty to ascertain whether or not such actions or forbearances are unduly
prejudicial to 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

                                       31

Indenture, except in the manner herein provided and for the equal and ratable
benefit of all of such Holders.

Section 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.

      Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
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 shall
not be impaired without the consent of such Holder.

Section 509. 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 shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.

Section 510. Rights and Remedies Cumulative.

      Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, 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 shall, 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, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

Section 511. Delay or Omission Not Waiver.

      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 shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to 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 512. Control by Holders.

      The Holders of a majority in aggregate principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any

                                       32

trust or power conferred on the Trustee, with respect to the Securities of such
series, provided that:

      (1) such direction shall not be in conflict with any rule of law or with
this Indenture, involve the Trustee in personal liability or be unduly
prejudicial to the Holders of the Securities not joining in the action; and

      (2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.

Section 513. Waiver of Past Defaults.

      The Holders of not less than a majority in aggregate 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:

      (1) in the payment of the principal of, or premium, if any, or interest
on, any Security of such series; or

      (2) in respect of a covenant or provision hereof which under Article Nine
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 shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.

Section 514. Undertaking for Costs.

      All parties to this Indenture agree, and each holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, any party litigant in such suit to file an
undertaking to pay the costs of such suit, and that court may in its discretion
assess reasonable costs, including reasonable attorneys' fees, against any such
party litigant in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant, in the manner and to the
extent provided in the Trust Indenture Act; provided, that neither this Section
nor the Trust Indenture Act shall be deemed to authorize any court to require
such an undertaking or to make such an assessment in any suit instituted by the
Company or by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of any series, or any suit instituted by any Holder for
the enforcement of the payment of the principal of (or premium, if any) or
interest on any Security on or after the respective Stated Maturities expressed
in such Security (or in the case of redemption, on the Redemption Date).

                                       33

Section 515. Waiver of Usury, Stay or Extension Laws.

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

                                   ARTICLE SIX

                                   THE TRUSTEE

Section 601. Certain Duties and Responsibilities.

      (a) Except during the continuance of an Event of Default,

            (i) the Trustee undertakes to perform such duties and only such
      duties as are specifically set forth in this Indenture, and no implied
      covenants or obligations shall be read into this Indenture against the
      Trustee; and

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

      (b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.

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

            (i) this Subsection shall not be construed to limit the effect of
      Subsection (a) of this Section;

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

                                       34

            (iii) the Trustee shall not be liable with respect to any action
      taken or omitted to be taken by it in good faith in accordance with the
      direction of the Holders of a majority in principal amount of the
      Outstanding Securities of any series, determined as provided in Sections
      101, 104 and 512, relating to the time, method and place of conducting any
      proceeding for any remedy available to the Trustee, or exercising any
      trust or power conferred upon the Trustee, under this Indenture with
      respect to the Securities of such series; and

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

      (d) 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 shall be subject to the provisions of this Section.

Section 602. Notice of Defaults.

      If a default occurs hereunder with respect to the Securities of a series,
the Trustee within 90 days of such default shall give the Holders notice of such
default 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
501(3) with respect to such Securities, no such notice to Holders shall be given
until at least 30 days after the occurrence thereof; and provided, further, that
the Trustee may withhold notice to the Holders, of any default with respect to
Securities of a series (except any default of the character specified in Section
501(1) and (2)), if and so long as the board of directors, the executive
committee or a trust committee of directors or Responsible Officers of the
Trustee in good faith determine that the withholding of the notice is in the
interest of the Holders of such Securities. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to the Securities of a
series.

Section 603. Certain Rights of Trustee.

      Subject to the provisions of Section 601:

      (1) the Trustee may conclusively rely and shall 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;

      (2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;

                                       35

      (3) 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 Officers' Certificate and may at its discretion secure such further
evidence deemed necessary or advisable, but shall in no case be bound to secure
the same;

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

      (5) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, 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 shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;

      (6) 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 shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;

      (7) the Trustee's immunities and protections from liability and its rights
to compensation and indemnification in connection with the performance of its
duties under this Indenture shall extend to the Trustee's officers, directors,
agents and employees and its services as Paying Agent, Security Registrar or any
other role assumed by the Trustee hereunder or to which it has been appointed
with respect to the Securities issued hereunder. Such immunities and protections
and right to indemnification, together with the Trustee's right to compensation,
shall survive the Trustee's resignation or removal and final payment of the
Securities;

      (8) the Trustee is not required to give any bond or surety with respect to
the performance of its duties or the exercise of its powers under this
Indenture;

      (9) the Trustee shall not be deemed to have actual knowledge of any
"default" or Event of Default hereunder except (i) during any period it is
serving as Paying Agent for the Securities of a series, any Event of Default
pursuant to Section 501(1) or (2), or (ii) any default or Event of Default of
which a Responsible Officer shall have received written notification from the
Company or the Holders of at least 25% in aggregate principal amount of the
Securities of the series with respect to which such default or Event of Default
has occurred and is continuing or obtained "actual knowledge." The term "actual
knowledge" as used herein shall mean the actual fact or statement of knowing by
a Responsible Officer without independent investigation with respect thereto.

                                       36

The term "default" as used in this Section 603 shall mean any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of a series;

      (10) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture (other than the payment of debt
service on the Securities from moneys furnished to it pursuant hereto), whether
at the request or direction of the Holders or any other Person, pursuant to this
Indenture or otherwise, unless it shall have been offered indemnity or security
satisfactory to it against the fees, advances, costs, expenses and liabilities
which might be incurred by it in connection with the exercise of any such rights
or powers;

      (11) in no event shall the Trustee be responsible or liable for special,
indirect, or consequential loss or damage of any kind whatsoever (including, but
not limited to, loss of profit) irrespective of whether the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of
action; and

      (12) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.

      Notwithstanding anything else herein contained, (i) the Trustee shall not
be liable for any error of judgment made in good faith by any officer of the
Trustee and (ii) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it believes the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.

Section 604. Not Responsible for Recitals or Issuance of Securities.

      The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall 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. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.

Section 605. 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
608 and 613, 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.

                                       37

SECTION 606. Money Held in Trust.

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

SECTION 607. Compensation and Reimbursement.

         The Company agrees:

         (1) to pay to the Trustee from time to time compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);

         (2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the compensation, reasonable disbursements and expenses of
its agents or attorneys), except any such expense, disbursement or advance as
may be attributable to the negligence or bad faith of it or of its agents or
attorneys;

         (3) to indemnify each of the Trustee or any predecessor Trustee and
their agents for, and to hold them harmless against, any and all loss, damage,
claim, liability or expense, including taxes (other than taxes based upon,
measured by or determined by the income of the Trustee), 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 (whether asserted by the Company, or any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, or in connection with enforcing the provisions of this
Section, except to the extent that such loss, damage, claim, liability or
expense is due to its own negligence or bad faith; and

         (4) without limiting any rights available to the Trustee under
applicable law, that when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(4) or Section
501(5), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.

SECTION 608. Disqualification; Conflicting Interests.

         If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by the Trust Indenture Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series.

                                       38

SECTION 609. Corporate Trustee Required; Eligibility.

         The Trustee shall at all times satisfy the requirements of TIA
Section 310(a). The Trustee shall (i) be a corporation organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, (ii) be authorized under such laws to exercise
corporate trust powers, (iii) have a combined capital and surplus of at least
$50,000,000, and (iv) be subject to supervision or examination by Federal or
State authority. If such corporation files 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, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so filed. If the
Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of,
the Trust Indenture Act and this Indenture. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article Six. Neither the Company nor any Person directly or indirectly
controlling, controlled by or under common control with the Company shall serve
as Trustee for the Securities of any series issued hereunder.

SECTION 610. Resignation and Removal; Appointment of Successor.

         No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.

         The Trustee may resign as Trustee 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 611 shall not have been delivered to the resigning Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may,
at the expense of the Company, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

         The Trustee may be removed as Trustee hereunder 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 at any time an instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the Trustee within 30
days after the date a notice of removal is delivered to the Trustee, the Trustee
being removed may, at the expense of the Company, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.

         If at any time:

                                       39

         (1) the Trustee shall fail to comply with Section 608 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; or

         (2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder; or

         (3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,

then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee, or (B) subject to Section 514, 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 and the appointment of a successor Trustee or Trustees.

         If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series and shall comply with the applicable
requirements of Section 611. 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 shall be 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 shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, 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 611, any
Holder who has been a bona fide Holder of a Security for at least six months
may, subject to Section 514, 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.

         The Company shall 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 by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.

                                       40

SECTION 611. Acceptance of Appointment by Successor.

         (a) In the case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
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 shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall 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 shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor 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 and
each successor Trustee with respect to the Securities of one or more series
shall execute and deliver an indenture supplemental hereto wherein each
successor trustee shall accept such appointment and which (1) shall contain such
provisions as shall 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, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall 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 shall 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 shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in the paragraph (a) or (b) of this Section, as the case may be.

                                       41

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

SECTION 612. 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 shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, 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 613. Preferential Collection of Claims Against Company.

         If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

SECTION 614. Appointment of Authenticating Agent.

         The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall 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 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall 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 shall 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,
Territory 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 files 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, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
filed.

                                       42

         If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.

         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
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent, shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.

         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 of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall 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 shall be appointed unless eligible
under the provisions of this Section.

         The Company agrees to pay to each Authenticating Agent from time to
time compensation for its services under this Section as agreed to in writing
between the parties.

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

                                       43

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

                                          --------------------------------------
                                          as Trustee

                                          By:
                                              ----------------------------------
                                                As Authenticating Agent

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

                                 ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701.Company to Furnish Trustee Names and Addresses of Holders.

         The Company will furnish or cause to be furnished to the Trustee:

         (1) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such Regular Record Date; and

         (2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished; provided, that no such list need be provided in any case to the
extent it would include names and addresses received by the Trustee in its
capacity as Security Registrar.

SECTION 702. Preservation of Information; Communications to Holders.

         The Trustee shall 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 701 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 701 upon receipt of a new list so furnished.

         The rights of 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, shall be as provided by the Trust
Indenture Act.

         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 shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.

                                       44

SECTION 703. Reports by Trustee.

         The Trustee shall 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 pursuant thereto. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
60 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 shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange, if any, upon which
any Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee whenever any Securities are listed on any stock exchange
and any delisting thereof.

SECTION 704. Reports by Company.

         The Company shall:

         (1) file with the Trustee, within 15 days after the Company is required
to file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company
is not required to file information, documents or reports pursuant to either of
said Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;

         (2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and

         (3) transmit by mail, to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to Clauses (1) and (2) of this Section as
may be required by rules and regulations prescribed from time to time by the
Commission.

         Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its

                                       45

covenants hereunder (as to which the Trustee is entitled to rely exclusively on
Officers' Certificates).

                                 ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.

         (a) Subject to Section 801(c), the Company shall not consolidate with
or merge with or into any other Person or convey, transfer or lease its assets
substantially as an entirety to any Person, and the Company shall not permit any
Person to consolidate with or merge with or into the Company, unless:

         (1) the Company is the surviving corporation in a merger or
consolidation; or

         (2) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its assets substantially as an entirety to
any Person, the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer, or which leases,
the assets of the Company substantially as an entirety shall be a corporation,
partnership, trust or limited liability company, organized and validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, the due and punctual payment of
the principal of and any premium and interest on all the Securities and the
performance or observance of every covenant of this Indenture on the part of the
Company to be performed or observed; and

         (3) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing; and

         (4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with.

         (b) Subject to Section 801(c), any indebtedness which becomes an
obligation of the Company or any Subsidiary as a result of any such transaction
shall be treated as having been incurred by the Company or such Subsidiary at
the time of such transaction.

         (c) The provisions of Section 801(a) and (b) shall not be applicable
to:

         (1) the direct or indirect conveyance, transfer or lease of all or any
portion of the stock, assets or liabilities of any of the Company's wholly owned
Subsidiaries to the Company or to other wholly owned Subsidiaries of the
Company; or

                                       46

         (2) any recapitalization transaction, a change of control of the
Company or a highly leveraged transaction unless such transaction or change of
control is structured to include a merger or consolidation by the Company or the
conveyance, transfer or lease of the Company's assets substantially as an
entirety.

SECTION 802. Successor Corporation Substituted.

         Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the assets of the
Company substantially as an entirety in accordance with Section 801, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of any lease,
the Company shall be relieved of all obligations and covenants under this
Indenture and the Securities and may be dissolved and liquidated.

         In case of any such consolidation, merger, conveyance, transfer or
lease, such changes in phraseology and form may be made in the Securities
thereafter to be issued as may be appropriate.

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders.

         Without the consent of 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 or, if applicable, into
agreements supplemental to any Guarantee, in form satisfactory to the Trustee,
for any of the following purposes:

         (1) 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 or, if applicable, to evidence the succession of another Person
to the Guarantor and the assumption by any such successor of the Guarantor's
obligations under any Guarantee (in either case with such changes herein and
therein as may be necessary or advisable to reflect such Person's legal status,
if such Person is not a corporation); or

         (2) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or to surrender any right or power herein conferred upon the
Company; or

         (3) to provide for the issuance under this Indenture of Securities in
bearer form (including securities registrable as to principal only) and to
provide for exchangeability of such Securities for Securities issued hereunder
in fully registered form, and to make all appropriate changes for such purpose;
or

         (4) to establish the form or terms of Securities of any series as
permitted by Sections 201 or 301; or

                                       47

         (5) to add to the covenants of the Company or the Guarantor for the
benefit of the Holders of all Securities or any series of Securities (and if
such covenants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the benefit
of such series) or to surrender any right or power herein conferred upon the
Company or the Guarantor; or

         (6) to add any additional Events of Default; or

         (7) to secure the Securities; or

         (8) 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 provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee pursuant to the requirements of Section 611(b); or

         (9) to cure any ambiguity, to correct or supplement any provision
herein, in any Securities or in any Guarantee, 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 as the Company
and the Trustee may deem necessary and desirable, provided that such action
pursuant to this Clause (9) shall not adversely affect the interests of the
Holders of Securities of any series in any material respect; or

         (10) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture or any Guarantee under
the Trust Indenture Act or otherwise as necessary to comply with applicable law;
or

         (11) to make any change that does not adversely affect the rights of
any Holder in any material respect.

SECTION 902. Supplemental Indentures With Consent of Holders.

         With the consent of the Holders of not less than 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 and, if applicable,
the Guarantor and the Trustee may enter into an agreement or agreements
supplemental hereto to add to or to change or eliminate any provisions of a
Guarantee; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby:

         (1) change the Stated Maturity of the principal of, or any installment
of interest payable on, any Outstanding Security, or reduce the principal amount
of or the rate of interest thereon or any premium payable upon the redemption
thereof, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon redemption or would be provable in
bankruptcy, or adversely affect any right of repayment of the Holder of any
Security or change the Place of Payment or the coin or currency in which, any
Outstanding Security or the interest thereon is payable, or impair

                                       48

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); or

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

         (3) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage 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 shall 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 and Section 1008, or the deletion of this
proviso, in accordance with the requirements of Sections 611 and 901(8).

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

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

SECTION 903. Execution of Supplemental Indentures.

         In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture, and
that all conditions precedent have been complied with. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties, protections, privileges, indemnities,
liabilities or immunities under this Indenture or otherwise.

SECTION 904. Effect of Supplemental Indentures.

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

                                       49

SECTION 905. Conformity with Trust Indenture Act.

      Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.

SECTION 906. Reference in Securities to Supplemental Indentures.

      Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall 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 Board of Directors, 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 TEN

                                    COVENANTS

SECTION 1001. Payment of Principal, Premium and Interest.

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

      Unless otherwise specified as contemplated by Section 301, the Company
shall pay interest on overdue amounts at the rate set forth in the first
paragraph of the Securities, and it shall pay interest on overdue interest at
the same rate (to the extent that the payment of such interest shall be legally
enforceable), which interest on overdue interest shall accrue from the date such
amounts became overdue.

SECTION 1002. Maintenance of Office or Agency.

      The Company will maintain in the Borough of Manhattan, The City of New
York and each other Place of Payment for any series, an office or agency where
Securities of that series may be presented or surrendered for payment, and an
office or agency where Securities may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company
initially appoints the Trustee, acting through its Corporate Trust Office, as
its agent for said purposes. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of any 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.

                                       50

      The Company may also from time to time designate one or more other offices
or agencies where the Securities 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 shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York and each other 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 1003. Money for Securities Payments to Be Held in Trust.

      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 premium, if any, or interest on any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, premium, if any, and any 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.

      Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of the principal of or interest on any Securities, deposit with
a Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, 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.

      The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will (1) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent, (2) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities) in the making of any payment
of principal (and premium, if any) or interest, and (3) at any time during the
continuance of any such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

      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 the Company or any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.

      Any money or U.S. Government Obligation (including the proceeds thereof
and the interest thereon) deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any

                                       51

Security and remaining unclaimed for two years after such principal, premium, if
any, or interest has become due and payable shall be paid to the Company at its
option on Company Request (unless otherwise required by mandatory provision of
applicable escheat or abandoned or unclaimed property law) or (if then held by
the Company) shall (unless otherwise required by mandatory provision of
applicable escheat or abandoned or unclaimed property law) be discharged from
such trust; and the Holder of such Security shall 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, shall 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 shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

SECTION 1004. Statement by Officers as to Default.

      The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate covering the preceding fiscal year, stating whether or not, to the
best knowledge of the signers thereof, 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 shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.

SECTION 1005. Existence.

      Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its legal
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.

SECTION 1006. Payment of Taxes.

      The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all taxes, assessments and governmental
charges levied or imposed upon the Company or any Restricted Subsidiary or upon
the income, profits or property of the Company or any Restricted Subsidiary, and
lawful claims for labor, materials and supplies, which, if unpaid, might by law
become a Lien upon the property of the Company or any Restricted Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment or governmental charge
whose amount, applicability or validity is being

                                       52

contested in good faith by appropriate proceedings or where the failure to
effect such payment is not adverse in any material respect to the Holders of the
Securities.

SECTION 1007. Limitation on Liens.

      The Company will not, nor will it permit any Restricted Subsidiary,
directly or indirectly, to, create, issue, assume, incur, or guarantee or become
liable with respect to indebtedness for money borrowed if such indebtedness is
secured by a Lien on any present or future common stock of any Restricted
Subsidiary (whether such shares of common stock are now owned or hereafter
acquired) without in any such case making or causing to be made effective a
provision (and the Company covenants that in any such case it shall make or
cause to be made effective such provision) whereby the Securities, will be
secured equally and ratably with, or prior to, such indebtedness or guarantee;
it being understood that in such event the Company may also so secure any other
such indebtedness of the Company or such Restricted Subsidiary entitled thereto,
subject to any applicable priority of payment.

SECTION 1008. Waiver of Certain Covenants.

      The Company may omit in any particular instance to comply with any term,
provision, covenant or condition set forth in any covenant provided pursuant to
Section 901(5) for the benefit of the Holders or in any of Sections 1006 and
1007, with respect to the Securities of any series if before or after the time
for such compliance the Holders of at least 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 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 1009. Calculation of Original Issue Discount.

      The Company shall 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 relevant under the
Internal Revenue Code of 1986, as amended from time to time.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

SECTION 1101. Company's Right of Redemption.

      Unless otherwise specified as contemplated by Section 301 with respect to
the Securities of a particular series, and notwithstanding any additional
redemption rights that may be so specified, the Company may, at its option,
redeem the Securities of any series

                                       53

after their date of issuance in whole or in part at any time and from time to
time, subject to the provisions of this Section 1101 and the other provisions of
this Article Eleven. Unless otherwise specified as contemplated by Section 301
with respect to the Securities of a particular series, the redemption price for
any Security so redeemed shall be equal to 100% of the principal amount of such
Securities then Outstanding plus accrued and unpaid interest up to, but
excluding, the date fixed for redemption; provided, however, that installments
of accrued and unpaid 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 Regular Record Dates according to their terms and the provisions of
Section 307.

SECTION 1102. Applicability of Article.

      Redemption of Securities, as permitted or required by any form of Security
issued pursuant to this Indenture or the documentation providing therefor, shall
be made in accordance with such form of Security or documentation and this
Article Eleven; provided, however, that if any provision of any such form of
Security or documentation shall conflict with any provision of this Article, the
provision of such form of Security or documentation shall govern. Except as
otherwise set forth in the form of Security for such series or such
documentation, each Security shall be subject to partial redemption only in the
amount of $1,000 or integral multiples of $1,000.

SECTION 1103. Election to Redeem; Notice to Trustee.

      The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election of
the Company of the Securities of a series, the Company shall, at least 45 days
but not more than 60 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date, of the principal amount of Securities to be
redeemed and, if applicable, of the tenor of the Securities to be redeemed. In
the case of any redemption of Securities (a) prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or (b)
pursuant to an election of the Company which is subject to a condition specified
in the terms of such Securities, the Company shall furnish the Trustee with an
Officers' Certificate and an Opinion of Counsel evidencing compliance with such
restriction or condition.

SECTION 1104. Selection by Trustee of Securities to Be Redeemed.

      If less than all the Securities are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 45 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities not previously called for redemption, by such
method as the Trustee in its sole discretion shall deem fair and appropriate and
which may provide for the selection for redemption of a portion of the principal
amount of any Security, provided that the unredeemed portion of the principal
amount of any Security shall be in an authorized denomination (which shall not
be less than the minimum authorized denomination) for

                                       54

such Security. If less than all the Securities and of a specified tenor are to
be redeemed (unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 45 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities and
specified tenor not previously called for redemption in accordance with the
preceding sentence.

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

      The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

      For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
If the Company shall so direct, Securities registered in the name of the
Company, any Affiliate or any Subsidiary thereof shall not be included in the
Securities selected for redemption.

SECTION 1105. Notice of Redemption.

      Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at its address appearing in the
Security Register. Unless the Company defaults in payment of the Redemption
Price, on and after the Redemption Date, interest shall cease to accrue on the
Securities.

      All notices of redemption shall state:

      (1) the Redemption Date;

      (2) the Redemption Price, or if not then ascertainable, the manner of
calculation thereof;

      (3) if less than all the Outstanding Securities consisting of more than a
single Security are to be redeemed, the identification (and, in the case of
partial redemption of any such Securities, the principal amounts) of the
particular Securities to be redeemed and, if less than all the Outstanding
Securities consisting of a single Security are to be redeemed, the principal
amount of the particular Security to be redeemed;

      (4) 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;

                                       55

      (5) the place or places where each such Security is to be surrendered for
payment of the Redemption Price; and

      (6) the CUSIP numbers, if any.

      Notice of redemption of Securities to be redeemed at the election of the
Company shall 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 shall be irrevocable.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such notice
In any case, a failure to give such notice by mail or any defect in the notice
to the Holder of any Security designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Security.

SECTION 1106. Deposit of Redemption Price.

      Prior to 10:00 a.m. New York City time on any Redemption 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 1003) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.

SECTION 1107. Securities Payable on Redemption Date.

      Notice of redemption having been given pursuant to Section 1105, the
Securities to be so redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear or accrue any interest.
Upon surrender of any such Security for redemption in accordance with said
notice, such Security shall be paid by the Company at the Redemption Price,
together with any accrued but unpaid interest to, but excluding, the Redemption
Date; provided, however, that installments of accrued and unpaid 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 Regular Record Dates according to
their terms and the provisions of Section 307.

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

SECTION 1108. Securities Redeemed in Part.

      Any Security which is to be redeemed only in part shall 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),

                                       56

and the Company shall execute, and the Trustee shall authenticate and deliver to
the Holder of such Security without service charge, a new Security or Securities
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 TWELVE

                       DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1201. Company's Option to Effect Defeasance or Covenant Defeasance.

      The Company may elect, at its option at any time, to have Section 1202 or
Section 1203 applied to any Securities upon compliance with the conditions set
forth below in this Article. Any such election shall be evidenced by a Board
Resolution.

SECTION 1202. Defeasance and Discharge.

      Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities, the Company shall be deemed to have been discharged
from its obligations with respect to such Securities as provided in this Section
on and after the date the conditions set forth in Section 1204 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other obligations
under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Company and upon Company
Request, shall execute proper instruments acknowledging the same), subject to
the following, which shall survive until otherwise terminated or discharged
hereunder: (1) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003; (2) the rights, powers, trusts, duties
and immunities of the Trustee hereunder, including but not limited to those
enumerated under Sections 601, 603 and 607; and (3) this Article. Subject to
compliance with this Article, the Company may exercise its option (if any) to
have this Section applied to any Securities notwithstanding the prior exercise
of its option (if any) to have Section 1203 applied to such Securities.

SECTION 1203. Covenant Defeasance.

      Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities (1) the Company shall be released from its obligations
under Sections 801, Sections 1006 and 1007, and any covenants provided pursuant
to 901(5) for the benefit of the Holders of such Securities; and (2) the
occurrence of any event specified in Sections 501(3) (with respect to any of
Section 801, Sections 1006 and 1007, and any such covenants provided pursuant to
Section 901(5)) shall be deemed not to be or result in an Event of Default, in
each case with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 1204 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that,

                                       57

with respect to such Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such specified Section (to the extent so specified in the case of Section
501(3)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.

      Notwithstanding any Covenant Defeasance with respect to Section 801, any
Person that would otherwise have been required to assume the obligations of the
Company pursuant to said Section shall be required, as a condition to any
merger, consolidation, conveyance, transfer or lease contemplated thereby, to
assume the obligations of the Company to the Trustee under Sections 607 and
1205.

SECTION 1204. Conditions to Defeasance or Covenant Defeasance.

      The following shall be the conditions to the application of Section 1202
or Section 1203 to any Securities:

      (1) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee which satisfies the requirements
contemplated by Section 609 and agrees to comply with the provisions of this
Article applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefits of the Holders of such Securities, (A) money in an amount, or
(B) Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(C) a combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or any such other qualifying trustee)
to pay and discharge, the principal of and any premium and interest on such
Securities on the respective Stated Maturities or on the Redemption Date, in
accordance with the terms of this Indenture and such Securities.

      (2) In the event of an election to have Section 1202 apply to any
Securities, the Company shall have delivered to the Trustee an Opinion of
Counsel stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of
this instrument, there has been a change in the applicable Federal income tax
law, in the case of either (A) or (B) to the effect that, and based thereon such
opinion shall confirm that, the Holders of such Securities 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 such Securities 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.

      (3) In the event of an election to have Section 1203 apply to any
Securities, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the

                                       58

Holders of such Securities 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 such Securities 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.

      (4) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such deposit or,
with regard to any such event specified in Sections 501(4) and (5), at any time
on or prior to the 90th day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until after such 90th day).

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

      (6) Such Defeasance or Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within the meaning
of the Investment Company Act unless such trust shall be registered under the
Investment Company Act or exempt from registration thereunder.

      (7) If such Securities are to be redeemed prior to Stated Maturity (other
than from mandatory sinking fund payments or analogous payments), notice of such
redemption shall have been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee shall have been made.

      (8) The Company shall have delivered to the Trustee an Officers'
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 1205. Deposited Money and Government Obligations to Be Held in Trust;
              Miscellaneous Provisions.

      Subject to the provisions of the last paragraph of Section 1003, all money
and Government Obligations (including the proceeds thereof and the interest
thereon) deposited with the Trustee or other qualifying trustee (solely for
purposes of this Section and Section 1206, the Trustee and any such other
trustee are referred to collectively as the "Trustee") pursuant to Section 1204
in respect of any Securities shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal 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.

      The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to

                                       59

Section 1204 or the principal and interest received in respect thereof other
than any such tax, fee or other charge which by law is for the account of the
Holders of Outstanding Securities.

      Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations held by it as provided in Section 1204 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.

SECTION 1206. Reinstatement.

      If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or Governmental Authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1202 or 1203 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1205 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.

SECTION 1207. Qualifying Trustee.

      Any trustee appointed pursuant to Section 1204 for the purpose of holding
trust funds deposited pursuant to that Section shall be appointed under an
agreement in form acceptable to the Trustee and shall provide to the Trustee a
certificate of such trustee, upon which certificate the Trustee shall be
entitled to conclusively rely, that all conditions precedent provided for herein
to the related Defeasance or Covenant Defeasance have been complied with. In no
event shall the Trustee be liable for any acts or omissions of said trustee.

                                      * * *

                                       60

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

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

PRINCIPAL FINANCIAL GROUP, INC.

By:   ________________________
      Name:
      Title:

THE BANK OF NEW YORK,
as Trustee

By:   ________________________
      Name:
      Title:

                                       61

                                    EXHIBIT A

                                 [SPECIMEN BOND]

                           (FORM OF FACE OF SECURITY)

[If the Security is an Original Issue Discount Security, insert -- For purposes
of Section 1271 of the United States Internal Revenue Code of 1986, as amended,
the issue price of this security is __ % of its principal amount and the Issue
Date is ______________, 20__]

                         PRINCIPAL FINANCIAL GROUP, INC.
                               [Title of Security]

                                                          CUSIP: _______________

No. _______                                                         $ __________

      PRINCIPAL FINANCIAL GROUP, INC., a corporation organized and existing
under the laws of Delaware (hereinafter called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to [Insert if Global Security-Cede &
Co.], or registered assigns, the principal sum of ___________ Dollars on
_____________ [If the Security is to bear interest prior to Maturity, insert --
, and to pay interest thereon from _____________ or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on __________ and __________ in each year, commencing __________,
at the rate of __ % per annum, on the basis of a 360-day year consisting of
twelve 30-day months, until the principal hereof is paid or duly provided for or
made available for payment] [(If applicable insert - , and (to the extent that
the payment of such interest shall be legally enforceable) at the rate of __%
per annum on any overdue principal and premium and on any overdue installment of
interest)].

      [If the Security is to bear interest prior to Maturity, insert -- The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in the Indenture, be paid to the Person in whose
name this 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 date which is fifteen days (whether or not a Business Day) next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will 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 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

                                       A-1

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].

      [If the Security is not to bear interest prior to Maturity, insert - The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ___% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of __% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or duly
provided for, and such interest shall also be payable on demand.]

      Payment of the principal of (and premium, if any) and [if applicable,
insert - any interest] on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of 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 [if applicable, insert -;
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 shall appear in the Security Register].

      Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

      Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                      A-2

      IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                         PRINCIPAL FINANCIAL GROUP, INC.

                                         By:____________________________________
                                              Name:
                                              Title:

                                         By:____________________________________
                                              Name:
                                              Title:

                          CERTIFICATE OF AUTHENTICATION

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

                                         THE BANK OF NEW YORK,
                                           as Trustee

                                         By:____________________________________
                                                Authorized Officer

Dated:

                                      A-3

                           FORM OF REVERSE OF SECURITY

      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 a Senior Indenture, dated as of ___________, ___ as supplemented
and amended from time to time by ______________ (herein called the "Indenture"),
between the Company and The Bank of New York, 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 [if applicable insert --, limited in aggregate principal amount
to $___________].

      All terms used in this Security that are defined in the Indenture shall
have the meaning assigned to them in the Indenture.

      [If applicable, insert - The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, at any
time [on or after ____________, 20__], as a whole or in part, at the election of
the Company. The Redemption Price for any Security so redeemed shall be equal to
100% of the principal amount of such Securities then Outstanding plus accrued
and unpaid interest up to but not including the date fixed for redemption. In
the event of redemption of this Security in part only, a new Security or
Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.]

      [Installments of accrued and unpaid interest whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holders of the Securities
of this series, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular Record Dates according to their
terms.]

      The Indenture contains provisions for satisfaction, discharge and
defeasance of the entire indebtedness on this security, upon compliance by the
Company with certain conditions set forth therein.

      [If the Security is not an Original Issue Discount Security, - 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.] [If
the security is an Original Issue Discount Security, - If an Event of Default
with respect to Securities of this series shall occur and be continuing, an
amount of principal of the Securities of this series may be declared due and
payable in the manner and with the effect provided in the Indenture. Such amount
shall be equal to - insert formula for determining the amount.

      Upon payment of the amount of principal so declared due and payable [if
applicable insert-- and of interest on any overdue principal and overdue
interest (in each

                                      A-4

case to the extent that the payment of such interest shall be legally
enforceable)], all of the Company's obligations in respect of the payment of the
principal of and interest, if any, on the Securities of this series shall
terminate.]

      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 herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

      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 premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

      As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable 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
premium, if any) 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, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

      The Securities of this series are issuable only in registered form without
coupons in denominations of $______ and any integral multiple 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 of a different authorized denomination, as
requested by the Holder surrendering the same.

      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.

      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,

                                      A-5

whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.

      THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.

      EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE, THIS
SECURITY OR THE TRANSACTION CONTEMPLATED HEREBY.

                                      A-6

                                                                    Exhibit 4.04

================================================================================

                         PRINCIPAL FINANCIAL GROUP, INC.

                                       TO

                              THE BANK OF NEW YORK
                                     Trustee

                             SUBORDINATED INDENTURE

                              Dated as of --, 200--

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

================================================================================

                                TABLE OF CONTENTS

                                                                          Page
                                                                          ----

ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION......   1

  SECTION 101.       DEFINITIONS.........................................   1
    Act..................................................................   2
    Affiliate............................................................   2
    Authenticating Agent.................................................   2
    Board of Directors...................................................   2
    Board Resolution.....................................................   2
    Business Day.........................................................   2
    Commission...........................................................   2
    Company..............................................................   2
    Company Request and Company Order....................................   3
    Corporate Trust Office...............................................   3
    corporation..........................................................   3
    Covenant Defeasance..................................................   3
    Defaulted Interest...................................................   3
    Defeasance...........................................................   3
    Depositary...........................................................   3
    Dollar...............................................................   3
    Event of Default.....................................................   3
    Exchange Act.........................................................   3
    Expiration Date......................................................   3
    Foreign Currency.....................................................   3
    Global Security......................................................   4
    Governmental Authority...............................................   4
    Government Obligations...............................................   4
    Guarantee............................................................   4
    Guarantor............................................................   4
    Holder...............................................................   4
    Indebtedness.........................................................   4
    Indenture............................................................   5
    Interest Payment Date................................................   5
    Interest Rate........................................................   5
    Investment Company Act...............................................   5
    Junior Subordinated Payment..........................................   5
    Lien.................................................................   5
    Maturity.............................................................   5
    Notice of Default....................................................   5
    Officers' Certificate................................................   5
    Opinion of Counsel...................................................   5
    Original Issue Date..................................................   5

                                       i

                                                                          Page
                                                                          ----
                                                                       
    Original Issue Discount Security.....................................   6
    Outstanding..........................................................   6
    Paying Agent.........................................................   7
    Person...............................................................   7
    Place of Payment.....................................................   7
    Predecessor Security.................................................   7
    Preferred Stock......................................................   7
    Proceeding...........................................................   7
    Redemption Date......................................................   7
    Redemption Price.....................................................   7
    Regular Record Date..................................................   7
    Responsible Officer..................................................   7
    Restricted Subsidiary................................................   8
    Securities or Security...............................................   8
    Securities Act.......................................................   8
    Security Register and Security Registrar.............................   8
    Senior Indebtedness..................................................   8
    Special Record Date..................................................   8
    Stated Maturity......................................................   8
    Subsidiary...........................................................   9
    Trust Indenture Act..................................................   9
    Trustee..............................................................   9
    Vice President.......................................................   9
  SECTION 102.       COMPLIANCE CERTIFICATES AND OPINIONS................   9
  SECTION 103.       FORM OF DOCUMENTS DELIVERED TO TRUSTEE..............  10
  SECTION 104.       ACTS OF HOLDERS; RECORD DATES.......................  10
  SECTION 105.       NOTICES, ETC., TO TRUSTEE AND COMPANY...............  13
  SECTION 106.       NOTICE TO HOLDERS; WAIVER...........................  13
  SECTION 107.       CONFLICT WITH TRUST INDENTURE ACT...................  14
  SECTION 108.       EFFECT OF HEADINGS AND TABLE OF CONTENTS............  14
  SECTION 109.       SUCCESSORS AND ASSIGNS..............................  14
  SECTION 110.       SEPARABILITY CLAUSE.................................  14
  SECTION 111.       BENEFITS OF INDENTURE...............................  14
  SECTION 112.       GOVERNING LAW; WAIVER OF JURY TRIAL.................  14
  SECTION 113.       LEGAL HOLIDAYS......................................  15
  SECTION 114.       COMPUTATIONS........................................  15

ARTICLE TWO SECURITY FORMS...............................................  15

  SECTION 201.       FORMS GENERALLY.....................................  15
  SECTION 202.       FORM OF LEGEND FOR GLOBAL SECURITIES................  16
  SECTION 203.       FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.....  16

                                       ii

                                                                          Page
                                                                          ----
                                                                       
ARTICLE THREE THE SECURITIES.............................................  17

  SECTION 301.       TITLE; TERMS........................................  17
  SECTION 302.       DENOMINATIONS.......................................  19
  SECTION 303.       EXECUTION, AUTHENTICATION, DELIVERY AND DATING......  20
  SECTION 304.       TEMPORARY SECURITIES................................  21
  SECTION 305.       REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.  21
  SECTION 306.       MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES....  24
  SECTION 307.       PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED......  25
  SECTION 308.       PERSONS DEEMED OWNERS...............................  26
  SECTION 309.       CANCELLATION........................................  26
  SECTION 310.       COMPUTATION OF INTEREST.............................  27
  SECTION 311.       CUSIP NUMBERS.......................................  27

ARTICLE FOUR SATISFACTION AND DISCHARGE..................................  27

  SECTION 401.       SATISFACTION AND DISCHARGE OF INDENTURE.............  27
  SECTION 402.       APPLICATION OF TRUST MONEY..........................  29

ARTICLE FIVE REMEDIES....................................................  29

  SECTION 501.       EVENTS OF DEFAULT...................................  29
  SECTION 502.       ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT..  30
  SECTION 503.       COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
                     BY TRUSTEE..........................................  31
  SECTION 504.       TRUSTEE MAY FILE PROOFS OF CLAIM....................  32
  SECTION 505.       TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
                     SECURITIES..........................................  33
  SECTION 506.       APPLICATION OF MONEY COLLECTED......................  33
  SECTION 507.       LIMITATION ON SUITS.................................  33
  SECTION 508.       UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
                     PREMIUM AND INTEREST................................  34
  SECTION 509.       RESTORATION OF RIGHTS AND REMEDIES..................  34
  SECTION 510.       RIGHTS AND REMEDIES CUMULATIVE......................  35
  SECTION 511.       DELAY OR OMISSION NOT WAIVER........................  35
  SECTION 512.       CONTROL BY HOLDERS..................................  35
  SECTION 513.       WAIVER OF PAST DEFAULTS.............................  35
  SECTION 514.       UNDERTAKING FOR COSTS...............................  36
  SECTION 515.       WAIVER OF USURY, STAY OR EXTENSION LAWS.............  36

                                       iii

                                                                          Page
                                                                          ----
                                                                       
ARTICLE SIX THE TRUSTEE..................................................  37

  SECTION 601.       CERTAIN DUTIES AND RESPONSIBILITIES.................  37
  SECTION 602.       NOTICE OF DEFAULTS..................................  38
  SECTION 603.       CERTAIN RIGHTS OF TRUSTEE...........................  38
  SECTION 604.       NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
                     SECURITIES..........................................  40
  SECTION 605.       MAY HOLD SECURITIES.................................  40
  SECTION 606.       MONEY HELD IN TRUST.................................  41
  SECTION 607.       COMPENSATION AND REIMBURSEMENT......................  41
  SECTION 608.       DISQUALIFICATION; CONFLICTING INTERESTS.............  42
  SECTION 609.       CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.............  42
  SECTION 610.       RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR...  42
  SECTION 611.       ACCEPTANCE OF APPOINTMENT BY SUCCESSOR..............  44
  SECTION 612.       MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
                     BUSINESS............................................  45
  SECTION 613.       PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY...  45
  SECTION 614.       APPOINTMENT OF AUTHENTICATING AGENT.................  45

ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..........  47

  SECTION 701.       COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
                     HOLDERS.............................................  47
  SECTION 702.       PRESERVATION OF INFORMATION; COMMUNICATIONS TO
                     HOLDERS.............................................  48
  SECTION 703.       REPORTS BY TRUSTEE..................................  48
  SECTION 704.       REPORTS BY COMPANY..................................  48

ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.......  49

  SECTION 801.       COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS  49
  SECTION 802.       SUCCESSOR CORPORATION SUBSTITUTED...................  50

ARTICLE NINE SUPPLEMENTAL INDENTURES.....................................  51

  SECTION 901.       SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS..  51
  SECTION 902.       SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.....  52
  SECTION 903.       EXECUTION OF SUPPLEMENTAL INDENTURES................  53
  SECTION 904.       EFFECT OF SUPPLEMENTAL INDENTURES...................  53

                                       iv

                                                                          Page
                                                                          ----
                                                                       
  SECTION 905.       CONFORMITY WITH TRUST INDENTURE ACT.................  53
  SECTION 906.       REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES..  54

ARTICLE TEN COVENANTS....................................................  54

  SECTION 1001.      PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST..........  54
  SECTION 1002.      MAINTENANCE OF OFFICE OR AGENCY.....................  54
  SECTION 1003.      MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST...  55
  SECTION 1004.      STATEMENT BY OFFICERS AS TO DEFAULT.................  56
  SECTION 1005.      EXISTENCE...........................................  56
  SECTION 1006.      PAYMENT OF TAXES....................................  56
  SECTION 1007.      LIMITATION ON LIENS.................................  57
  SECTION 1008.      WAIVER OF CERTAIN COVENANTS.........................  57
  SECTION 1009.      CALCULATION OF ORIGINAL ISSUE DISCOUNT..............  57

ARTICLE ELEVEN REDEMPTION OF SECURITIES..................................  58

  SECTION 1101.      COMPANY'S RIGHT OF REDEMPTION.......................  58
  SECTION 1102.      APPLICABILITY OF ARTICLE............................  58
  SECTION 1103.      ELECTION TO REDEEM; NOTICE TO TRUSTEE...............  58
  SECTION 1104.      SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED...  59
  SECTION 1105.      NOTICE OF REDEMPTION................................  59
  SECTION 1106.      DEPOSIT OF REDEMPTION PRICE.........................  60
  SECTION 1107.      SECURITIES PAYABLE ON REDEMPTION DATE...............  60
  SECTION 1108.      SECURITIES REDEEMED IN PART.........................  61

ARTICLE TWELVE SUBORDINATION OF SECURITIES...............................  61

  SECTION 1201.      SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.......  61
  SECTION 1202.      PAYMENT OVER PROCEEDS UPON DISSOLUTION, ETC.........  62
  SECTION 1203.      PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON
                     ACCELERATION OF SECURITIES..........................  63
  SECTION 1204.      NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT......  63
  SECTION 1205.      PAYMENT PERMITTED IF NO DEFAULT.....................  64
  SECTION 1206.      SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR
                     INDEBTEDNESS........................................  64
  SECTION 1207.      PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.........  65
  SECTION 1208.      TRUSTEE TO EFFECTUATE SUBORDINATION.................  65

                                        v

                                                                          Page
                                                                          ----
                                                                       
  SECTION 1209.      NO WAIVER OF SUBORDINATION PROVISIONS...............  66
  SECTION 1210.      NOTICE TO TRUSTEE...................................  66
  SECTION 1211.      RELIANCE ON JUDICIAL ORDER OF CERTIFICATE OF
                     LIQUIDATING AGENT...................................  67
  SECTION 1212.      TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
                     INDEBTEDNESS........................................  67
  SECTION 1213.      RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
                     PRESERVATION OF TRUSTEE'S RIGHTS....................  67
  SECTION 1214.      ARTICLE APPLICABLE TO PAYING AGENTS.................  67
  SECTION 1215.      CERTAIN CONVERSIONS OR EXCHANGES DEEMED PAYMENT.....  68

ARTICLE THIRTEEN DEFEASANCE AND COVENANT DEFEASANCE......................  68

  SECTION 1301.      COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
                     DEFEASANCE..........................................  68
  SECTION 1302.      DEFEASANCE AND DISCHARGE............................  68
  SECTION 1303.      COVENANT DEFEASANCE.................................  69
  SECTION 1304.      CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.....  69
  SECTION 1305.      DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE
                     HELD IN TRUST; MISCELLANEOUS PROVISIONS.............  71
  SECTION 1306.      REINSTATEMENT.......................................  71
  SECTION 1307.      QUALIFYING TRUSTEE..................................  72

                                       vi

                   CERTAIN SECTIONS OF THIS INDENTURE RELATING
                          TO SECTIONS 310 THROUGH 318,
                  INCLUSIVE OF THE TRUST INDENTURE ACT OF 1939:

TRUST INDENTURE ACT SECTION                                    INDENTURE SECTION
SECTION 310(a)(1).......................................................609, 610
(a)(2).......................................................................609
(a)(3)............................................................NOT APPLICABLE
(a)(4)............................................................NOT APPLICABLE
(a)(5) ......................................................................609
(b).....................................................................608, 610
SECTION 311(a)...............................................................613
(b)..........................................................................613
SECTION 312(a)..........................................................701, 702
(b)..........................................................................702
(c)..........................................................................702
SECTION 313(a)...............................................................703
(b)..........................................................................703
(c)..........................................................................703
(d)..........................................................................703
SECTION 314(a)...............................................................704
(a)(4).................................................................101, 1004
(b)...............................................................NOT APPLICABLE
(c)(1).......................................................................102
(c)(2).......................................................................102
(c)(3)............................................................NOT APPLICABLE
(d)...............................................................NOT APPLICABLE
(e)..........................................................................102
SECTION 315(a)...............................................................601
(b)..........................................................................602
(c)..........................................................................601
(d)..........................................................................601
(e)..........................................................................514
SECTION 316(a)...............................................................101
(a)(1)(a)...............................................................502, 512
(a)(1)(b)....................................................................513
(a)(2)............................................................NOT APPLICABLE
(b)..........................................................................508
(c)..........................................................................104
SECTION 317(a)(1)............................................................503
(a)(2).......................................................................504
(b).........................................................................1003
SECTION 318(a)...............................................................107

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.

                                      vii

      SUBORDINATED INDENTURE, dated as of --, 200--, between Principal
Financial Group, Inc., a corporation duly organized and existing under the laws
of the State of Delaware (herein called the "Company"), having its principal
office at 711 High Street, Des Moines, Iowa 50392, and The Bank of New York, a
New York banking corporation, as Trustee (herein called the "Trustee").

                             RECITALS OF THE COMPANY

      The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debt securities in one or more series (the "Securities") of
substantially the tenor hereinafter provided, and to provide the terms and
conditions upon which the Securities are to be authenticated, issued and
delivered; and all things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with its terms, have been done.

      NOW, THEREFORE, THIS INDENTURE WITNESSETH:

      For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of a series thereof,
as follows:

                                   ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

Section 101. Definitions.

      For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:

      (1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;

      (2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;

      (3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted at the
time of such computation;

provided, that when two or more principles are so generally accepted, it shall
mean that set of principles consistent with those in use by the Company;

      (4) unless the context otherwise requires, any reference to an "Article"
or a "Section" refers to an Article or a Section, as the case may be, of this
Indenture; and

      (5) the words "herein", "hereinafter", "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.

      "Act" when used with respect to any Holder, has the meaning specified in
Section 104.

      "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any 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.

      "Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities.

      "Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.

      "Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors or such committee of the Board of Directors to which authority to
act on behalf of the Board of Directors has been delegated, and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.

      "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which the Corporate Trust Office, banking institutions in
New York, New York, Chicago, Illinois or Des Moines, Iowa, or any Place of
Payment are authorized or obligated by law or executive order to close.

      "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, 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.

      "Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the

                                       2

applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.

      "Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by (i) its Chairman,
President, Chief Executive Officer or any Vice President and (ii) its Treasurer,
any Associate Treasurer, any Assistant Treasurer, its Controller, its Secretary
or any Assistant Secretary, and delivered to the Trustee.

      "Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date hereof is located at 2 North LaSalle Street, Suite
1020, Chicago, Illinois 60602, Attention: Corporate Trust Department, or such
other address as the Trustee may designate from time to time by notice to the
Holders and the Company, or the principal corporate trust office of any
successor Trustee (or such other address as such successor Trustee may designate
from time to time by notice to the Holders and the Company).

      "corporation" means a corporation, association, company, joint-stock
company or business trust.

      "Covenant Defeasance" has the meaning specified in Section 1303.

      "Defaulted Interest" has the meaning specified in Section 307.

      "Defeasance" has the meaning specified in Section 1302.

      "Depositary" means the clearing agency registered under the Exchange Act
that is designated by the Company in Section 301 to act as depositary for any
series of Securities with respect to such series (or any successor to such
clearing agency).

      "Dollar" means the currency of the United States of America as at the time
of payment is legal tender for the payment of public and private debts.

      "Event of Default," unless otherwise specified with respect to Securities
of a series pursuant to Section 301, has the meaning specified in Section 501.

      "Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.

      "Expiration Date" has the meaning specified in Section 104.

      "Foreign Currency" means any currency issued by the government of one or
more countries other than the United States of America or by any recognized
confederation or association of such governments.

                                       3

      "Global Security" means a Security that evidences all or part of a series
of Securities issued to the Depositary or its nominee for such series, and
registered in the name of such Depositary or its nominee and bearing the legend
set forth in Section 202.

      "Governmental Authority" means any Federal, state, local or foreign court
or governmental agency, authority, instrumentality or regulatory body.

      "Government Obligations" means, with respect to the Securities of any
series, securities which are (i) direct obligations of the United States of
America or (ii) obligations 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 by the United States of America and which,
in either case, are full faith and credit obligations of the United States of
America and are not callable or redeemable at the option of the issuer thereof
and shall also include a depository receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any such
Government Obligation held by such custodian for the account of the holder of
such depository receipt; 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 depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of the Government Obligation evidenced by such depository receipt.

      "Guarantee", when used with respect to the Securities of or within any
series, means a guarantee by the Guarantor of the obligations of the Company
under such Securities, which guarantee may be included in an indenture or
indentures supplemental hereto or in a separate agreement.

      "Guarantor" means Principal Financial Services, Inc., an Iowa business
corporation, and its successors and assigns.

      "Holder" means a Person in whose name a Security is registered in the
Security Register.

      "Indebtedness" of any person means the principal of and premium, if any,
and interest due on indebtedness of such Person, whether outstanding on the date
of this Indenture or thereafter created, incurred or assumed, whether recourse
is to all or a portion of the assets of such Person and whether or not
contingent which is (a) indebtedness for money borrowed, and (b) any amendments,
renewals, extensions, modifications and refundings of any such indebtedness. For
the purposes of this definition, "indebtedness for money borrowed" means (i) any
obligation of, or any obligation guaranteed by, such Person for the repayment of
borrowed money, whether or not evidenced by bonds, debentures, notes or other
written instruments, (ii) any obligation of, or any such obligation guaranteed
by, such Person evidenced by bonds, debentures, notes or similar written
instruments, including obligations assumed or incurred in connection with the
acquisition of property, assets or businesses (provided, however, that the
deferred purchase price of any property, assets or business shall not be
considered Indebtedness if the purchase price thereof is payable in full within
90 days from the date on which such indebtedness was created), and (iii) any
obligations of such Person as lessee under leases required to be capitalized on
the balance sheet of the lessee under generally accepted accounting principles
and leases of property or assets made as part of any sale and lease-back
transaction to which such Person is a party. Indebtedness

                                       4

does not include trade accounts payable or accrued liability arising in the
ordinary course of business.

      "Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the terms of each particular series of Securities established as
contemplated by Section 301, including, for all purposes of this instrument 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.

      "Interest Payment Date" means as to each series of Securities the Stated
Maturity of an installment of interest on such Securities.

      "Interest Rate" means the rate of interest specified or determined as
specified in each Security as being the rate of interest payable on such
Security.

      "Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.

      "Junior Subordinated Payment" has the meaning specified in Section 1202.

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

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

      "Notice of Default" means a written notice of the kind specified in
Section 501(3).

      "Officers' Certificate" means a certificate signed by (i) the Chairman,
President, Chief Executive Officer or any Vice President, and (ii) the
Treasurer, any Associate Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Assistant Secretary, of the Company, and delivered to the
Trustee. One of the officers signing an Officers' Certificate given pursuant to
Section 1004 shall be the principal executive, financial or accounting officer
of the Company.

      "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for (and an employee of) the Company, and who shall be reasonably
acceptable to the Trustee.

      "Original Issue Date" means the date of issuance specified as such in each
Security.

                                       5

      "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 502.

      "Outstanding" when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:

      (1) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;

      (2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders of
such Securities; provided that, if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and

      (3) Securities which have been paid pursuant to Section 306 or 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 Holders in whose hands such Securities are valid,
binding and legal obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, and (C) Securities beneficially owned by the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in
conclusively relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Securities which a Responsible
Officer knows to be so owned shall 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.

                                       6

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

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

      "Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of and any premium and interest on the
Securities of such series are payable as specified as contemplated by Section
301.

      "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

      "Preferred Stock" shall mean any capital stock entitled by its terms to a
preference (a) as to dividends or (b) upon a distribution of assets.

      "Proceeding" has the meaning specified in Section 1202.

      "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" when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.

      "Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of a series means, unless otherwise provided pursuant to
Section 301 with respect to Securities of a series, the date which is fifteen
days next preceding such Interest Payment Date (whether or not a Business Day).

      "Responsible Officer" shall mean any officer within the corporate trust
department of the Trustee, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other
officer of the Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.

      "Restricted Subsidiary" means Principal Life Insurance Company and any
other Subsidiary which is incorporated in any State of the United States or in
the District of

                                       7

Columbia and which is a regulated insurance company principally engaged in one
or more of the life, annuity, property and casualty insurance businesses,
provided that no such Subsidiary, other than Principal Life Insurance Company,
shall be a Restricted Subsidiary if (i) the total assets of such Subsidiary are
less than 10% of the total assets of the Company and its consolidated
Subsidiaries (including such Subsidiary), in each case as set forth on the most
recent fiscal year-end balance sheets of such Subsidiary and the Company and its
consolidated Subsidiaries, respectively, and computed in accordance with
generally accepted accounting principles, or (ii) in the judgment of the Board
of Directors, as evidenced by a Board Resolution, such Subsidiary is not
material to the financial condition of the Company and its consolidated
Subsidiaries taken as a whole.

      "Securities" or "Security" means any debt securities or debt security, as
the case may be, authenticated and delivered under this Indenture.

      "Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.

      "Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.

      "Senior Indebtedness" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Indebtedness, whether incurred on or prior to the date of this Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Securities or to other
Indebtedness which is pari passu with, or subordinated to, the Securities;
provided, however, that Senior Indebtedness shall not be deemed to include (a)
any Indebtedness of the Company which when incurred and without respect to any
election under Section 1111(b) of the Bankruptcy Reform Act of 1978, was without
recourse to the Company, (b) any Indebtedness of the Company to any of its
Subsidiaries, (c) Indebtedness to any employee of the Company or any employee of
a Subsidiary of the Company, (d) any liability for taxes, (e) Indebtedness or
other monetary obligations to trade creditors created or assumed by the Company
or any of its Subsidiaries in the ordinary course of business in connection with
the obtaining of goods, materials or services and (f) the Securities.

      "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.

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

                                       8

such date may be extended or shortened as provided pursuant to the terms of such
Security.

      "Subsidiary" means a corporation, partnership or other entity of which, at
the time of determination, more than 50% of the outstanding voting stock or
equivalent interest is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.

      "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; 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" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall 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 shall mean the Trustee with respect to the Securities
of that series.

      "Vice President" when used with respect to the Company or the Trustee,
means any officer with a title of "Vice President", "Senior Vice President" or
"Executive Vice President".

Section 102. Compliance Certificates and Opinions.

      Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture. In the case of an application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.

      Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than the certificates provided
pursuant to Section 1004) shall include:

                                       9

      (1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;

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

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

      (4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.

SECTION 103. 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.

      Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers, or other management employee of the
Company or any Subsidiary stating that the information with respect to such
factual matters is in the possession of the Company or such Subsidiary, unless
such counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.

      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 104. 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, made 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 an agent duly
appointed in writing;

                                       10

and, except as herein otherwise expressly provided, such action shall 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 shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive and may be relied upon by the Trustee,
the Company, and any agent of the Trustee or the Company, if made in the manner
provided in this Section.

      (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 any 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 Person acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.

      (c) The fact and date of the execution by any Person 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 and in
accordance with such reasonable rules as the Trustee may determine.

      (d) The ownership of Securities shall be proved by the Security Register.

      (e) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the registration
of transfer thereof or in exchange therefor 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.

      (f) The Company may, but shall not be obligated to, set any day as a
record date for the purpose of determining the Holders of Outstanding Securities
entitled to give, make or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided or permitted by this Indenture
to be given, made or taken by Holders of Securities, provided that the Company
may not set a record date for, and the provisions of this paragraph shall not
apply with respect to, the giving or making of any notice, declaration, request
or direction referred to in the next paragraph. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Securities on such record
date, and no other Holders, shall be entitled to take the relevant action,
whether or not such Holders remain Holders after such record date; provided that
no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date (as defined below) by Holders of the requisite
principal amount of Outstanding Securities on such record date. Nothing in this
paragraph shall be construed to prevent the Company

                                       11

from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Trustee in writing and to each
Holder of Securities in the manner set forth in Section 106.

      The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in Section 502, (iii) any request to institute proceedings referred
to in Section 507(2) or (iv) any direction referred to in Section 512. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Trustee, at the Company's
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Company in writing and to
each Holder of Securities in the manner set forth in Section 106.

      With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities in the manner set forth in Section 106, on or prior
to the existing Expiration Date. If an Expiration Date is not designated with
respect to any record date set pursuant to this Section, the party hereto which
set such record date shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.

                                       12

      Without limiting the foregoing, a Holder entitled hereunder to 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 part of such principal amount.

SECTION 105. Notices, Etc., to Trustee and Company.

      Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:

      (1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed to or with the
Trustee in writing at its Corporate Trust Office or

      (2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class, postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company, Attention: [General Counsel].

      Neither the Company nor the Trustee shall be deemed to have received any
such request, demand, authorization, direction, notice, consent, waiver or Act
of Holders unless given, furnished or filed as provided in this Section 105.

SECTION 106. Notice to Holders; Waiver.

      Where this Indenture provides for notice to Holders of any event, such
notice shall 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 the address of such Holder 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 shall
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 shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall 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 shall be impracticable to give such notice by mail, then
such notification as

                                       13

shall be made with the written approval of the Trustee shall constitute a
sufficient notification for every purpose hereunder.

SECTION 107. Conflict with Trust Indenture Act.

      If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act which is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

SECTION 108. Effect of Headings and Table of Contents.

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

SECTION 109. Successors and Assigns.

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

SECTION 110. Separability Clause.

      In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 111. Benefits of Indenture.

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

SECTION 112. Governing Law; Waiver of Jury Trial.

      This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York, without regard to conflicts
of laws principles thereof.

      EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE, THE
SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.

                                       14

SECTION 113. Legal Holidays.

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

SECTION 114. Computations.

      Unless otherwise specifically provided, the certificate or opinion of any
independent firm of public accountants of recognized standing selected by the
Board of Directors shall be conclusive evidence of the correctness of any
computation made under the provisions of this Indenture. The Company shall
furnish to the Trustee upon its request a copy of any such certificate or
opinion.

                                   ARTICLE TWO

                                 SECURITY FORMS

SECTION 201. Forms Generally.

      The Securities of each series shall be substantially in the form attached
as Exhibit A, or in such other form or forms as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate provisions as are required or permitted by
this Indenture, 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 applicable tax laws or the rules of any securities
exchange or Depositary therefor or as may, consistently herewith, be determined
by the officers executing such Securities, as evidenced by their execution
thereof. 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
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 with respect to the authentication and delivery of
such Securities.

      The Trustee's certificate of authentication shall be substantially in the
form set forth in this Article.

                                       15

      The definitive Securities shall be printed, typewritten or 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.

      The Securities of each series will initially be issued in the form of one
or more Global Securities. Each such Global Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and each
shall provide that it shall represent the aggregate amount of Outstanding
Securities of such series from time to time endorsed thereon and that the
aggregate amounts of Outstanding Securities of such series represented thereby
may from time to time be reduced or increased, as appropriate. The Global
Security or Securities evidencing the Securities of a series (and all Securities
issued in exchange therefore) shall bear the legend indicated in Section 202.

SECTION 202. Form of Legend for Global Securities.

      Every Global Security authenticated and delivered hereunder shall, in
addition to the provisions contained in Exhibit A, bear a legend in
substantially the following form:

      UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS 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 INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

      THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE
THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY
REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN DTC OR SUCH NOMINEE, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

SECTION 203. Form of Trustee's Certificate of Authentication.

      The Trustee's certificates of authentication shall be in substantially the
following form:

                                       16

                          Certificate of Authentication

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

Dated:
                                              -----------------------
                                              as Trustee

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

                                  ARTICLE THREE

                                 THE SECURITIES

SECTION 301. Title; Terms.

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

      The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of a series:

      (a) the title of the securities of such series, which shall distinguish
the Securities of the series from all other Securities;

      (b) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
or transfer of, or in exchange for, or in lieu of, other Securities of the same
series pursuant to Section 304, 305, 306, 906 or 1108 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder); provided, however, that the authorized
aggregate principal amount of such series may be increased above such amount by
a Board Resolution to such effect;

      (c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof;

      (d) the rate or rates, if any, at which the Securities of such series
shall bear interest or the method of determining such rate or rates, the
Interest Payment Dates on which such interest shall be payable, the right, if
any, of the Company to defer or extend an Interest Payment Date, the Regular
Record Date (if other than as defined in this

                                       17

Indenture) for the interest payable on any Interest Payment Date and the dates
from which interest shall accrue and the method of determining these dates;

      (e) the place or places where the principal of (and premium, if any) and
interest on the Securities of such series shall be payable, the place or places
where the Securities of such series may be presented for registration of
transfer or exchange, and the place or places where notices and demands to or
upon the Company in respect of the Securities of such series may be made;

      (f) the period or periods within or the date or dates on which, if any,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed or prepaid, in whole or in part, at
the option of the Company;

      (g) the obligation or the right, if any, of the Company to redeem, repay
or purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions or at the option of a Holder thereof and
the period or periods within which, the price or prices at which, the currency
or currencies (including currency unit or units) in which and the other terms
and conditions upon which Securities of the series shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;

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

      (i) if other than Dollars, the currency or currencies (including currency
unit or units) in which the principal of (and premium, if any) and interest, if
any, on the Securities of the series shall be payable, or in which the
Securities of the series shall be denominated;

      (j) the additions, modifications or deletions, if any, in the Events of
Default or covenants of the Company set forth herein with respect to the
Securities of such series;

      (k) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;

      (l) the additions or changes, if any, to this Indenture with respect to
the Securities of such series as shall be necessary to permit or facilitate the
issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;

      (m) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;

                                       18

      (n) the issuance of a temporary Global Security representing all of the
Securities of such series and the terms upon which such temporary Global
Security may be exchanged for definitive Securities of such series;

      (o) whether the Securities of the series shall be issued in whole or in
part in the form of one or more Global Securities and, in such case, the
identity of the Depositary for such Global Securities;

      (p) the appointment of any Paying Agent or Agents for the Securities of
such series;

      (q) the terms and conditions of any right or obligation on the part of the
Company, or any option on the part of the Holders, to convert or exchange
Securities of such series into cash or any other securities or property of the
Company or any other Person, and the additions or changes, if any, to this
Indenture with respect to the Securities of such series to permit or facilitate
such conversion or exchange;

      (r) the relative degree, if any, to which the Securities of the series
shall be senior to or be subordinated to other series of Securities in right of
payment, whether such other series of Securities are Outstanding or not;

      (s) whether and under what circumstances any or all of the provisions of
this Indenture relating to the subordination of the Securities (including the
provisions of Article Twelve), or different subordination provisions, including
a different definition of "Senior Indebtedness" will apply or cease to apply to
Securities of the series;

      (t) whether the Guarantor will guarantee the obligations of the Company
under the Securities of such series and if so, the specific form of such
Guarantee or Guarantees, any related modifications, amendments, supplements or
deletions of any of the terms of this Indenture, and a statement that the
Guarantor shall be an "obligor" as such term is defined in and solely for
purposes of the Trust Indenture Act and shall be required to comply with those
provisions of this Indenture compliance with which is required by an "obligor"
under the Trust Indenture Act; and

      (u) any other terms of the Securities of such series or any related
Guarantee (which terms shall not be inconsistent with the provisions of the
Trust Indenture Act, but may modify, amend, supplement or delete any of the
terms of this Indenture with respect to such series), including any terms which
may be required by or advisable under United States laws or regulations or
advisable (as determined by the Company) in connection with the marketing of
Securities of the series;

provided, that if the Guarantor will guarantee the obligations of the Company
under the Securities of a series, such matters shall be established in one or
more indenture supplements hereto to which the Company, the Guarantor and the
Trustee shall be a party.

      All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided herein or in or
pursuant to such Board Resolution and set forth in such Officers' Certificate or
in any such indenture supplemental hereto.

      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 shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.

SECTION 302. Denominations.

      The Securities of each series shall be in registered form without coupons
and shall be issuable in denominations of $1,000 and any integral multiples
thereof, unless otherwise specified as contemplated by Section 301.

                                       19

SECTION 303. Execution, Authentication, Delivery and Dating.

      The Securities shall be executed on behalf of the Company by its Chairman,
President, Chief Executive Officer or any Vice President. The signature of any
of these officers on the Securities may be manual or facsimile.

      Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall 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.

      At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities 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 shall authenticate and deliver such Securities.

      Notwithstanding the provisions of the preceding paragraph, if all
Securities of a series are not to be originally issued at one time, it shall not
be necessary to deliver the Company Order otherwise required pursuant to such
preceding paragraph at or prior to the authentication of each Security of such
series if such Company Order is delivered at or prior to the authentication upon
original issuance of the first Security of such series to be issued.

      Each Security shall be dated the date of its authentication.

      No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has 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 309, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.

      Minor typographical and other minor errors in the text of any Security
shall not affect the validity and enforceability of such Security if it has been
duly authenticated and delivered by the Trustee.

      The Company shall execute and the Trustee shall authenticate and deliver
one or more Global Securities with respect to each series of Securities that (i)
shall represent an

                                       20

aggregate amount equal to the aggregate principal amount of the initially issued
Securities of such series, (ii) shall be registered in the name of the
Depositary or the nominee of the Depositary, (iii) shall be delivered by the
Trustee to the Depositary or pursuant to the Depositary's instruction and (iv)
shall bear a legend substantially in the form required in Section 202.

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

      The Depositary must, at all times while it serves as such Depositary, be a
clearing agency registered under the Exchange Act, and any other applicable
statute or regulation. Neither the Trustee nor any agent shall have any
responsibility for any actions taken or not taken by the Depositary.

SECTION 304. Temporary Securities.

      Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, typewritten or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities of any series in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.

      If temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities shall
be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company in a Place of Payment without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations and having
the same Original Issue Date and Stated Maturity and having the same terms as
such temporary Securities. Until so exchanged, the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.

SECTION 305. Registration, Registration of Transfer and Exchange.

      The Company shall cause to be kept at the Corporate Trust Office a
register (the register maintained in such office or in any other office or
agency of the Company in a Place of Payment being herein sometimes referred to
as the "Security Register") in which, subject to such reasonable regulations as
it may prescribe, the Company shall

                                       21

provide for the registration of Securities and of transfers and exchanges of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided.

      Upon surrender for registration of transfer of any Security at the office
or agency of the Company in a Place of Payment, the Company shall execute, and
the Trustee shall authenticate and deliver, 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 tenor and aggregate principal amount, of
the same original Issue Date and Stated Maturity and having the same terms.

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

      At the option of the Holder, Securities may be exchanged for other
Securities, of the same series of any authorized denominations, of like tenor
and aggregate principal amount, of the same Original Issue Date and Stated
Maturity and having the same terms, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.

      If at any time the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary or if at any time the Depositary shall cease to
be a clearing agency registered under the Exchange Act as provided in Section
303, the Company shall appoint a successor Depositary. If a successor Depositary
is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such ineligibility, the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
individual Securities, will authenticate and make available for delivery,
individual Securities in an aggregate principal amount equal to the principal
amount of the Global Security or Securities representing the Securities in
exchange for such Global Security or Securities.

      The Company may at any time and in its sole discretion determine that
individual Securities issued in the form of one or more Global Securities shall
no longer be represented by such Global Security or Securities. In such event
the Company will execute, and the Trustee, upon receipt of a Company Order for
the authentication and delivery of individual Securities, will authenticate and
make available for delivery, individual Securities in an aggregate principal
amount equal to the principal amount of

                                       22

the Global Security or Securities representing the Securities in exchange for
such Global Security or Securities.

      The Depositary may surrender a Global Security in exchange in whole or in
part for individual Securities on such terms as are acceptable to the Company,
the Trustee and such Depositary. Thereupon, the Company shall execute, and the
Trustee shall authenticate and make available for delivery, without service
charge:

      (1) to each Person specified by such Depositary a new individual Security
or Securities of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's beneficial
interest in the Global Security; and

      (2) to such Depositary a new Global Security in a denomination equal to
the difference, if any, between the principal amount of the surrendered Global
Security and the aggregate principal amount of individual Securities delivered
to Holders thereof.

      Upon the exchange of a Global Security for individual Securities in an
aggregate principal amount equal to the principal amount of such Global
Security, such Global Security shall be canceled by the Trustee. Individual
Securities issued in exchange for a Global Security pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depositary for such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall make available for delivery such individual Securities to the Persons in
whose names such Securities are so registered.

      All Securities issued upon any registration of transfer or exchange of
Securities shall be the 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.

      Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.

      No service charge shall be made to a Holder for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax, assessment 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 304, 906 or 1108 not
involving any transfer.

      Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section: (i) to issue, register the transfer of or exchange
any Security of any series

                                       23

during a period beginning at the opening of business 15 Business Days before the
day of the mailing of a notice of redemption of any such Securities selected for
redemption of Securities pursuant to Article Eleven and ending at the close of
business on the day of such mailing of notice of redemption; or (ii) to register
the transfer of or exchange any Security so selected for redemption in whole or
in part, except, in the case of any Security to be redeemed in part, any portion
thereof that is not redeemed.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

      If any mutilated Security is surrendered to the Trustee together with such
security or indemnity as may be required by the Company or the Trustee to save
each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same issue
and series, of like tenor and principal amount, having the same Original Issue
Date and Stated Maturity and bearing the same Interest Rate as such mutilated
Security, and bearing a number not contemporaneously outstanding.

      If there shall be delivered to the Company and to 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 issuing Company shall execute and upon its request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same issue and series of like tenor and
principal amount, having the same Original Issue Date and Stated Maturity and
bearing the same Interest Rate as such destroyed, lost or stolen Security, and
bearing a number not contemporaneously outstanding.

      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.

      Upon the issuance of any new Security under this Section, 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.

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

                                       24

      The provisions of this Section are exclusive and shall 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 307. Payment of Interest; Interest Rights Preserved.

      Interest on any Security of any series which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall 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
in respect of Securities of such series. The initial payment of interest on any
Security of any series which is issued between a Regular Record Date and the
related Interest Payment Date shall be payable as provided in such Security or
in the Board Resolution pursuant to Section 301 with respect to the related
series of Securities.

      Any interest on any Security which is payable, but is not timely paid or
duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest"), shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:

      (1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first class, postage prepaid, to each Holder of a
Security of such series at the address of such Holder as it appears in the
Security Register not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Securities of such

                                       25

series (or their respective Predecessor Securities) are registered at the close
of business on such Special Record Date and shall no longer be payable pursuant
to the following Clause (2).

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

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

SECTION 308. Persons Deemed Owners.

      The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

      None of the Company, the Trustee nor any agent of the Company or the
Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a
Global Security or maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

SECTION 309. Cancellation.

      All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall be promptly cancelled 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 shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled

                                       26

Securities held by the Trustee shall be disposed by the Trustee in accordance
with its customary procedures. Acquisition by the Company of any Security shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Security unless and until the same is delivered to the Trustee for
cancellation.

SECTION 310. Computation of Interest.

      Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.

SECTION 311. CUSIP Numbers.

      The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to 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 shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee in writing of any change in the "CUSIP" numbers.

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.

      This Indenture shall upon 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 of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:

      (1) either

            (A) all Securities theretofore authenticated and delivered (other
      than (i) Securities which have been destroyed, lost or stolen and which
      have been replaced or paid as provided in Section 306 and (ii) Securities
      for whose payment 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 1003) have
      been delivered to the Trustee for cancellation; or

                                       27

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

                  (i) have become due and payable, or

                  (ii) will become due and payable at their Stated Maturity
            within one year of the date of deposit, or

                  (iii) 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 (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds: (A) money in an amount;
(B) Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount; or
(C) a combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee of such series (but such
opinion need only be delivered if Government Obligations have been so
deposited), to pay and discharge, and which shall be applied by the Trustee, to
pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and premium, if any)
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;

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

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

      The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 401 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of Outstanding Securities.

      Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and the preceding
paragraph, the obligations of the Company to any Authenticating Agent under
Section 614 and, if money and/or Government Obligations shall have been
deposited with the Trustee

                                       28

pursuant to subclause (B) of Clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.

SECTION 402. Application of Trust Money.

      Subject to the provisions of the last paragraph of Section 1003, all money
and Government Obligations deposited with the Trustee pursuant to Section 401
and all proceeds of such Government Obligations and the interest thereon, shall
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 and Government Obligations
have been deposited with the Trustee.

                                  ARTICLE FIVE

                                    REMEDIES

SECTION 501. Events of Default.

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

      (1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and such default continues for a period
of 30 days; or

      (2) default in the payment of the principal of or premium, if any, on any
Security of that series at its Maturity; or

      (3) 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 of which or the breach of which is specifically dealt with
elsewhere in this Section), and continuance of such default or breach for a
period of 90 days after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in aggregate 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;
or

      (4) the entry of a decree or order by a court having jurisdiction in the
premises adjudging the Company bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the

                                       29

Company under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Company 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 unstayed and in
effect for a period of 90 consecutive days; or

      (5) the institution by the Company of proceedings to be adjudicated
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
of consent seeking reorganization or relief under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator assignee, trustee, sequestrator (or other similar official)
of the Company or of any substantial part of its property, 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 and its
willingness to be adjudicated bankrupt, or the taking of corporate action by the
Company in furtherance of any such action; or

      (6) any other Event of Default specified with respect to Securities of
that series as contemplated in Section 301.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

      If an Event of Default (other than an Event of Default specified in
Section 501(4) or 501(5)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) 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) shall become
immediately due and payable, provided that the payment of principal and interest
on such Securities shall remain subordinated to the extent provided in Article
Thirteen. If an Event of Default specified in Section 501(4) or 501(5) with
respect to Securities of a series at the time Outstanding occurs, the principal
amount of all the Securities of such series (or specified amount) shall
automatically, and without any declaration or other action on the part of the
Trustee or any Holder, become immediately due and payable.

      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 provided, the Holders of not less than a majority in aggregate 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:

                                       30

         (1) 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 borne by
         such Securities,

                  (C) to the extent that payment of such interest is lawful,
         interest upon overdue installments of interest at the rate or rates
         borne by or prescribed therefor in such Securities, and

                  (D) all sums paid or advanced by the Trustee hereunder and the
         compensation, reasonable disbursements, advances and expenses of the
         Trustee, its agents and counsel; and

         (2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal (or a specified portion of the
principal) of and interest on Securities of that series which has become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 513.

         No such rescission shall affect any subsequent default or impair any
right consequent thereon.

SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

         The Company covenants that if:

         (1) 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 days, or

         (2) default is made in the payment of the principal or premium, if any,
on any Security at the Maturity thereof,

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, including any sinking fund payment or analogous
obligations (and premium, if any) and interest, including, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal or premium, if any, and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the compensation, reasonable disbursements, advances and expenses of
the Trustee, its agents and counsel.

                                       31

         If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.

         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.

SECTION 504. Trustee May File Proofs of Claim.

         In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors:

         (a) the Trustee shall be entitled and empowered, by intervention in
such proceeding or otherwise,

                  (i) 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, and

                  (ii) in particular, the Trustee shall be authorized to collect
         and receive any moneys or other property payable or deliverable on any
         such claims and to distribute the same in accordance with Section 506;
         and

         (b) 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 for distribution
in accordance with Section 506, 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 it for the compensation, reasonable disbursements, advances and
expenses of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.

         No provision of this Indenture 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; provided,
however, that the Trustee may, on behalf

                                       32

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.

SECTION 505. Trustee May Enforce Claims Without Possession of Securities.

         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 shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the compensation, reasonable disbursements,
advances and expenses of the Trustee, 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 506. Application of Money Collected.

         Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal or premium,
if any, 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 and any
predecessor Trustee under Section 607;

         SECOND: To the payment of the amounts then due and unpaid upon such
series of Securities for principal (and premium, if any) and interest 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 series of Securities for principal (and premium, if any) and
interest, respectively; and

         THIRD: To the payment of the remainder, if any, to the Company, its
successors or assigns or to whomsoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.

SECTION 507. Limitation on Suits.

         No Holder of any Securities of any series shall 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:

         (1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;

                                       33

         (2) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities of that series have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;

         (3) such Holder or Holders have offered to the Trustee security or
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;

         (4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and

         (5) 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
aggregate principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall 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 (it being understood that the Trustee does not have an affirmative
duty to ascertain whether or not such actions or forbearances are unduly
prejudicial to 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 508. Unconditional Right of Holders to Receive Principal, Premium and
             Interest.

         Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) 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 shall not be impaired without the consent of such Holder.

SECTION 509. 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 shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.

                                       34

SECTION 510. Rights and Remedies Cumulative.

         Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, 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 shall, 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, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

SECTION 511. Delay or Omission Not Waiver.

         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 shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to 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 512. Control by Holders.

         The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series, provided that:

         (1) such direction shall not be in conflict with any rule of law or
with this Indenture, involve the Trustee in personal liability or be unduly
prejudicial to the Holders of the Securities not joining in the action; and

         (2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.

SECTION 513. Waiver of Past Defaults.

         The Holders of not less than a majority in aggregate 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:

         (1) in the payment of the principal of, or premium, if any, or interest
on, any Security of such series; or

                                       35

         (2) in respect of a covenant or provision hereof which under Article
Nine 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 shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

SECTION 514. Undertaking for Costs.

         All parties to this Indenture agree, and each holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, any party litigant in such suit to file an
undertaking to pay the costs of such suit, and that court may in its discretion
assess reasonable costs, including reasonable attorneys' fees, against any such
party litigant in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant, in the manner and to the
extent provided in the Trust Indenture Act; provided, that neither this Section
nor the Trust Indenture Act shall be deemed to authorize any court to require
such an undertaking or to make such an assessment in any suit instituted by the
Company or by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of any series, or any suit instituted by any Holder for
the enforcement of the payment of the principal of (or premium, if any) or
interest on any Security on or after the respective Stated Maturities expressed
in such Security (or in the case of redemption, on the Redemption Date).

SECTION 515. Waiver of Usury, Stay or Extension Laws.

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

                                       36

                                   ARTICLE SIX

                                   THE TRUSTEE

SECTION 601. Certain Duties and Responsibilities.

         (a) Except during the continuance of an Event of Default,

                  (i) the Trustee undertakes to perform such duties and only
         such duties as are specifically set forth in this Indenture, and no
         implied covenants or obligations shall be read into this Indenture
         against the Trustee; and

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

         (b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.

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

                  (i) this Subsection shall not be construed to limit the effect
         of Subsection (a) of this Section;

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

                  (iii) the Trustee shall not be liable with respect to any
         action taken or omitted to be taken by it in good faith in accordance
         with the direction of the Holders of a majority in principal amount of
         the Outstanding Securities of any series, determined as provided in
         Sections 101, 104 and 512, relating to the time, method and place of
         conducting any proceeding for any remedy available to the Trustee, or
         exercising any trust or power conferred upon the Trustee, under this
         Indenture with respect to the Securities of such series; and

                                       37

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

         (d) 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 shall be subject to the provisions of this
Section.

SECTION 602. Notice of Defaults.

         If a default occurs hereunder with respect to the Securities of a
series, the Trustee within 90 days of such default shall give the Holders notice
of such default 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 501(3) with respect to such Securities, no such notice to Holders shall
be given until at least 30 days after the occurrence thereof; and provided,
further, that the Trustee may withhold notice to the Holders, of any default
with respect to Securities of a series (except any default of the character
specified in Section 501(1) and (2)), if and so long as the board of directors,
the executive committee or a trust committee of directors or Responsible
Officers of the Trustee in good faith determine that the withholding of the
notice is in the interest of the Holders of such Securities. For the purpose of
this Section, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default with respect to the
Securities of a series.

SECTION 603. Certain Rights of Trustee.

         Subject to the provisions of Section 601:

         (1) the Trustee may conclusively rely and shall 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;

         (2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;

         (3) 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 Officers' Certificate and may at

                                       38

its discretion secure such further evidence deemed necessary or advisable, but
shall in no case be bound to secure the same;

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

         (5) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, 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 shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;

         (6) 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 shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;

         (7) the Trustee's immunities and protections from liability and its
rights to compensation and indemnification in connection with the performance of
its duties under this Indenture shall extend to the Trustee's officers,
directors, agents and employees and its services as Paying Agent, Security
Registrar or any other role assumed by the Trustee hereunder or to which it has
been appointed with respect to the Securities issued hereunder. Such immunities
and protections and right to indemnification, together with the Trustee's right
to compensation, shall survive the Trustee's resignation or removal and final
payment of the Securities;

         (8) the Trustee is not required to give any bond or surety with respect
to the performance of its duties or the exercise of its powers under this
Indenture;

         (9) the Trustee shall not be deemed to have actual knowledge of any
"default" or Event of Default hereunder except (i) during any period it is
serving as Paying Agent for the Securities of a series, any Event of Default
pursuant to Section 501(1) or (2), or (ii) any default or Event of Default of
which a Responsible Officer shall have received written notification from the
Company or the Holders of at least 25% in aggregate principal amount of the
Securities of the series with respect to which such default or Event of Default
has occurred and is continuing or obtained "actual knowledge." The term "actual
knowledge" as used herein shall mean the actual fact or statement of knowing by
a Responsible Officer without independent investigation with respect thereto.
The term "default" as used in this Section 603 shall mean any event which is, or
after

                                       39

notice or lapse of time or both would become, an Event of Default with respect
to Securities of a series;

         (10) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture (other than the payment of debt
service on the Securities from moneys furnished to it pursuant hereto), whether
at the request or direction of the Holders or any other Person, pursuant to this
Indenture or otherwise, unless it shall have been offered indemnity or security
satisfactory to it against the fees, advances, costs, expenses and liabilities
which might be incurred by it in connection with the exercise of any such rights
or powers;

         (11) in no event shall the Trustee be responsible or liable for
special, indirect, or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action; and

         (12) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.

         Notwithstanding anything else herein contained, (i) the Trustee shall
not be liable for any error of judgment made in good faith by any officer of the
Trustee and (ii) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it believes the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.

SECTION 604. Not Responsible for Recitals or Issuance of Securities.

         The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall 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. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.

SECTION 605. 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
608 and 613, may otherwise

                                       40

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 606. Money Held in Trust.

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

SECTION 607. Compensation and Reimbursement.

         The Company agrees:

         (1) to pay to the Trustee from time to time compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);

         (2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the compensation, reasonable disbursements and expenses of
its agents or attorneys), except any such expense, disbursement or advance as
may be attributable to the negligence or bad faith of it or of its agents or
attorneys;

         (3) to indemnify each of the Trustee or any predecessor Trustee and
their agents for, and to hold them harmless against, any and all loss, damage,
claim, liability or expense, including taxes (other than taxes based upon,
measured by or determined by the income of the Trustee), 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 (whether asserted by the Company, or any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, or in connection with enforcing the provisions of this
Section, except to the extent that such loss, damage, claim, liability or
expense is due to its own negligence or bad faith; and

         (4) without limiting any rights available to the Trustee under
applicable law, that when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(4) or Section
501(5), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.

                                       41

SECTION 608. Disqualification; Conflicting Interests.

         If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by the Trust Indenture Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series.

SECTION 609. Corporate Trustee Required; Eligibility.

         The Trustee shall at all times satisfy the requirements of TIA
Section 310(a). The Trustee shall (i) be a corporation organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, (ii) be authorized under such laws to exercise
corporate trust powers, (iii) have a combined capital and surplus of at least
$50,000,000, and (iv) be subject to supervision or examination by Federal or
State authority. If such corporation files 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, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so filed. If the
Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of,
the Trust Indenture Act and this Indenture. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article Six. Neither the Company nor any Person directly or indirectly
controlling, controlled by or under common control with the Company shall serve
as Trustee for the Securities of any series issued hereunder.

SECTION 610. Resignation and Removal; Appointment of Successor.

         No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.

         The Trustee may resign as Trustee 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 611 shall not have been delivered to the resigning Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may,
at the expense of the Company, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

                                       42

         The Trustee may be removed as Trustee hereunder 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 at any time an instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the Trustee within 30
days after the date a notice of removal is delivered to the Trustee, the Trustee
being removed may, at the expense of the Company, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.

         If at any time:

         (1) the Trustee shall fail to comply with Section 608 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; or

         (2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder; or

         (3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,

then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee, or (B) subject to Section 514, 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 and the appointment of a successor Trustee or Trustees.

         If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series and shall comply with the applicable
requirements of Section 611. 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 shall be 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 shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, 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 611, any
Holder who has been a bona fide Holder of a

                                       43

Security for at least six months may, subject to Section 514, 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.

         The Company shall 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 by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.

SECTION 611. Acceptance of Appointment by Successor.

         (a) In the case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
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 shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall 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 shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor 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 and
each successor Trustee with respect to the Securities of one or more series
shall execute and deliver an indenture supplemental hereto wherein each
successor trustee shall accept such appointment and which (1) shall contain such
provisions as shall 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, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee and upon
the execution and delivery of such

                                       44

supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall 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 shall 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 shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in the paragraph (a) or (b) of this Section, as the case may be.

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

SECTION 612. 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 shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, 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 613. Preferential Collection of Claims Against Company.

         If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

SECTION 614. Appointment of Authenticating Agent.

         The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall 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 306, and

                                       45

Securities so authenticated shall be entitled to the benefits of this Indenture
and shall 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 shall 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, Territory 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 files 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, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so filed.

         If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.

         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
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent, shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.

         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 of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.

                                       46

      No successor Authenticating Agent shall be appointed unless eligible under
the provisions of this Section.

      The Company agrees to pay to each Authenticating Agent from time to time
compensation for its services under this Section as agreed to in writing between
the parties.

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

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

                                    ------------------------------------
                                    as Trustee

                                    By:
                                       ---------------------------------
                                          As Authenticating Agent

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

                                 ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.

      The Company will furnish or cause to be furnished to the Trustee:

      (1) semi-annually, not more than 15 days after each Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date; and

      (2) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished; provided, that no such list need be provided in any case to the
extent it would include names and addresses received by the Trustee in its
capacity as Security Registrar.

                                       47

SECTION 702. Preservation of Information; Communications to Holders.

      The Trustee shall 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 701 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 701 upon receipt of a new list so furnished.

      The rights of 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, shall be as provided by the Trust
Indenture Act.

      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 shall 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 703. Reports by Trustee.

      The Trustee shall 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 pursuant thereto. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
60 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 shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange, if any, upon which
any Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee whenever any Securities are listed on any stock exchange
and any delisting thereof.

SECTION 704. Reports by Company.

      The Company shall:

      (1) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company
is not required to file information, documents or reports pursuant to either of
said Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents

                                       48

and reports which may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;

      (2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and

      (3) transmit by mail, to all Holders, as their names and addresses appear
in the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Company pursuant to Clauses (1) and (2) of this Section as may be
required by rules and regulations prescribed from time to time by the
Commission.

      Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall 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 Officers' Certificates).

                                 ARTICLE EIGHT

           CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801. Company May Consolidate, Etc., Only on Certain Terms.

      (a) Subject to Section 801(c), the Company shall not consolidate with or
merge with or into any other Person or convey, transfer or lease its assets
substantially as an entirety to any Person, and the Company shall not permit any
Person to consolidate with or merge with or into the Company, unless:

      (1) the Company is the surviving corporation in a merger or consolidation;
or

      (2) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its assets substantially as an entirety to
any Person, the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer, or which leases,
the assets of the Company substantially as an entirety shall be a corporation,
partnership, trust or limited liability company, organized and validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, the due and punctual payment of
the principal of and any premium and interest on all the Securities and the

                                       49

performance or observance of every covenant of this Indenture on the part of the
Company to be performed or observed; and

      (3) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing; and

      (4) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such transaction
have been complied with.

      (b) Subject to Section 801(c), any indebtedness which becomes an
obligation of the Company or any Subsidiary as a result of any such transaction
shall be treated as having been incurred by the Company or such Subsidiary at
the time of such transaction.

      (c) The provisions of Section 801(a) and (b) shall not be applicable to:

      (1) the direct or indirect conveyance, transfer or lease of all or any
portion of the stock, assets or liabilities of any of the Company's wholly owned
Subsidiaries to the Company or to other wholly owned Subsidiaries of the
Company; or

      (2) any recapitalization transaction, a change of control of the Company
or a highly leveraged transaction unless such transaction or change of control
is structured to include a merger or consolidation by the Company or the
conveyance, transfer or lease of the Company's assets substantially as an
entirety.

SECTION 802. Successor Corporation Substituted.

      Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of the assets of the
Company substantially as an entirety in accordance with Section 801, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of any lease,
the Company shall be relieved of all obligations and covenants under this
Indenture and the Securities and may be dissolved and liquidated.

      In case of any such consolidation, merger, conveyance, transfer or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.

                                       50

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders.

      Without the consent of 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 or, if applicable, into
agreements supplemental to any Guarantee, in form satisfactory to the Trustee,
for any of the following purposes:

      (1) 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 or, if applicable, to evidence the succession of another Person
to the Guarantor and the assumption by any such successor of the Guarantor's
obligations under any Guarantee (in either case with such changes herein and
therein as may be necessary or advisable to reflect such Person's legal status,
if such Person is not a corporation); or

      (2) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or to surrender any right or power herein conferred upon the
Company; or

      (3) to provide for the issuance under this Indenture of Securities in
bearer form (including securities registrable as to principal only) and to
provide for exchangeability of such Securities for Securities issued hereunder
in fully registered form, and to make all appropriate changes for such purpose;
or

      (4) to establish the form or terms of Securities of any series as
permitted by Sections 201 or 301; or

      (5) to add to the covenants of the Company or the Guarantor for the
benefit of the Holders of all Securities or any series of Securities (and if
such covenants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the benefit
of such series) or to surrender any right or power herein conferred upon the
Company or the Guarantor; or

      (6) to add any additional Events of Default; or

      (7) to secure the Securities; or

      (8) 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 provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee pursuant to the requirements of Section 611(b); or

      (9) to cure any ambiguity, to correct or supplement any provision herein,
in any Securities or in any Guarantee, 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 as the

                                       51

Company and the Trustee may deem necessary and desirable, provided that such
action pursuant to this Clause (9) shall not adversely affect the interests of
the Holders of Securities of any series in any material respect; or

      (10) to comply with the requirements of the Commission in order to effect
or maintain the qualification of this Indenture or any Guarantee under the Trust
Indenture Act or otherwise as necessary to comply with applicable law; or

      (11) to modify the provisions in Article Twelve of this Indenture with
respect to the subordination of Outstanding Securities of any series in a manner
not materially adverse to the Holders thereof; or

      (12) to make any change that does not adversely affect the rights of any
Holder in any material respect.

SECTION 902. Supplemental Indentures With Consent of Holders.

      With the consent of the Holders of not less than 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 and, if applicable,
the Guarantor and the Trustee may enter into an agreement or agreements
supplemental hereto to add to or to change or eliminate any provisions of a
Guarantee; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby:

      (1) change the Stated Maturity of the principal of, or any installment of
interest payable on, any Outstanding Security, or reduce the principal amount of
or the rate of interest thereon or any premium payable upon the redemption
thereof, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon redemption or would be provable in
bankruptcy, or adversely affect any right of repayment of the Holder of any
Security or change the Place of Payment or the coin or currency in which, any
Outstanding Security or the 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); or

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

      (3) modify any of the provisions of this Section, Section 513 or Section
1008, except to increase any such percentage or to provide that certain other
provisions of this

                                       52

Indenture cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, however, that this clause shall
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 and
Section 1008, or the deletion of this proviso, in accordance with the
requirements of Sections 611 and 901(8); or

      (4) modify the provisions of Article Twelve of this Indenture with respect
to the subordination of Outstanding Securities of any series in a manner
materially adverse to the Holders thereof.

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

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

SECTION 903. Execution of Supplemental Indentures.

      In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture, and
that all conditions precedent have been complied with. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties, protections, privileges, indemnities,
liabilities or immunities under this Indenture or otherwise.

SECTION 904. Effect of Supplemental Indentures.

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

SECTION 905. Conformity with Trust Indenture Act.

      Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.

                                       53

SECTION 906. Reference in Securities to Supplemental Indentures.

      Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall 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 Board of Directors, 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 TEN

                                    COVENANTS

SECTION 1001. Payment of Principal, Premium and Interest.

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

      Unless otherwise specified as contemplated by Section 301, the Company
shall pay interest on overdue amounts at the rate set forth in the first
paragraph of the Securities, and it shall pay interest on overdue interest at
the same rate (to the extent that the payment of such interest shall be legally
enforceable), which interest on overdue interest shall accrue from the date such
amounts became overdue.

SECTION 1002. Maintenance of Office or Agency.

      The Company will maintain in the Borough of Manhattan, The City of New
York and each other Place of Payment for any series, an office or agency where
Securities of that series may be presented or surrendered for payment, and an
office or agency where Securities may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company
initially appoints the Trustee, acting through its Corporate Trust Office, as
its agent for said purposes. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of any 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.

                                       54

      The Company may also from time to time designate one or more other offices
or agencies where the Securities 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 shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York and each other 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 1003. Money for Securities Payments to Be Held in Trust.

      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 premium, if any, or interest on any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, premium, if any, and any 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.

      Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of the principal of or interest on any Securities, deposit with
a Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, 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.

      The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will (1) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent, (2) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities) in the making of any payment
of principal (and premium, if any) or interest, and (3) at any time during the
continuance of any such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

      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 the Company or any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.

                                       55

      Any money or U.S. Government Obligation (including the proceeds thereof
and the interest thereon) deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Security and remaining unclaimed for two years after
such principal, premium, if any, or interest has become due and payable shall be
paid to the Company at its option on Company Request (unless otherwise required
by mandatory provision of applicable escheat or abandoned or unclaimed property
law) or (if then held by the Company) shall (unless otherwise required by
mandatory provision of applicable escheat or abandoned or unclaimed property
law) be discharged from such trust; and the Holder of such Security shall
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, shall 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 shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

SECTION 1004. Statement by Officers as to Default.

      The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate covering the preceding fiscal year, stating whether or not, to the
best knowledge of the signers thereof, 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 shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.

SECTION 1005. Existence.

      Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its legal
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.

SECTION 1006. Payment of Taxes.

      The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all taxes, assessments and governmental
charges levied or imposed upon the Company or any Restricted Subsidiary or upon
the income, profits or

                                       56

property of the Company or any Restricted Subsidiary, and lawful claims for
labor, materials and supplies, which, if unpaid, might by law become a Lien upon
the property of the Company or any Restricted Subsidiary; provided, however,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment or governmental charge whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings or where the failure to effect such payment is not adverse in any
material respect to the Holders of the Securities.

SECTION 1007. Limitation on Liens.

      The Company will not, nor will it permit any Restricted Subsidiary,
directly or indirectly, to, create, issue, assume, incur, or guarantee or become
liable with respect to indebtedness for money borrowed if such indebtedness is
secured by a Lien on any present or future common stock of any Restricted
Subsidiary (whether such shares of common stock are now owned or hereafter
acquired) without in any such case making or causing to be made effective a
provision (and the Company covenants that in any such case it shall make or
cause to be made effective such provision) whereby the Securities, will be
secured equally and ratably with, or prior to, such indebtedness or guarantee;
it being understood that in such event the Company may also so secure any other
such indebtedness of the Company or such Restricted Subsidiary entitled thereto,
subject to any applicable priority of payment.

SECTION 1008. Waiver of Certain Covenants.

      The Company may omit in any particular instance to comply with any term,
provision, covenant or condition set forth in any covenant provided pursuant to
Section 901(5) for the benefit of the Holders or in any of Sections 1006 and
1007, with respect to the Securities of any series if before or after the time
for such compliance the Holders of at least 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 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 1009. Calculation of Original Issue Discount.

      The Company shall 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 relevant under the
Internal Revenue Code of 1986, as amended from time to time.

                                       57

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

SECTION 1101. Company's Right of Redemption.

      Unless otherwise specified as contemplated by Section 301 with respect to
the Securities of a particular series, and notwithstanding any additional
redemption rights that may be so specified, the Company may, at its option,
redeem the Securities of any series after their date of issuance in whole or in
part at any time and from time to time, subject to the provisions of this
Section 1101 and the other provisions of this Article Eleven. Unless otherwise
specified as contemplated by Section 301 with respect to the Securities of a
particular series, the redemption price for any Security so redeemed shall be
equal to 100% of the principal amount of such Securities then Outstanding plus
accrued and unpaid interest up to, but excluding, the date fixed for redemption;
provided, however, that installments of accrued and unpaid 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 Regular Record Dates according to their
terms and the provisions of Section 307.

SECTION 1102. Applicability of Article.

      Redemption of Securities, as permitted or required by any form of Security
issued pursuant to this Indenture or the documentation providing therefor, shall
be made in accordance with such form of Security or documentation and this
Article Eleven; provided, however, that if any provision of any such form of
Security or documentation shall conflict with any provision of this Article, the
provision of such form of Security or documentation shall govern. Except as
otherwise set forth in the form of Security for such series or such
documentation, each Security shall be subject to partial redemption only in the
amount of $1,000 or integral multiples of $1,000.

SECTION 1103. Election to Redeem; Notice to Trustee.

      The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election of
the Company of the Securities of a series, the Company shall, at least 45 days
but not more than 60 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date, of the principal amount of Securities to be
redeemed and, if applicable, of the tenor of the Securities to be redeemed. In
the case of any redemption of Securities (a) prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or (b)
pursuant to an election of the Company which is subject to a condition specified
in the terms of such Securities, the Company shall furnish the Trustee with an
Officers' Certificate and an Opinion of Counsel evidencing compliance with such
restriction or condition.

                                       58

SECTION 1104. Selection by Trustee of Securities to Be Redeemed.

      If less than all the Securities are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 45 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities not previously called for redemption, by such
method as the Trustee in its sole discretion shall deem fair and appropriate and
which may provide for the selection for redemption of a portion of the principal
amount of any Security, provided that the unredeemed portion of the principal
amount of any Security shall be in an authorized denomination (which shall not
be less than the minimum authorized denomination) for such Security. If less
than all the Securities and of a specified tenor are to be redeemed (unless such
redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 45 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities and specified tenor not previously
called for redemption in accordance with the preceding sentence.

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

      The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

      For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
If the Company shall so direct, Securities registered in the name of the
Company, any Affiliate or any Subsidiary thereof shall not be included in the
Securities selected for redemption.

SECTION 1105. Notice of Redemption.

      Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at its address appearing in the
Security Register. Unless the Company defaults in payment of the Redemption
Price, on and after the Redemption Date, interest shall cease to accrue on the
Securities.

                                       59

      All notices of redemption shall state:

      (1) the Redemption Date;

      (2) the Redemption Price, or if not then ascertainable, the manner of
calculation thereof;

      (3) if less than all the Outstanding Securities consisting of more than a
single Security are to be redeemed, the identification (and, in the case of
partial redemption of any such Securities, the principal amounts) of the
particular Securities to be redeemed and, if less than all the Outstanding
Securities consisting of a single Security are to be redeemed, the principal
amount of the particular Security to be redeemed;

      (4) 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;

      (5) the place or places where each such Security is to be surrendered for
payment of the Redemption Price; and

      (6) the CUSIP numbers, if any.

      Notice of redemption of Securities to be redeemed at the election of the
Company shall 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 shall be irrevocable.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such notice
In any case, a failure to give such notice by mail or any defect in the notice
to the Holder of any Security designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Security.

SECTION 1106. Deposit of Redemption Price.

      Prior to 10:00 a.m. New York City time on any Redemption 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 1003) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.

SECTION 1107. Securities Payable on Redemption Date.

      Notice of redemption having been given pursuant to Section 1105, the
Securities to be so redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company

                                       60

shall default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear or accrue any interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with any accrued but
unpaid interest to, but excluding, the Redemption Date; provided, however, that
installments of accrued and unpaid 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 Regular Record Dates according to their terms and the provisions of
Section 307.

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

SECTION 1108. Securities Redeemed in Part.

      Any Security which is to be redeemed only in part shall 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 shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities 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 TWELVE

                           SUBORDINATION OF SECURITIES

SECTION 1201. Securities Subordinate to Senior Indebtedness.

      The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the payment of the principal
of (and premium, if any) and interest on each and all of the Securities are
hereby expressly made subordinate in right of payment to the prior payment in
full of all amounts then due and payable in respect of all Senior Indebtedness.
Each Holder, by its acceptance hereof, waives all notice of acceptance of the
subordination provisions contained herein by each holder of Senior Indebtedness,
whether now outstanding or hereafter incurred and waives reliance by each such
holder upon said provisions.

                                       61

SECTION 1202. Payment Over Proceeds Upon Dissolution, Etc.

      Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with the Company's insolvency
or bankruptcy (each such event, if any, herein sometimes referred to as a
"Proceeding"), then the holders of Senior Indebtedness shall be entitled to
receive payment in full of principal of (and premium, if any) and interest, if
any, on such Senior Indebtedness, or provision shall be made for such payment in
cash or cash equivalents or otherwise in a manner satisfactory to the holders of
Senior Indebtedness, before the Holders of the Securities are entitled to
receive or retain any payment or distribution of any kind or character, whether
in cash, property or securities (including any payment or distribution which may
be payable or deliverable by reason of the payment of any other Indebtedness of
the Company (including any series of the Securities) subordinated to the payment
of the Securities, such payment or distribution being hereinafter referred to as
a "Junior Subordinated Payment"), on account of principal of (or premium, if
any) or interest on the Securities or on account of the purchase or other
acquisition of Securities by the Company or any Subsidiary and to that end the
holders of Senior Indebtedness shall be entitled to receive, for application to
the payment thereof, any payment or distribution of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, which may be payable or deliverable in respect of the Securities in any
such Proceeding.

      In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, before all Senior Indebtedness is paid in full or payment thereof is
provided for in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Indebtedness, and if written notice thereof shall, at
least three Business Days prior to the time of such payment or distribution,
have been received by a Responsible Officer or, as the case may be, such Holder,
then and in such event such payment or distribution shall be paid over or
delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment 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.

      For purposes of this Article only, the words "any payment or distribution
of any kind or character, whether in cash, property or securities" shall not be
deemed to include shares of stock of the Company as reorganized or readjusted,
or securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment which securities are subordinated in right of
payment to all then outstanding Senior Indebtedness to substantially the same
extent as the Securities are so subordinated

                                       62

as provided in this Article. The consolidation of the Company with, or the
merger of the Company into, another Person or the liquidation or dissolution of
the Company following the sale of all or substantially all of its properties and
assets as any entirety to another Person or the liquidation or dissolution of
the Company following the sale of all or substantially all of its properties and
assets as an entirety to another Person upon the terms and conditions set forth
in Article Eight shall not be deemed a Proceeding for the purposes of this
Section if the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by sale such properties and assets as an
entirety, as the case may be, shall, as a part of such consolidation, merger, or
sale comply with the conditions set forth in Article Eight.

SECTION 1203. Prior Payment to Senior Indebtedness Upon Acceleration of
Securities.

      In the event that any Securities are declared due and payable before their
Stated Maturity, then and in such event the holders of the Senior Indebtedness
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Indebtedness (including any amounts due upon acceleration), or provision
shall be made for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Indebtedness, before the Holders of
the Securities are entitled to receive any payment or distribution of any kind
or character, whether in cash, properties or securities (including any Junior
Subordinated Payment) by the Company on account of the principal of (or premium,
if any) or interest on the Securities or on account of the purchase or other
acquisition of Securities by the Company or any Subsidiary; provided, however,
that nothing in this Section shall prevent the satisfaction of any sinking fund
payment in accordance with this Indenture or as otherwise specified as
contemplated by Section 301 for the Securities of any series by delivering and
crediting as contemplated by Section 301 for the Securities of any series
Securities which have been acquired (upon redemption or otherwise) prior to such
declaration of acceleration.

      In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if written notice of such fact shall,
at least three Business Days prior to the time of such payment, have been
received by a Responsible Officer or, as the case may be, such Holder, then and
in such event such payment shall be paid over and delivered forthwith to the
Company.

      The provisions of this Section shall not apply to any payment with respect
to which Section 1202 would be applicable.

SECTION 1204. No Payment When Senior Indebtedness in Default.

      In the event and during the continuation of any default in the payment of
principal of (or premium, if any) or interest on any Senior Indebtedness, or in
the event that any event of default with respect to any Senior Indebtedness
shall have occurred and be

                                       63

continuing and shall have resulted in such Senior Indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable, unless and until such event of default shall have been
cured or waived or shall have ceased to exist and such acceleration shall have
been rescinded or annulled, or in the event any judicial proceeding shall be
pending with respect to any such default in payment or such event of default,
then no payment or distribution of any kind or character, whether in cash,
properties or securities (including any Junior Subordinated Payment) shall be
made by the Company on account of principal of (or premium, if any) or interest,
if any, on the Securities or on account of the purchase or other acquisition of
Securities by the Company or any Subsidiary; provided, however, that nothing in
this Section shall prevent the satisfaction of any sinking fund payment in
accordance with this Indenture or as otherwise specified as contemplated by
Section 301 for the Securities of any series by delivering and crediting
pursuant to Section 1202 or as otherwise specified as contemplated by Section
301 for the Securities of any series Securities which have been acquired (upon
redemption or otherwise) prior to such default in payment or event of default.

      In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if written notice thereof shall, at
least three Business Days or prior to the time of such payment, have been
received by the Trustee or, as the case may be, such Holder, then and in such
event such payment shall be paid over and delivered forthwith to the Company.

      The provisions of this Section shall not apply to any payment with respect
to which Section 1202 would be applicable.

SECTION 1205. Payment Permitted If No Default.

      Nothing contained in this Article or elsewhere in this Indenture or in any
of the Securities shall prevent (a) the Company, at any time except during the
pendency of any Proceeding referred to in Section 1202 or under the conditions
described in Sections 1203 and 1204, from making payments at any time of
principal of (and premium, if any) or interest on the Securities, or (b) the
application by the Trustee of any money or Government Obligations deposited with
it hereunder to the payment of or on account of the principal of (and premium,
if any) or interest on the Securities or the retention of such payment by the
Holders, if, at least three Business Days prior to the time of such application
by the Trustee, a Responsible Officer did not have knowledge that such payment
would have been prohibited by the provisions of this Article.

SECTION 1206. Subrogation to Rights of Holders of Senior Indebtedness.

      Subject to the payment in full of all Senior Indebtedness, or the
provision for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Indebtedness, the Holders of the
Securities shall be subrogated to the extent of

                                       64

the payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article (equally and ratably with the holders
of all indebtedness of the Company which by its express terms is subordinated to
Senior Indebtedness of the Company to substantially the same extent as the
Securities are subordinated to the Senior Indebtedness and is entitled to like
rights of subrogation by reason of any payments or distributions made to holders
of such Senior Indebtedness) to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of (and
premium, if any) and interest on the Securities shall be paid in full. For
purposes of such subrogation or assignment, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article, and no payments over pursuant to the provisions of
this Article to the holders of Senior Indebtedness by Holders of the Securities
or the Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness, and the Holders of the Securities, be deemed to be a
payment or distribution by the Company to or on account of the Senior
Indebtedness.

SECTION 1207. Provisions Solely to Define Relative Rights.

      The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as between the Company and the Holders of the Securities,
the obligations of the Company, which are absolute and unconditional, to pay to
the Holders of the Securities the principal of (and premium, if any) and
interest on the Securities as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of the Securities and creditors of the Company other than
their rights in relation to the holders of Senior Indebtedness; or (c) prevent
the Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture including, without
limitation, filing and voting claims in any Proceeding, subject to the rights,
if any, under this Article of the holders of Senior Indebtedness to receive
cash, property and securities otherwise payable or deliverable to the Trustee or
such Holder.

SECTION 1208. Trustee to Effectuate Subordination.

      Each Holder of a Security by his or her acceptance thereof authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination provided in this
Article and appoints the Trustee his or her attorney-in-fact for any and all
such purposes.

                                       65

SECTION 1209. No Waiver of Subordination Provisions.

      No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have or
be otherwise charged with.

SECTION 1210. Notice to Trustee.

      The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with actual knowledge of the existence of any facts which would prohibit
the making of any payment to or by the Trustee in respect of the Securities,
unless and until a Responsible Officer shall have received written notice
thereof from the Company or a holder of Senior Indebtedness or from any trustee,
agent or representative therefor (whether or not the facts contained in such
notice are true); provided, however, that if the Trustee shall not have received
the notice provided for in this Section at least three Business Days prior to
the date upon which by the terms hereof any monies may become payable for any
purpose (including, without limitation, the payment of the principal of (and
premium, if any) or interest on any Security), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority
to receive such monies and to apply the same to the purpose for which they were
received and shall not be affected by any notice to the contrary which may be
received by it within three Business Days prior to such date.

      Subject to the provisions of Section 601, the Trustee shall be entitled to
conclusively rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Indebtedness (or a trustee or
agent on behalf of such holder) to establish that such notice has been given by
a holder of Senior Indebtedness (or a trustee or agent on behalf of any such
holder). In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the benefit
of such person pursuant to the terms of this Indenture pending judicial
determination as to the rights of such person to receive such payment.

                                       66

SECTION 1211. Reliance on Judicial Order of Certificate of Liquidating Agent.

         Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Article Six, and the
Holders of the Securities shall be entitled to conclusively rely upon any order
or decree entered by any court of competent jurisdiction in which such
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 Trustee or to
the Holders of Securities, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the 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.

SECTION 1212. Trustee Not Fiduciary For Holders of Senior Indebtedness.

         The Trustee, in its capacity as trustee under this Indenture, shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and
shall not be liable to any such holders if it shall in good faith mistakenly pay
over or distribute to Holders of Securities or to the Company or to any other
Person cash, property or securities to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article or otherwise.

         With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants or obligations as
are specifically set forth in this Article and no implied covenants or
obligations with respect to holders of Senior Indebtedness shall be read into
this Indenture against the Trustee.

SECTION 1213. Rights of Trustee as Holder of Senior Indebtedness; Preservation
              of Trustee's Rights.

         The Trustee or any Authenticating Agent in its individual capacity
shall be entitled to all the rights set forth in this Article with respect to
any Senior Indebtedness which may at any time be held by it, to the same extent
as any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee or any Authenticating Agent of any of its rights as such
holder.

         Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.

SECTION 1214. Article Applicable to Paying Agents.

         In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents

                                       67

and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee.

SECTION 1215. Certain Conversions or Exchanges Deemed Payment.

         For the purposes of this Article only, (a) the issuance and delivery of
junior securities upon conversion or exchange of Securities shall not be deemed
to constitute a payment or distribution on account of the principal of (or
premium, if any) or interest on securities or on account of the purchase or
other acquisition of Securities, and (b) the payment, issuance or delivery of
cash, property or securities (other than junior securities) upon conversion or
exchange of a Security shall be deemed to constitute payment on account of the
principal of such security. For the purposes of this Section, the term "junior
securities" means (i) shares of any stock of any class of the Company and (ii)
securities of the Company which are subordinated in right of payment to all
Senior Indebtedness which may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article.

                                ARTICLE THIRTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.

         The Company may elect, at its option at any time, to have Section 1302
or Section 1303 applied to any Securities upon compliance with the conditions
set forth below in this Article. Any such election shall be evidenced by a Board
Resolution.

SECTION 1302. Defeasance and Discharge.

         Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities, the Company shall be deemed to have been discharged
from its obligations with respect to such Securities as provided in this Section
on and after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other obligations
under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Company and upon Company
Request, shall execute proper instruments acknowledging the same), subject to
the following, which shall survive until otherwise terminated or discharged
hereunder: (1) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003; (2) the rights, powers, trusts, duties
and immunities of the Trustee hereunder, including but not limited to those
enumerated under Sections 601, 603 and 607; and (3) this Article. Subject to
compliance with this Article, the Company may exercise its option (if any) to
have this Section applied to any

                                       68

Securities notwithstanding the prior exercise of its option (if any) to have
Section 1303 applied to such Securities.

SECTION 1303. Covenant Defeasance.

         Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities (1) the Company shall be released from its obligations
under Sections 801, Sections 1006 and 1007, and any covenants provided pursuant
to 901(5) for the benefit of the Holders of such Securities; and (2) the
occurrence of any event specified in Sections 501(3) (with respect to any of
Section 801, Sections 1006 and 1007, and any such covenants provided pursuant to
Section 901(5)) shall be deemed not to be or result in an Event of Default, in
each case with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that, with respect to such Securities, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such specified Section (to the extent so specified
in the case of Section 501(3)), whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.

         Notwithstanding any Covenant Defeasance with respect to Section 801,
any Person that would otherwise have been required to assume the obligations of
the Company pursuant to said Section shall be required, as a condition to any
merger, consolidation, conveyance, transfer or lease contemplated thereby, to
assume the obligations of the Company to the Trustee under Sections 607 and
1205.

SECTION 1304. Conditions to Defeasance or Covenant Defeasance.

         The following shall be the conditions to the application of Section
1302 or Section 1303 to any Securities:

         (1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the requirements
contemplated by Section 609 and agrees to comply with the provisions of this
Article applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefits of the Holders of such Securities, (A) money in an amount, or
(B) Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(C) a combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or any such other qualifying trustee)
to pay and discharge, the

                                       69

principal of and any premium and interest on such Securities on the respective
Stated Maturities or on the Redemption Date, in accordance with the terms of
this Indenture and such Securities.

         (2) In the event of an election to have Section 1302 apply to any
Securities, the Company shall have delivered to the Trustee an Opinion of
Counsel stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of
this instrument, there has been a change in the applicable Federal income tax
law, in the case of either (A) or (B) to the effect that, and based thereon such
opinion shall confirm that, the Holders of such Securities 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 such Securities 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.

         (3) In the event of an election to have Section 1303 apply to any
Securities, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such Securities 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 such Securities 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.

         (4) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such deposit or,
with regard to any such event specified in Sections 501(4) and (5), at any time
on or prior to the 90th day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until after such 90th day).

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

         (6) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act unless such trust shall be registered
under the Investment Company Act or exempt from registration thereunder.

         (7) If such Securities are to be redeemed prior to Stated Maturity
(other than from mandatory sinking fund payments or analogous payments), notice
of such redemption shall have been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee shall have been made.

                                       70

         (8) The Company shall have delivered to the Trustee an Officers'
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 1305. Deposited Money and Government Obligations to Be Held in Trust;
              Miscellaneous Provisions.

         Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (including the proceeds thereof and the
interest thereon) deposited with the Trustee or other qualifying trustee (solely
for purposes of this Section and Section 1306, the Trustee and any such other
trustee are referred to collectively as the "Trustee") pursuant to Section 1304
in respect of any Securities shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal 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.

         The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1304 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of Outstanding Securities.

         Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations held by it as provided in Section 1304 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.

SECTION 1306. Reinstatement.

         If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or Governmental Authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1302 or 1303 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1305 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such

                                       71

reinstatement of its obligations, the Company shall be subrogated to the rights
(if any) of the Holders of such Securities to receive such payment from the
money so held in trust.

SECTION 1307. Qualifying Trustee.

         Any trustee appointed pursuant to Section 1304 for the purpose of
holding trust funds deposited pursuant to that Section shall be appointed under
an agreement in form acceptable to the Trustee and shall provide to the Trustee
a certificate of such trustee, upon which certificate the Trustee shall be
entitled to conclusively rely, that all conditions precedent provided for herein
to the related Defeasance or Covenant Defeasance have been complied with. In no
event shall the Trustee be liable for any acts or omissions of said trustee.

                                      * * *

                                       72

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

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

PRINCIPAL FINANCIAL GROUP, INC.

By:     ________________________
Name:
Title:

THE BANK OF NEW YORK,
as Trustee

By:     ________________________
Name:
Title:

                                       73

                                    EXHIBIT A

                                 [SPECIMEN BOND]

                           (FORM OF FACE OF SECURITY)

[If the Security is an Original Issue Discount Security, insert -- For purposes
of Section 1271 of the United States Internal Revenue Code of 1986, as amended,
the issue price of this security is __ % of its principal amount and the Issue
Date is ______________, 20__]

                         PRINCIPAL FINANCIAL GROUP, INC.
                               [Title of Security]

                                                        CUSIP:  _______________

No. _______                                                      $ __________

         PRINCIPAL FINANCIAL GROUP, INC., a corporation organized and existing
under the laws of Delaware (hereinafter called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to [Insert if Global Security -- Cede
& Co.], or registered assigns, the principal sum of ___________ Dollars on
_____________ [If the Security is to bear interest prior to Maturity, insert --
, and to pay interest thereon from _____________ or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on __________ and __________ in each year, commencing __________,
at the rate of __ % per annum, on the basis of a 360-day year consisting of
twelve 30-day months, until the principal hereof is paid or duly provided for or
made available for payment] [(If applicable insert - , and (to the extent that
the payment of such interest shall be legally enforceable) at the rate of __%
per annum on any overdue principal and premium and on any overdue installment of
interest)].

         [If the Security is to bear interest prior to Maturity, insert -- The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in the Indenture, be paid to the Person in whose
name this 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 date which is fifteen days (whether or not a Business Day) next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will 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 days prior to such Special Record Date, or be paid at
any time in any other lawful

                                      A-1

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].

         [If the Security is not to bear interest prior to Maturity, insert -
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ___% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of __% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or duly
provided for, and such interest shall also be payable on demand.]

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

         Payment of the principal of (and premium, if any) and [if applicable,
insert - any interest] on this Security will be made at the office or agency of
the Company maintained for that purpose in The City of 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 [if applicable, insert -;
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 shall appear in the Security Register].

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                      A-2

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                       PRINCIPAL FINANCIAL GROUP, INC.

                                       By: __________________________________
                                           Name:
                                           Title:

                                       By: __________________________________
                                           Name:
                                           Title:

                          CERTIFICATE OF AUTHENTICATION

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

                                       THE BANK OF NEW YORK,
                                         as Trustee

                                       By: __________________________________
                                                     Authorized Officer

                  Dated:

                                      A-3

                           FORM OF REVERSE OF SECURITY

         This Security is one of a duly authorized issue of securities of the
Company designated as its __________ due 20__ (herein called the "Securities"),
issued and to be issued in one or more series under a Subordinated Indenture,
dated as of _________, ____ as supplemented and amended from time to time by
_______________ (herein called the "Indenture"), between the Company and The
Bank of New York, 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 [if applicable
insert --, limited in aggregate principal amount to $___________].

         All terms used in this Security that are defined in the Indenture shall
have the meaning assigned to them in the Indenture.

         [If applicable, insert - The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail at any
time [on or after ____________, 20__], as a whole or in part, at the election of
the Company. The Redemption Price for any Security so redeemed shall be equal to
100% of the principal amount of such Securities then Outstanding plus accrued
and unpaid interest up to but not including the date fixed for redemption. In
the event of redemption of this Security in part only, a new Security or
Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.]

         [Installments of accrued and unpaid interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of the
Securities of this series, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Regular Record Dates according to
their terms.]

         The Indenture contains provisions for satisfaction, discharge and
defeasance of the entire indebtedness on this security, upon compliance by the
Company with certain conditions set forth therein.

         [If the Security is not an Original Issue Discount Security, - 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.] [If
the security is an Original Issue Discount Security, - If an Event of Default
with respect to Securities of this series shall occur and be continuing, an
amount of principal of the Securities of this series may be

                                      A-4

declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to - insert formula for determining the
amount.

         Upon payment of the amount of principal so declared due and payable [if
applicable insert-- and of interest on any overdue principal and overdue
interest (in each case to the extent that the payment of such interest shall be
legally enforceable)], all of the Company's obligations in respect of the
payment of the principal of and interest, if any, on the Securities of this
series shall terminate.]

         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 herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

         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 premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable 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
premium, if any) 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, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

         The Securities of this series are issuable only in registered form
without coupons in denominations of $______ and any integral multiple 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 of a different authorized denomination, as
requested by the Holder surrendering the same.

                                      A-5

         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.

         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 be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

         THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.

         EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE, THIS
SECURITY OR THE TRANSACTION CONTEMPLATED HEREBY.

                                      A-6

                                                                    Exhibit 4.05

                         PRINCIPAL FINANCIAL GROUP, INC.

                                       to

                            WILMINGTON TRUST COMPANY

                                     Trustee

                          JUNIOR SUBORDINATED INDENTURE

                               Dated as of _, 200_

                                TABLE OF CONTENTS

                                                                                                Page
                                                                                                ----
                                                                                          
                                   ARTICLE ONE
             Definitions and other Provisions of General Application

SECTION 101.   Definitions........................................................................1
SECTION 102.   Compliance Certificate and Opinions...............................................10
SECTION 103.   Forms of Documents Delivered to Trustee...........................................11
SECTION 104.   Acts of Holders...................................................................11
SECTION 105.   Notices, Etc......................................................................12
SECTION 106.   Notice to Holders; Waiver.........................................................13
SECTION 107.   Conflict With Trust Indenture Act.................................................13
SECTION 108.   Effect of Headings and Table of Contents..........................................13
SECTION 109.   Successors and Assigns............................................................13
SECTION 110.   Separability Clause...............................................................13
SECTION 111.   Benefits of Indenture.............................................................14
SECTION 112.   Governing Law.....................................................................14
SECTION 113.   Non-Business Days.................................................................14

                                   ARTICLE TWO
                                 Security Forms

SECTION 201.   Forms Generally...................................................................14
SECTION 202.   Form of Face of Security..........................................................15
SECTION 203.   Form of Reverse of Security.......................................................19
SECTION 204.   Additional Provisions Required in Global Security.................................21
SECTION 205.   Form of Trustee's Certificate of Authentication...................................22

                                  ARTICLE THREE
                                 The Securities

SECTION 301.   Title and Terms...................................................................22
SECTION 302.   Denominations.....................................................................24
SECTION 303.   Execution, Authentication, Delivery and Dating....................................25
SECTION 304.   Temporary Securities..............................................................26
SECTION 305.   Registration, Transfer and Exchange...............................................27
SECTION 306.   Mutilated, Destroyed, Lost and Stolen Securities..................................28
SECTION 307.   Payment of Interest; Interest Rights Preserved....................................29
SECTION 308.   Persons Deemed Owners.............................................................31
SECTION 309.   Cancellation......................................................................31
SECTION 310.   Computation of Interest...........................................................31

                                        i

                                                                                           
SECTION 311.   Deferrals of Interest Payment Dates...............................................31
SECTION 312.   Right of Set-Off..................................................................32
SECTION 313.   Agreed Tax Treatment..............................................................33
SECTION 314.   Extension of Stated Maturity; Adjustment of Stated Maturity Upon an Exchange......33
SECTION 315.   CUSIP Numbers.....................................................................33

                                  ARTICLE FOUR
                           Satisfaction and Discharge

SECTION 401.   Satisfaction and Discharge of Indenture...........................................34
SECTION 402.   Application of Trust Money........................................................35
SECTION 403.   Satisfaction, Discharge and Defeasance of Securities of Any Series................35

                                  ARTICLE FIVE
                                    Remedies

SECTION 501.   Events of Default.................................................................37
SECTION 502.   Acceleration of Maturity; Rescission and Annulment................................38
SECTION 503.   Collection of Indebtedness and Suits for Enforcement by Trustee...................40
SECTION 504.   Trustee May File Proofs of Claim..................................................40
SECTION 505.   Trustee May Enforce Claim Without Possession of Securities........................41
SECTION 506.   Application of Money Collected....................................................42
SECTION 507.   Limitation on Suits...............................................................42
SECTION 508.   Unconditional Right of Holders to Receive Principal, Premium and Interest.........43
SECTION 509.   Restoration of Rights and Remedies................................................43
SECTION 510.   Rights and Remedies Cumulative....................................................43
SECTION 511.   Delay or Omission Not Waiver......................................................44
SECTION 512.   Control by Holders................................................................44
SECTION 513.   Waiver of Past Defaults...........................................................45
SECTION 514.   Undertaking for Costs.............................................................45
SECTION 515.   Waiver of Stay or Extension Laws..................................................45

                                   ARTICLE SIX
                                   The Trustee

SECTION 601.   Certain Duties and Responsibilities...............................................46
SECTION 602.   Notice of Defaults................................................................47
SECTION 603.   Certain Rights of Trustee.........................................................47
SECTION 604.   Not Responsible for Recitals or Issuance of Securities............................48

                                       ii

                                                                                           
SECTION 605.   May Hold Securities...............................................................49
SECTION 606.   Money Held in Trust...............................................................49
SECTION 607.   Compensation and Reimbursement....................................................49
SECTION 608.   Disqualification; Conflicting Interests...........................................50
SECTION 609.   Corporate Trustee Required; Eligibility...........................................50
SECTION 610.   Resignation and Removal; Appointment of Successor.................................51
SECTION 611.   Acceptance of Appointment by Successor............................................52
SECTION 612.   Merger, Conversion, Consolidation or Succession to Business.......................53
SECTION 613.   Preferential Collection of Claims Against Company.................................54
SECTION 614.   Appointment of Authenticating Agent...............................................54

                                  ARTICLE SEVEN
                Holders' Lists and Reports by Trustee and Company

SECTION 701.   Company to Furnish Trustee Names and Addresses of Holders.........................56
SECTION 702.   Preservation of Information, Communications to Holders............................56
SECTION 703.   Reports by Trustee................................................................57
SECTION 704.   Reports by Company................................................................57

                                  ARTICLE EIGHT
              Consolidation, Merger, Conveyance, Transfer or Lease

SECTION 801.   Company May Consolidate, Etc......................................................58
SECTION 802.   Successor Corporation Substituted.................................................59

                                  ARTICLE NINE
                             Supplemental Indentures

SECTION 901.   Supplemental Indentures Without Consent of Holders................................60
SECTION 902.   Supplemental Indentures with Consent of Holders...................................61
SECTION 903.   Execution of Supplemental Indentures..............................................62
SECTION 904.   Effect of Supplemental Indentures.................................................63
SECTION 905.   Conformity with Trust Indenture Act...............................................63
SECTION 906.   Reference in Securities to Supplemental Indentures................................63

                                   ARTICLE TEN
                                    Covenants

SECTION 1001.  Payment of Principal, Premium and Interest........................................63
SECTION 1002.  Maintenance of Office or Agency...................................................63
SECTION 1003.  Money for Security Payments to be Held in Trust...................................64
SECTION 1004.  Payment of Taxes and Other Claims.................................................65
SECTION 1005.  Statement as to Compliance........................................................66
SECTION 1006.  Waiver of Certain Covenants.......................................................66

                                       iii

                                                                                           
SECTION 1007.  Additional Sums...................................................................66
SECTION 1008.  Additional Covenants..............................................................67

                                 ARTICLE ELEVEN
                            Redemption of Securities

SECTION 1101.  Applicability of This Article.....................................................68
SECTION 1102.  Election to Redeem; Notice to Trustee.............................................68
SECTION 1103.  Selection of Securities to be Redeemed............................................68
SECTION 1104.  Notice of Redemption..............................................................69
SECTION 1105.  Deposit of Redemption Price.......................................................69
SECTION 1106.  Payment of Securities Called for Redemption.......................................70
SECTION 1107.  Company's Right of Redemption.....................................................70

                                 ARTICLE TWELVE
                           Subordination of Securities

SECTION 1201.  Securities Subordinate to Senior Debt.............................................73
SECTION 1202.  Payment Over of Proceeds Upon Dissolution, Etc....................................73
SECTION 1203.  Prior Payment to Senior Debt Upon Acceleration of Securities......................74
SECTION 1204.  No Payment When Senior Debt in Default............................................75
SECTION 1205.  Payment Permitted If No Default...................................................76
SECTION 1206.  Subrogation to Rights of Holders of Senior Debt...................................76
SECTION 1207.  Provisions Solely to Define Relative Rights.......................................76
SECTION 1208.  Trustee to Effectuate Subordination...............................................77
SECTION 1209.  No Waiver of Subordination Provisions.............................................77
SECTION 1210.  Notice to Trustee.................................................................77
SECTION 1211.  Reliance on Judicial Order or Certificate of Liquidating Agent....................78
SECTION 1212.  Trustee Not Fiduciary for Holders of Senior Debt..................................78
SECTION 1213.  Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights......78
SECTION 1214.  Article Applicable to Paying Agents...............................................78
SECTION 1215.  Certain Conversions or Exchanges Deemed Payment...................................79

Annex A  --       Form of Trust Agreement

Annex B  --       Form of Amended and Restated Trust Agreement

Annex C  --       Form of Guarantee Agreement

                                       iv

                                                                    Exhibit 4.05

                         PRINCIPAL FINANCIAL GROUP, INC.

      Reconciliation and tie between the Trust Indenture Act of 1939 (including
cross-references to provisions of Sections 310 to and including 317 which,
pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended by the
Trust Reform Act of 1990, are a part of and govern the Indenture whether or not
physically contained therein) and the Indenture.

Trust Indenture
Act Section                                                                              Indenture Section
- -----------                                                                              -----------------

Section 310 (a)(1), (2) and (5)........................................................................609
            (a)(3)..........................................................................Not Applicable
            (a)(4)..........................................................................Not Applicable
            (b)...................................................................................608, 610
            (c).............................................................................Not Applicable
Section 311 (a).....................................................................................613(a)
            (b).....................................................................................613(b)
            (b)(2)...............................................................................703(a)(2)
Section 312 (a)................................................................................701, 702(a)
            (b).....................................................................................702(b)
            (c).....................................................................................702(c)
Section 313 (a).....................................................................................703(a)
            (b).....................................................................................703(b)
            (c).............................................................................703(a), 703(b)
            (d).....................................................................................703(c)
Section 314 (a)(1), (2) and (3)........................................................................704
            (a)(4)....................................................................................1006
            (b).............................................................................Not Applicable
            (c)(1).....................................................................................102
            (c)(2).....................................................................................102
            (c)(3)..........................................................................Not Applicable
            (d).............................................................................Not Applicable
            (e)........................................................................................102
            (f).............................................................................Not Applicable
Section 315 (a).....................................................................................601(a)
            (b).............................................................................602, 703(a)(6)
            (c).....................................................................................601(b)
            (d).....................................................................................601(c)
            (d)(1)...............................................................................601(a)(1)
            (d)(2)...............................................................................601(c)(2)
            (d)(3)...............................................................................601(c)(3)

                                        v

                                                                                      
            (e)........................................................................................514
Section 316 (a)........................................................................................101
            (a)(1)(A)..................................................................................512
            (a)(1)(B)..................................................................................513
            (a)(2)..........................................................................Not Applicable
            (b)........................................................................................508
            (c).....................................................................................104(f)
Section 317 (a)(1).....................................................................................503
            (a)(2).....................................................................................504
            (b).......................................................................................1003
Section 318 (a)........................................................................................107

Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
      part of the Indenture.

                                       vi

                                                                    Exhibit 4.05

      JUNIOR SUBORDINATED INDENTURE, dated as of _, 200_, between PRINCIPAL
FINANCIAL GROUP, INC., a Delaware corporation (hereinafter called the "Company")
having its principal office at 711 High Street, Des Moines, Iowa 50392, and
Wilmington Trust Company, a Delaware banking corporation duly organized and
existing under the laws of the State of Delaware, as Trustee (hereinafter called
the "Trustee").

                             RECITALS OF THE COMPANY

      The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured junior
subordinated debt securities in series (hereinafter called the "Securities") of
substantially the tenor hereinafter provided, including, without limitation,
Securities issued to evidence loans made to the Company of the proceeds from the
issuance from time to time by one or more statutory trusts (each a "Principal
Trust", and collectively, the "Principal Trusts") of preferred trust interests
in such Trusts (the "Preferred Securities") and common interests in such Trusts
(the "Common Securities"), and to provide the terms and conditions upon which
the Securities are to be authenticated, issued and delivered.

      All things necessary to make the Securities, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and its terms, have been done.

      NOW THEREFORE, THIS INDENTURE WITNESSETH:

      For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of any
series thereof, as follows:

                                   ARTICLE ONE

             Definitions and other Provisions of General Application

SECTION 101. Definitions.

      For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:

      (1) The terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;

      (2) All other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;

      (3) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles which are generally accepted at the date or time of such computation;
provided, that when two or more principles are so generally accepted, it shall
mean that set of principles consistent with those in use by the Company; and

      (4) 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 Article Six, are defined in that
Article.

      "Act" when used with respect to any Holder has the meaning specified in
Section 104.

      "Additional Interest" means the interest, if any, that shall accrue on any
interest on the Securities of any series that is in arrears for more than one
interest payment period or not paid during any Extension Period, which in either
case shall accrue at the rate per annum specified or determined as specified in
such Security.

      "Additional Sums" has the meaning specified in Section 1007.

      "Additional Taxes" means the sum of additional taxes, duties and other
governmental charges to which a Principal Trust has become subject from time to
time as a result of a Tax Event.

      "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; provided, however, that an Affiliate of the
Company shall not be deemed to include any Principal Trust to which Securities
have been issued. 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.

      "Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.

      "Board of Directors" means either the board of directors of the Company or
any committee of that board duly authorized to act hereunder.

                                       2

      "Board Resolution" means a copy of a resolution certified by the
Secretary, the Corporate Secretary or an Assistant Secretary of the Company to
have been duly adopted by the Board of Directors, or such committee of the Board
of Directors or officers of the Company to which authority to act on behalf of
the Board of Directors has been delegated, and to be in full force and effect on
the date of such certification, and delivered to the Trustee.

      "Business Day" means any day other than (i) a Saturday or Sunday or (ii) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or (iii) a day on which the
Corporate Trust Office of the Trustee, or, with respect to the Securities of a
series issued to a Principal Trust, the principal office of the Property Trustee
under the related Trust Agreement, is closed for business.

      "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, 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 on such date.

      "Common Securities" has the meaning specified in the first recital of this
Indenture.

      "Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.

      "Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by the Chairman, President,
Chief Executive Officer or a Vice President, and by the Treasurer, an Associate
Treasurer, an Assistant Treasurer, the Controller, the Secretary, the Corporate
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.

      "Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered.

      "Corporation" includes corporations, associations, companies and business
trusts.

      "Current Value" has the meaning specified in Section 1107.

      "Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds,

                                       3

debentures, notes or other similar instruments, including obligations incurred
in connection with the acquisition of property, assets or businesses; (iii)
every reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person; (iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business); (v) every
capital lease obligation of such Person; and (vi) every obligation of the type
referred to in clauses (i) through (v) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable, directly or indirectly, as obligor or otherwise.

      "Defaulted Interest" has the meaning specified in Section 307.

      "Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary by the Company pursuant to Section 301 with
respect to such series (or any successor thereto).

      "Discounted Remaining Fixed Amount Payments" has the meaning specified in
Section 1107.

      "Discounted Swap Equivalent Payments" has the meaning specified in Section
1107.

      "Dollar" means the currency of the United States of America as at the time
of payment is legal tender for the payment of public and private debts.

      "Event of Default" unless otherwise specified in the supplemental
indenture creating a series of Securities, has the meaning specified in Article
Five.

      "Extension Period" has the meaning specified in Section 311.

      "Foreign Currency" means any currency issued by the government of one or
more countries other than the United States of America or by any recognized
confederation or association of such governments.

      "Global Security" means a Security in the form prescribed in Section 204
evidencing all or part of a series of Securities, issued to the Depositary or
its nominee for such series, and registered in the name of such Depositary or
its nominee.

      "Government Obligations" means, with respect to the Securities of any
series, securities which are (i) direct obligations of the United States of
America or (ii) obligations 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

                                       4

guaranteed by the United States of America and which, in either case, are full
faith and credit obligations of the United States of America and are not
callable or redeemable at the option of the issuer thereof and shall also
include a depository 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 such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the holder
of such depository receipt; 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 depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of the Government Obligation evidenced by such depository receipt.

      "Guarantor" means Principal Financial Services, Inc., an Iowa business
corporation, and its successors and assigns.

      "Holder" means a Person in whose name a Security is registered in the
Securities Register.

      "Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of each particular series of Securities established as
contemplated by Section 301.

      "Interest Payment Date" means as to each series of Securities the Stated
Maturity of an installment of interest on such Securities.

      "Interest Rate" means the rate of interest specified or determined as
specified in each Security as being the rate of interest payable on such
Security.

      "Investment Company Event" means, in respect of a Principal Trust, the
occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law") to the effect that
such Principal Trust is or will be considered an "investment company" that is
required to be registered under the 1940 Act, which Change in 1940 Act Law
becomes effective on or after the date of original issuance of the Preferred
Securities of such Principal Trust.

      "Junior Subordinated Payment" has the meaning specified in Section 1202.

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

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

      "1940 Act" means the Investment Company Act of 1940, as amended.

                                       5

      "Notice of Default" has the meaning specified in Section 501(3).

      "Officers' Certificate" means a certificate signed by the Chairman,
President, Chief Executive Officer or a Vice President, and by the Treasurer, an
Associate Treasurer, an Assistant Treasurer, the Controller, the Secretary, the
Corporate Secretary or an Assistant Secretary of the Company, and delivered to
the Trustee.

      "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company.

      "Original Issue Date" means the date of issuance specified as such in each
Security.

      "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 502.

      "Outstanding" means, as of the date of determination, all Securities
theretofore authenticated and delivered under this Indenture, except:

            (i) Securities theretofore canceled by the Trustee or delivered to
      the Trustee for cancellation;

            (ii) Securities for whose payment money in the necessary amount has
      been theretofore deposited with the Trustee or any Paying Agent in trust
      for the Holders of such Securities; provided that, if such Securities are
      to be redeemed, notice of such redemption has been duly given pursuant to
      this Indenture or provision therefore satisfactory to the Trustee has been
      made; and

            (iii) Securities in substitution for or in lieu of which other
      Securities have been authenticated and delivered or which have been paid
      pursuant to Section 306, unless proof satisfactory to the Trustee is
      presented that any such Securities are held by Holders in whose hands such
      Securities are valid, binding and legal obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the

                                       6

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 such other obligor. Upon request
of the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Securities, if any, known by the Company
to be owned or held by or for the account of the Company, or any other obligor
on the Securities or any Affiliate of the Company or such obligor, and, subject
to the provisions of Section 601, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Securities not listed therein are Outstanding for the
purpose of any such determination.

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

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

      "PFSI Guarantee", when used with respect to the Securities of or within
any series, means a guarantee by the Guarantor of the obligations of the Company
under such Securities, which guarantee may be included in an indenture or
indentures supplemental hereto or in a separate agreement.

      "Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of (and premium, if any) and interest on
the Securities of such series are payable pursuant to Section 301 or 311.

      "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any security
authenticated and delivered under Section 306 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.

      "Preferred Securities" has the meaning specified in the first recital of
this Indenture.

      "Principal Guarantee" means the guarantee by the Company of distributions
on the Preferred Securities of a Principal Trust to the extent provided in the
Principal Guarantee Agreement, substantially in the form attached hereto as
Annex C, or substantially in such form as may be specified as contemplated by
Section 301 with respect to the Securities of any series, in each case as
amended from time to time.

      "Principal Guarantee Agreement" means the Guarantee Agreement executed and
delivered by the Company and Wilmington Trust Company, as trustee,
contemporaneously with the execution and delivery of the Trust Agreement, for
the benefit of the holders of the Preferred Securities, as amended from time to
time.

      "Principal Trust" has the meaning specified in the first recital of this
Indenture.

      "Proceeding" has the meaning specified in Section 1202.

      "Property Trustee" means, in respect of any Principal Trust, the
commercial bank or trust company identified as the "Property Trustee" in the
related Trust Agreement, solely in its capacity as Property Trustee of such
Principal Trust under such Trust

                                       7

Agreement and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as therein provided.

      "Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 301 with respect to Securities of a series, the date which
is fifteen days next preceding such Interest Payment Date (whether or not a
Business Day).

      "Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee assigned by the Trustee from time to time to administer
its corporate trust matters.

      "Restricted Subsidiary" means Principal Life Insurance Company and any
other Subsidiary which is incorporated under the laws of any state of the United
States or the District of Columbia and which is a regulated insurance company
principally engaged in one or more of the life, annuity, property and casualty
insurance businesses, provided that no such Subsidiary, other than Principal
Life Insurance Company, shall be a Restricted Subsidiary if (i) the total assets
of such Subsidiary are less than 10% of the total assets of the Company and its
consolidated Subsidiaries (including such Subsidiary), in each case as set forth
on the most recent fiscal year-end balance sheets of such Subsidiary and the
Company and its consolidated Subsidiaries, respectively, and computed in
accordance with generally accepted accounting principles, or (ii) in the
judgment of the Board of Directors, as evidenced by a Board Resolution, such
Subsidiary is not material to the financial condition of the Company and its
consolidated Subsidiaries taken as a whole.

      "Securities" or "Security" means any debt securities or debt security, as
the case may be, authenticated and delivered under this Indenture.

      "Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 305.

      "Senior Debt" means the principal of (and premium, if any) and interest,
if any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Securities or to other Debt which is pari
passu with, or subordinated to, the Securities, provided, however, that Senior
Debt shall not be deemed to include (a) any Debt of the Company to any of its
Subsidiaries, (b) Debt to any employee of the Company, (c) any liability for
taxes, (d) Debt or other monetary obligations to trade creditors created or
assumed by the Company or any of its

                                       8

Subsidiaries in the ordinary course of business in connection with the obtaining
of goods, materials or services and (e) the Securities.

      "Special Event" means a Tax Event or an Investment Company Event.

      "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.

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

      "Subsidiary" means any corporation of which at the time of determination
the Company and/or one or more Subsidiaries owns or controls directly or
indirectly more than 50% of the outstanding shares of voting stock. For purposes
of this definition, "voting stock" means stock which has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.

      "Tax Event" means the receipt by a Principal Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after the date of
issuance of the Preferred Securities of such Principal Trust, there is more than
an insubstantial risk that (i) the Principal Trust is, or will be within 90 days
of the date thereof, subject to United States Federal income tax with respect to
income received or accrued on the corresponding series of Securities, (ii)
interest payable by the Company on the corresponding series of Securities is
not, or within 90 days of the date thereof, will not be, deductible, in whole or
in part, for United States Federal income tax purposes or (iii) the Principal
Trust is, or will be within 90 days of the date thereof, subject to more than a
de minimis amount of other taxes, duties or other governmental charges.

      "Trust Agreement" means the Trust Agreement substantially in the form
attached hereto as Annex A, as amended by the form of Amended and Restated Trust
Agreement substantially in the form attached hereto as Annex B, or substantially
in such form as may be specified as contemplated by Section 301 with respect to
the Securities of any series, in each case as amended from time to time.

      "Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable

                                       9

provisions of this Indenture, and thereafter "Trustee" shall 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 shall mean the Trustee with respect to Securities of that series.

      "Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbb), as amended and as in effect on the date as of this
Indenture, except as provided in Section 905.

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

SECTION 102. Compliance Certificate and Opinions.

      Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent
(including covenants, compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (including covenants compliance with which
constitute a condition precedent), if any, have been complied with, except that
in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.

      Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than the certificates provided
pursuant to Section 1006) shall include:

      (1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;

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

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

      (4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.

                                       10

SECTION 103. Forms 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.

      Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

      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 104. Acts of Holders.

      (a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given to 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 an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments is or 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 shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company and any agent of the Trustee or the Company, if made in the manner
provided in this Section.

      (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 the certificate of any notary public or other officer authorized
by law to take acknowledgments of

                                       11

deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by a Person
acting in other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his authority.

      (c) The fact and date of the execution by any Person 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 and in
accordance with such reasonable rules as the Trustee may determine.

      (d) The ownership of Securities shall be proved by the Securities
Register.

      (e) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done
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.

      (f) The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to take any action under this
Indenture by vote or consent. Except as otherwise provided herein, such record
date shall be the later of 30 days prior to the first solicitation of such
consent or vote or the date of the most recent list of Securityholders furnished
to the Trustee pursuant to Section 701 prior to such solicitation. If a record
date is fixed, those persons who were Securityholders at such record date (or
their duly designated proxies), and only those persons, shall be entitled to
take such action by vote or consent or to revoke any vote or consent previously
given, whether or not such persons continue to be Holders after such record
date, provided, however, that unless such vote or consent is obtained from the
Holders (or their duly designated proxies) of the requisite principal amount of
Outstanding Securities prior to the date which is the 120th day after such
record date, any such vote or consent previously given shall automatically and
without further action by any Holder be canceled and of no further effect.

SECTION 105. Notices, Etc. to Trustee and Company.

      Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,

      (1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee at its Corporate Trust office, or

                                       12

      (2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose (except as otherwise provided in Section 501 hereof) hereunder if
in writing and mailed, first class, postage prepaid, to the Company addressed to
it at the address of its principal office specified in the first paragraph of
this instrument or at any other address previously furnished in writing to the
Trustee by the Company.

SECTION 106. Notice to Holders; Waiver.

      Where this Indenture provides for notice to Holders of any event, such
notice shall 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 the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, 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 shall 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 shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

SECTION 107. Conflict With Trust Indenture Act.

      If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of Sections 310 to 317, inclusive, of the Trust Indenture
Act through operation of Section 318(c) thereof, such imposed duties shall
control.

SECTION 108. Effect of Headings and Table of Contents.

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

SECTION 109. Successors and Assigns.

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

SECTION 110. Separability Clause.

      In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

                                       13

SECTION 111. Benefits of Indenture.

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

SECTION 112. Governing Law.

      This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.

SECTION 113. Non-Business Days.

      In any case where any Interest Payment Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or the Securities) payment of interest or principal need not
be made on such date, but may be made on the next succeeding Business Day and no
interest shall accrue for the period from and after such Interest Payment Date
or Stated Maturity, as the case may be, until the next succeeding Business Day,
in each case with the same force and effect as if made on the Interest Payment
Date or at the Stated Maturity, except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day.

                                   ARTICLE TWO

                                 Security Forms

SECTION 201. Forms Generally.

      The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture 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 applicable tax laws or 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 shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 with respect to the authentication and
delivery of such Securities.

                                       14

         The Trustee's certificates of authentication shall be substantially in
the form set forth in this Article.

         The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
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.

SECTION 202. Form of Face of Security.

         [If the Security is a Global Security, insert -- This Security is a
Global Security within the meaning of the Indenture hereinafter referred to and
is registered in the name of The Depository Trust Company (the "Depository") or
a nominee of the Depository. This Security is exchangeable for Securities
registered in the name of a person other than the Depository or its nominee only
in the limited circumstances described in the Indenture and no transfer of this
Security (other than a transfer of this Security as a whole by the Depository to
a nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository) may be registered except in limited
circumstances.

         Unless this Security is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York) to Principal Financial
Group, Inc. or its agent for registration of transfer, exchange or payment, and
any Security issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.]

         If the Security is an Original Issue Discount Security, insert -- This
Security was issued with original issue discount for United States Federal
income tax purposes. For further information, please contact [name, title and
address or telephone number of a representative of the Company].

                         PRINCIPAL FINANCIAL GROUP, INC.
                               (Title of Security)

No. _____                                                               $_______

         PRINCIPAL FINANCIAL GROUP, INC., a corporation organized and existing
under the laws of Delaware (hereinafter called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received,

                                       15

hereby promises to pay to _______, or registered assigns, the principal sum of
______ Dollars on ________,[; provided that the Company may (i) change the
maturity date upon the occurrence of an exchange of the Securities for the Trust
Securities subject to certain conditions set forth in Section 314 of the
Indenture, which changed maturity date shall in no case be earlier than   , or
later than   , and (ii) extend the maturity date subject to certain conditions
specified in Section 314 of the Indenture, which extended maturity date shall in
no case be later than        ,]. The Company further promises to pay interest on
said principal sum from ______, ___ or from the most recent interest payment
date (each such date, an "Interest Payment Date") on which interest has been
paid or duly provided for, [monthly] [quarterly] [semi-annually] [if applicable,
insert-(subject to deferral as set forth herein)] in arrears on [insert
applicable Interest Payment Dates] of each year, commencing ______, ___, at the
rate of ___% per annum, until the principal hereof shall have become due and
payable, [if applicable, insert- plus Additional Interest, if any,] until the
principal hereof is paid or duly provided for or made available for payment [if
applicable, insert- and on any overdue principal and (without duplication and to
the extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the rate of ___% per annum, compounded
[monthly] [quarterly] [annually]. The amount of interest payable for any period
will be computed on the basis of twelve 30-day months and a 360-day year. The
amount of interest payable for any partial period shall be computed on the basis
of the number of days elapsed in a 360-day year of twelve 30-day months. In the
event that any date on which interest is payable on this Security is not a
Business Day, then a payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date the payment was originally payable. A "Business Day"
shall mean any day other than a day on which banking institutions in the City of
New York are authorized or required by law or executive order to remain closed
or a day on which the Corporate Trust Office of the Trustee [if applicable,
insert-, or the principal office of the Property Trustee under the Trust
Agreement hereinafter referred to for Principal Capital __,] is closed for
business. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities, as defined in the Indenture) is registered at the close of business
on the Regular Record Date for such interest installment, which shall be the
[[insert Regular Record Dates] (whether or not a Business Day)] [close of
business on the Business Day] next preceding such Interest Payment Date. Any
such interest installment not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and may
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

                                       16

10 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.

         [If applicable, insert- The Company shall have the right at any time
during the term of this Security, from time to time, to extend the interest
payment period of such Security for up to __ consecutive [months] [quarters]
with respect to each deferral period (each an "Extension Period"), during which
periods the Company shall have the right to make partial payments of interest on
any Interest Payment Date, and at the end of which the Company shall pay all
interest then accrued and unpaid (together with Additional Interest thereon to
the extent permitted by applicable law); provided that during any such Extension
Period, the Company will not, and will not permit any Subsidiary of the Company
to (i) declare or pay any dividends or distributions or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
outstanding capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt security that ranks
pari passu with or junior in interest to this Security or make any guarantee
payments with respect to the foregoing (other than (a) dividends or
distributions in common stock of the Company, (b) redemptions or purchases of
any rights pursuant to the Company's Rights Plan, or any successor to such
Rights Plan, and the declaration of a dividend of such rights in the future, and
(c) payments under any Principal Guarantee (as defined in the Indenture)). Prior
to the termination of any such Extension Period, the Company may further extend
the interest payment period, provided that such Extension Period together with
all such previous and further extensions of such Extension Period, shall not
exceed __ consecutive [months] [quarters] or extend beyond the Maturity of this
Security. Upon the termination of any such Extension Period and upon the payment
of all accrued and unpaid interest and any Additional Interest then due, the
Company may select a new Extension Period, subject to the above requirements. No
interest shall be due and payable during an Extension Period except at the end
thereof. The Company shall give the Holder of this Security and the Trustee
notice of its selection of an Extension Period at least one Business Day prior
to the Interest Payment Date [if applicable, insert- the earlier of (i) the date
the Distributions on the Preferred Securities are payable or (ii) the date the
Administrative Trustees are required to give notice to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of such
Preferred Securities of the record date or the date such Distributions are
payable, but in any event not less than one Business Day prior to such record
date.

         Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, 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 [if applicable, insert-; provided, however, that at the option of
the Company payment of interest may be made

                                       17

(i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Securities Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the Securities
Register].

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

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:

                           PRINCIPAL FINANCIAL GROUP, INC.

                           By: ______________________________________
                               [Chairman, President, Chief
                               Executive Officer or Vice President]

Attest:

__________________________________
[Secretary, Corporate Secretary
 or Assistant Secretary]

                                       18

SECTION 203. Form of Reverse of Security.

         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 a Junior Subordinated Indenture, dated as of _______ __, 200-
(herein called the "Indenture"), between the Company and Wilmington Trust
Company, 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 Trustee,
the Company 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 $______].

         All terms used in this Security that are defined in the Indenture [if
applicable, insert- or in the Trust Agreement, dated _________, 200-, as
amended (the "Trust Agreement"), among Principal Financial Group, Inc. as
Depositor, and the Trustees named therein, for Principal Capital __,] shall have
the meanings assigned to them in the Indenture [if applicable, insert- or the
Trust Agreement, as the case may be].

         [If applicable, insert- The Company may, at its option, subject to the
terms and conditions of Article Eleven of the Indenture, redeem this Security
after its date of issuance in whole or in part at any time and from time to
time, without premium or penalty, at a redemption price equal to the accrued and
unpaid interest [if applicable, insert-, including Additional Interest, if any,]
to the date fixed for redemption, plus the greater of (a) the principal amount
thereof and (b) an amount equal to [for Securities bearing interest at a fixed
rate: the Discounted Remaining Fixed Amount Payments] [for Securities bearing
interest determined by a floating rate: the Discounted Swap Equivalent
Payments].

         [If applicable, insert- If a Special Event in respect of a Principal
Trust shall occur and be continuing, the Company may, at its option, redeem the
corresponding series of Securities on any date falling within 90 days of the
occurrence of such Special Event, in whole but not in part, subject to the
provisions of Section 1107 and the other provisions of Article Eleven of the
Indenture. The redemption price for any Security so redeemed shall be equal to
100% of the principal amount thereof plus accrued and unpaid interest, including
Additional Interest, if any, to the date fixed for redemption.]

         [Installments of accrued and unpaid interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of the
Securities of this series, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Regular Record Dates according to
their terms.]

                                       19

         In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.

         [If the Security is not an Original Issue Discount Security, - 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, with the effect and subject to the conditions
provided in the Indenture.]

         [If the security is an Original Issue Discount Security, - If an Event
of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture. Such amounts shall be equal to - insert
formula for determining the amount. Upon payment (i) of the amount of principal
so declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of and interest, if any, on the Securities of this
series shall terminate.]

         The Indenture contains provisions for satisfaction, discharge and
defeasance at any time of the entire indebtedness of this Security upon
compliance by the Company with certain conditions set forth 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 of
each series at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting 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 herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

         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 premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

                                       20

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained under Section 1002 of the Indenture
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the same
aggregate principal amount, will 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 be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         The Securities of this series are issuable only in registered form
without coupons in denominations of $____ and any integral multiple 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 such series of a different authorized denomination, as
requested by the Holder surrendering the same.

         [If applicable, insert- The Company and, by its acceptance of this
Security or a beneficial interest therein, the Holder of, and any Person that
acquires a beneficial interest in, this Security agree that for United States
Federal, state and local tax purposes it is intended that this Security
constitute indebtedness.]

         THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.

SECTION 204. Additional Provisions Required in Global Security.

         Any Global Security issued hereunder shall, in addition to the
provisions contained in Sections 202 and 203 bear a legend in substantially the
following form:

         "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 of a Depositary. This Security is exchangeable for Securities registered
in the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Indenture and may not be transferred
except as a whole by the

                                       21

Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary."

SECTION 205. Form of Trustee's Certificate of Authentication.

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

                                  _________________________________________
                                  as Trustee

                                  By: _____________________________________
                                      Authorized Officer

                                 ARTICLE THREE

                                 The Securities

SECTION 301. Title and Terms.

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

         The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of a series:

         (a) the title of the Securities of such series, which shall distinguish
the Securities of the series from all other Securities;

         (b) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the same
series pursuant to Section 304, 305, 306, 906 or 1106); provided, however, that
the authorized aggregate principal amount of such series may be increased above
such amount by a Board Resolution to such effect;

         (c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof;

         (d) the rate or rates, if any, at which the Securities of such series
shall bear interest, if any, the rate or rates and extent to which Additional
Interest, if any, shall be payable in respect of any Securities of such series,
the Interest Payment Dates on which such interest shall be payable, the right,
pursuant to Section 311 or as otherwise set forth

                                       22

therein, of the Company to defer or extend an Interest Payment Date, and the
Regular Record Date for the interest payable on any Interest Payment Date or the
method by which any of the foregoing shall be determined;

         (e) the place or places where the principal of (and premium, if any)
and interest on the Securities of such series shall be payable, the place or
places where the Securities of such series may be presented for registration of
transfer or exchange, and the place or places where notices and demands to or
upon the Company in respect of the Securities of such series may be made;

         (f) the period or periods within or the date or dates on which, if any,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the option of
the Company;

         (g) the obligation or the right, if any, of the Company to redeem,
repay or purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions or at the option of a Holder thereof and
the period or periods within which, the price or prices at which, the currency
or currencies (including currency unit or units) in which and the other terms
and conditions upon which Securities of the series shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;

         (h) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $25 and any integral multiple thereof;

         (i) if other than Dollars, the currency or currencies (including
currency unit or units) in which the principal of (and premium, if any) and
interest, if any, on the Securities of the series shall be payable, or in which
the Securities of the series shall be denominated;

         (j) the additions, modifications or deletions, if any, in the Events of
Default or covenants of the Company set forth herein with respect to the
Securities of such series;

         (k) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;

         (l) the additions or changes, if any, to this Indenture with respect to
the Securities of such series as shall be necessary to permit or facilitate the
issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;

         (m) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;

                                       23

         (n) the issuance of a temporary Global Security representing all of the
Securities of such series and exchange of such temporary Global Security for
definitive Securities of such series;

         (o) whether the Securities of the series shall be issued in whole or in
part in the form of one or more Global Securities and, in such case, the
Depositary for such Global Securities, which Depositary shall be a clearing
agency registered under the Securities Exchange Act of 1934, as amended;

         (p) the appointment of any Paying Agent or Agents for the Securities of
such series;

         (q) the terms of any right to convert or exchange Securities of such
series into any other securities or property of the Company, and the additions
or changes, if any, to this Indenture with respect to the Securities of such
series to permit or facilitate such conversion or exchange;

         (r) the form or forms of the Trust Agreement, Amended and Restated
Trust Agreement and Guarantee Agreement, if different from the forms attached
hereto as Annexes A, B and C, respectively;

         (s) the relative degree, if any, to which the Securities of the series
shall be senior to or be subordinated to other series of Securities in right of
payment, whether such other series of Securities are Outstanding or not;

         (t) whether the Guarantor will guarantee the obligations of the Company
under the Securities of such series and if so, the specific form of such PFSI
Guarantee or PFSI Guarantees, any related modifications, amendments, supplements
or deletions of any of the terms of this Indenture, and a statement that the
Guarantor shall be an "obligor" as such term is defined in and solely for
purposes of the Trust Indenture Act and shall be required to comply with those
provisions of this Indenture compliance with which is required by an "obligor"
under the Trust Indenture Act; and

         (u) any other terms of the Securities of such series or any related
PFSI Guarantee (which terms shall not be inconsistent with the provisions of the
Trust Indenture Act, but may modify, amend, supplement or delete any of the
terms of this Indenture with respect to such series), including any terms which
may be required by or advisable under United States laws or regulations or
advisable (as determined by the Company) in connection with the marketing of
Securities of the series;

provided, that if the Guarantor will guarantee the obligations of the Company
under the Securities of a series, such matters shall be established in one or
more indenture supplements hereto to which the Company, the Guarantor and the
Trustee shall be a party.

         All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth in such Officers' Certificate
or in any such indenture supplemental hereto.

         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
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.

SECTION 302. Denominations.

         The Securities of each series shall be in registered form without
coupons and shall be issuable in denominations of $25 and any integral multiple
thereof, unless otherwise specified as contemplated by Section 301.

                                       24

SECTION 303. Execution, Authentication, Delivery and Dating.

         The Securities shall be executed on behalf of the Company by its
President or one of its Vice Presidents under its corporate seal reproduced or
impressed thereon and attested by its Secretary, the Corporate Secretary or one
of its Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.

         Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall 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. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities executed by the Company to the Trustee for authentication. Securities
may be authenticated on original issuance from time to time and delivered
pursuant to such procedures acceptable to the Trustee ("Procedures") as may be
specified from time to time by Company Order. Procedures may authorize
authentication and delivery pursuant to oral instructions of the Company or a
duly authorized agent, which instructions shall be promptly confirmed in
writing.

         Prior to the delivery of a Security in any such form to the Trustee for
authentication, the Company shall deliver to the Trustee the following:

         (a) A Company Order requesting the Trustee's authentication and
delivery of all or a portion of the Securities of such series, and if less than
all, setting forth procedures for such authentication;

         (b) The Board Resolution by or pursuant to which such form of Security
has been approved, and the Board Resolution, if any, by or pursuant to which the
terms of the Securities of such series have been approved, and, if pursuant to a
Board Resolution, an Officers' Certificate describing the action taken;

         (c) An Officers' Certificate dated the date such certificate is
delivered to the Trustee, stating that all conditions precedent provided for in
this Indenture relating to the authentication and delivery of Securities in such
form and with such terms have been complied with; and

         (d) An Opinion of Counsel stating that (i) the form of such Securities
has been duly authorized and approved in conformity with the provisions of this
Indenture; (ii) the terms of such Securities have been duly authorized and
determined in conformity with the provisions of this Indenture, or, if such
terms are to be determined pursuant to Procedures, when so determined such terms
shall have been duly authorized and determined in conformity with the provisions
of this Indenture; and (iii) Securities in such form when completed by
appropriate insertions and executed and delivered by the

                                       25

Company to the Trustee for authentication in accordance with this Indenture,
authenticated and delivered by the Trustee in accordance with this Indenture
within the authorization as to aggregate principal amount established from time
to time by the Board of Directors and sold in the manner specified in such
opinion of Counsel, will be the legal, valid and binding obligations of the
Company entitled to the benefits of this Indenture, subject to applicable
bankruptcy, reorganization, insolvency and similar laws generally affecting
creditors' rights, to general equitable principles except as enforcement thereof
may be limited by (A) requirements that a claim with respect to any Securities
denominated other than in Dollars (or a Foreign Currency or currency unit
judgment in respect of such claim) be converted into Dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law or (B)
governmental authority to limit, delay or prohibit the making of payments in
Foreign Currencies or currency units or payments outside the United States and
subject to such other qualifications as such counsel shall conclude do not
materially affect the rights of Holders of such Securities;

provided, however, that the Trustee shall be entitled to receive the documents
referred to in Clauses (b), (c) and (d) above only at or prior to the first
request of the Company to the Trustee to authenticate Securities of such series.

         Each Security shall be dated the date of its authentication.

         No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder.

SECTION 304. Temporary Securities.

         Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any denomination, substantially of the
tenor of the definitive Securities of such series in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may determine, as evidenced
by their execution of such Securities.

         If temporary Securities of any series are issued, the Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary Securities
shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for that purpose
without charge to the Holder. Upon surrender for

                                       26

cancellation of any one or more temporary Securities, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of the same series of authorized
denominations having the same Original Issue Date and Stated Maturity and having
the same terms as such temporary Securities. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.

SECTION 305. Registration, Transfer and Exchange.

         The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities. Such register is herein sometimes referred to as the
"Securities Register." The Trustee is hereby appointed "Securities Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided.

         Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated for that purpose the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations, of a like aggregate principal amount, of
the same original Issue Date and Stated Maturity and having the same terms.

         At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.

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

         Every Security presented or surrendered for transfer or exchange shall
(if so required by the Company or the Securities Registrar) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.

         No service charge shall be made to a Holder for any transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or

                                       27

other governmental charge that may be imposed in connection with any transfer or
exchange of Securities, other than exchanges pursuant to Section 304, 906 or
1106.

         Notwithstanding any of the foregoing, any Global Security of a series
shall be exchangeable pursuant to this Section 305 for Securities registered in
the names of Persons other than the Depositary for such Security or its nominee
only if (i) such Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Security or if at any time such
Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, (ii) the Company executes and delivers to the
Trustee a Company Order that such Global Security shall be so exchangeable or
(iii) there shall have occurred and be continuing an Event of Default with
respect to the Securities of such series. Any Global Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
Securities registered in such names as such Depositary shall direct.

         Notwithstanding any other provision in this Indenture, a Global
Security may not be transferred except as a whole by the Depositary with respect
to such Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary.

         Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, transfer or exchange any Security of
any series during a period beginning at the opening of business 15 days before
the day of selection for redemption of Securities pursuant to Article Eleven and
ending at the close of business on the day of mailing of notice of redemption or
(b) to transfer or exchange any Security so selected for redemption in whole or
in part, except, in the case of any Security to be redeemed in part, any portion
thereof not to be redeemed.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

         If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Company or the Trustee to
save each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same issue
and series of like tenor and principal amount, having the same Original Issue
Date and Stated Maturity and bearing the same Interest Rate as such mutilated
Security, and bearing a number not contemporaneously outstanding.

         If there shall be delivered to the Company and to 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 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
issuing Company shall execute and upon its request the Trustee

                                       28

shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same issue and series of like tenor and
principal amount, having the same Original Issue Date and Stated Maturity and
bearing the same Interest Rate as such destroyed, lost or stolen Security, and
bearing a number not contemporaneously outstanding.

         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.

         Upon the issuance of any new Security under this Section, 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.

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

         The provisions of this Section are exclusive and shall 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 307. Payment of Interest; Interest Rights Preserved.

         Interest on any Security of any series which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date, shall 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 in respect of Securities of such series, except that, unless
otherwise provided in the Securities of such series, interest payable on the
Stated Maturity of a Security shall be paid to the Person to whom principal is
paid. The initial payment of interest on any Security of any series which is
issued between a Regular Record Date and the related Interest Payment Date shall
be payable as provided in such Security or in the Board Resolution pursuant to
Section 301 with respect to the related series of Securities.

         Any interest on any Security which is payable, but is not timely paid
or duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest"), shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted

                                       29

Interest may be paid by the Company, at its election in each case, as provided
in Clause (1) or (2) below:

         (1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first class, postage prepaid, to each Holder of a
Security of such series at the address of such Holder as it appears in the
Securities Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the Company,
cause a similar notice to be published at least once in a newspaper, customarily
published in the English language on each Business Day and of general
circulation in the [Borough of Manhattan, The City of New York], but such
publication shall not be a condition precedent to the establishment of such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered on such
Special Record Date and shall no longer be payable pursuant to the following
Clause (2).

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

         Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall

                                       30

carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.

SECTION 308. Persons Deemed Owners.

         The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and (subject
to Section 307) interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.

SECTION 309. Cancellation.

         All Securities surrendered for payment, redemption, transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall 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 all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities shall be destroyed by the Trustee and the Trustee shall deliver to
the Company a certificate of such destruction.

SECTION 310. Computation of Interest.

         Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months and interest on
the Securities of each series for any partial period shall be computed on the
basis of the number of days elapsed in a 360-day year of twelve 30-day months.

SECTION 311. Deferrals of Interest Payment Dates.

         If specified as contemplated by Section 301 with respect to the
Securities of a particular series, the Company shall have the right, at any time
during the term of such series, from time to time to extend the interest payment
period for such Securities for such period or periods as may be specified as
contemplated by Section 301 (each, an "Extension Period") during which periods
the Company shall have the right to make partial payments of interest on any
Interest Payment Date, and at the end of such Extension Period the Company shall
pay all interest then accrued and unpaid thereon (together with Additional
Interest thereon, if any, at the rate specified for the Securities of such
series to the extent permitted by applicable law), provided, however, that
during any

                                       31

such Extension Period, the Company shall not, and shall cause any Subsidiary not
to, (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
capital stock, or (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities that rank pari passu
with or junior in interest to the Securities of such series or make any
guarantee payments with respect to the foregoing (other than (a) dividends or
distributions in common stock of the Company, (b) redemptions or purchases of
any rights pursuant to the Company's Rights Plan, or any successor to such
Rights Plan, and the declaration of a dividend of such rights in the future, and
(c) payments under any Principal Guarantee). Prior to the termination of any
such Extension Period, the Company may further extend the interest payment
period, provided that such Extension Period together with all such previous and
further extensions of such Extension Period shall not exceed the period or
periods so specified or extend beyond the Maturity of such Securities. Upon
termination of any Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company may select a
new Extension Period, subject to the above requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof. The
Company shall give the Holders of the Securities of such series and the Trustee
notice of its selection of such Extension Period at least one Business Day prior
to the Interest Payment Date or, with respect to the Securities of a series
issued to a Principal Trust, prior to the earlier of (i) the date the
Distributions on the Preferred Securities of such Principal Trust are payable or
(ii) the date the Administrative Trustees of such Principal Trust are required
to give notice to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of such Preferred Securities of the
record date or the date such Distributions are payable, but in any event not
less than one Business Day prior to such record date.

         The Trustee shall promptly give notice of the Company's selection of
such Extension Period to the Holders of the outstanding Securities of such
series.

SECTION 312. Right of Set-Off.

         With respect to the Securities of a series issued to a Principal Trust,
notwithstanding anything to the contrary in the Indenture, the Company shall
have the right to set-off any payment it is otherwise required to make
thereunder in respect of any such Security to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Principal Guarantee relating to such Security or a payment to
any Holder of a corresponding series of Preferred Securities in connection with
a suit instituted pursuant to Section 508.

                                       32

SECTION 313. Agreed Tax Treatment.

         Each Security issued hereunder shall provide that the Company and, by
its acceptance of a Security or a beneficial interest therein, the Holder of,
and any Person that acquires a beneficial interest in, such Security agree that
for United States Federal, state and local tax purposes it is intended that such
Security constitute indebtedness.

SECTION 314. Extension of Stated Maturity; Adjustment of Stated Maturity Upon an
             Exchange.

         If specified as contemplated by Section 202 with respect to the
Securities of a particular series, the Company shall have the right to (a)
change the Maturity Date of the Securities of such series upon the liquidation
of a Principal Trust and the exchange of such Securities for the Preferred
Securities of such Principal Trust and (b) extend the Stated Maturity for the
Securities of such series; provided, that at time any election to extend the
Maturity Date is made and at the time of such extension, (i) the Company is not
in bankruptcy, otherwise insolvent or in liquidation, (ii) the Company is not in
default in the payment of any interest or principal on the Securities of such
series and no deferred interest payments thereon have accrued, (iii) the
applicable Principal Trust is not in arrears on payments of Distributions on its
Preferred Securities and no deferred Distributions thereon are accumulated, (iv)
the Securities are rated not less than [BBB- by Standard & Poor's Ratings
Services or Baa3 by Moody's Investors Service, Inc.] or the equivalent by any
other nationally recognized statistical rating organization and (v) the extended
Stated Maturity is no later than the 49th anniversary of the initial issuance of
the Preferred Securities of the applicable Principal Trust; provided, further,
that, if the Company exercises its right to liquidate the Principal Trust and
exchange the Securities of such series for the Preferred Securities of such
Principal Trust as specified in clause (a) above, any changed Stated Maturity of
the Securities of such series shall be no earlier than the date that is five
years after the issuance of the Preferred Securities and no later than the date
30 years (plus an extended term of up to an additional 19 years if the
above-referenced conditions are satisfied) after the date of the initial
issuance of the Preferred Securities of the applicable Principal Trust.

SECTION 315. CUSIP Numbers.

         The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to 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 shall not be affected
by any defect in or omission of such numbers.

                                       33

                                  ARTICLE FOUR

                           Satisfaction and Discharge

SECTION 401. Satisfaction and Discharge of Indenture.

         This Indenture shall cease to be of further effect (except as to (i)
any surviving rights of transfer, substitution and exchange of Securities, (ii)
rights hereunder of Holders to receive payments of principal of (and premium, if
any) and interest on the Securities and other rights, duties and obligations of
the Holders as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights and obligations of the Trustee
hereunder), and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when

         (1) either

                  (A) all Securities theretofore authenticated and delivered
         (other than (i) Securities which have been destroyed, lost or stolen
         and which have been replaced or paid as provided in Section 306 and
         (ii) Securities for whose payment 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 1003) have been delivered to the Trustee for cancellation; or

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

                           (i) have become due and payable, or

                           (ii) will become due and payable at their Stated
                  Maturity within one year of the date of deposit, and the
                  Company, in the case of (i) or (ii) above, has deposited or
                  caused to be deposited with the Trustee as trust funds in
                  trust for such purpose an amount in the currency or currencies
                  in which the Securities of such series are payable sufficient
                  to pay and discharge the entire indebtedness on such
                  Securities not theretofore delivered to the Trustee for
                  cancellation, for principal (and premium, if any) and interest
                  (including any Additional Interest) to the date of such
                  deposit (in the case of Securities which have become due and
                  payable) or to the Stated Maturity;

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

                                       34

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

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.

SECTION 402. Application of Trust Money.

         Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 or money or Government
Obligations deposited with the Trustee pursuant to Section 403, or received by
the Trustee in respect of Government Obligations deposited with the Trustee
pursuant to Section 403, shall 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 premium, if any) and interest for whose payment such money or
obligations have been deposited with or received by the Trustee; provided,
however, such moneys need not be segregated from other funds except to the
extent required by law.

SECTION 403. Satisfaction, Discharge and Defeasance of Securities of Any Series.

         Unless otherwise provided in the Board Resolution adopted pursuant to
Section 301 establishing the terms of the Securities of any series, the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
Outstanding Securities of any such series and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of such indebtedness, when

         (1) with respect to all Outstanding Securities of such series,

                  (A) the Company has irrevocably deposited or caused to be
         irrevocably deposited with the Trustee as trust funds in trust for such
         purpose an amount sufficient to pay and discharge the entire
         indebtedness on all Outstanding Securities of such series for principal
         (and premium, if any) and interest (including any Additional Interest)
         to the Stated Maturity or any Redemption Date as contemplated by the
         penultimate paragraph of this Section 403, as the case may be; or

                  (B) the Company has irrevocably deposited or caused to be
         irrevocably deposited with the Trustee as obligations in trust for such
         purpose an amount of

                                       35

         Government Obligations as will, in the written opinion of independent
         public accountants delivered to the Trustee, together with
         predetermined and certain income to accrue thereon, without
         consideration of any reinvestment thereof, be sufficient to pay and
         discharge when due the entire indebtedness on all Outstanding
         Securities of such series for principal (and premium, if any) and
         interest (including any Additional Interest) to the Stated Maturity or
         any Redemption Date as contemplated by the penultimate paragraph of
         this Section 403, as the case may be; and

         (2) the Company has paid or caused to be paid all other sums payable
with respect to the Outstanding Securities of such series; and

         (3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of the entire
indebtedness on all Outstanding Securities of any such series have been complied
with.

         Any deposits with the Trustee referred to in Section 403(i) above shall
be irrevocable and shall be made under the terms of an escrow trust agreement in
form and substance reasonably satisfactory to the Trustee. If any Outstanding
Securities of such series are to be redeemed prior to their Stated Maturity,
whether pursuant to any optional redemption provisions or in accordance with any
mandatory sinking fund requirement, the applicable escrow trust agreement shall
provide therefor and the Company shall make such arrangements as are
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company. If the Securities of
such series are not to become due and payable at their Stated Maturity or upon
call for redemption within one year of the date of deposit, then the Company
shall give, not later than the date of such deposit, notice of such deposit to
the Holders of Securities of such series.

         Upon the satisfaction of the conditions set forth in this Section 403
with respect to all the Outstanding Securities of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; provided, that the Company shall not be discharged
from any payment obligations in respect of Securities of such series which are
deemed not to be Outstanding under clause (iii) of the definition thereof if
such obligations continue to be valid obligations of the Company under
applicable law.

                                       36

                                  ARTICLE FIVE

                                    Remedies

SECTION 501. Events of Default.

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

         (1) default in the payment of any interest upon any Security of that
series, including any Additional Interest in respect thereof, when it becomes
due and payable, and continuance of such default for a period of 30 days
(subject to the deferral of any due date in the case of an Extension Period); or

         (2) default in the payment of the principal of (or premium, if any, on)
any Security of that series at its Maturity; or

         (3) 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
whose performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of 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; or

         (4) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company 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 unstayed and in effect for a period of 60 consecutive days; or

         (5) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition

                                       37

or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, 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 and its willingness to be adjudicated a bankrupt, or the taking
of corporate action by the Company in furtherance of any such action; or

         (6) any other Event of Default with respect to Securities of that
series.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

         If an Event of Default (other than an Event of Default specified in
Section 501(4) or 501(5)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such 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 the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
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), provided that,
in the case of the Securities of a series issued to a Principal Trust, if upon
an Event of Default, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of that series fail to declare
the principal of all the Securities of that series to be immediately due and
payable, the holders of at least 25% in aggregate liquidation amount of the
corresponding series of Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee; and upon any such
declaration such principal amount (or specified amount) of and the accrued
interest (including any Additional Interest) on all the Securities of such
series shall become immediately due and payable, provided that the payment of
principal and interest (including any Additional Interest) on such Securities
shall remain subordinated to the extent provided in Article Thirteen. If an
Event of Default specified in Section 501(4) or 501(5) with respect to
Securities at the time Outstanding occurs, the principal amount on all the
Securities shall automatically, and without any declaration or other action on
the part of the Trustee or any Holder, become immediately due and payable.

         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 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:

         (1) the Company has paid or deposited with the Trustee a sum sufficient
to pay

                                       38

                  (A) all overdue installments of interest (including any
         Additional 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 interest thereon at the rate borne by the
         Securities,

                  (C) to the extent that payment of such interest is lawful,
         interest upon overdue installments of interest at the rate borne by the
         Securities, and

                  (D) all sums paid or advanced by the Trustee hereunder and the
         reasonable compensation, expenses, disbursements and advances of the
         Trustee, its agents and counsel; and

         (2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series which
has become due solely by such acceleration, have been cured or waived as
provided in Section 513.

         No such rescission shall affect any subsequent default or impair any
right consequent thereon.

         Upon receipt by the Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Securities of
a series all or part of which is represented by a Global Security, a record date
shall be established for determining Holders of Outstanding Securities of such
series entitled to join in such notice, which record date shall be at the close
of business on the day the Trustee receives such notice. The Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such notice, whether or not such Holders remain Holders
after such record date; provided, that, unless such declaration of acceleration,
or rescission and annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice prior to the day
which is 90 days after such record date, such notice of declaration of
acceleration, or rescission and annulment, as the case may be, shall
automatically and without further action by any Holder be canceled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 502.

                                       39

SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

         The Company covenants that if:

         (1) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security when such interest becomes
due and payable and such default continues for a period of 30 days, or

         (2) default is made in the payment of the principal of (and premium, if
any, on) any Security at the Maturity thereof,

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, including any sinking fund payment or analogous
obligations (and premium, if any) and interest (including any Additional
Interest), including, to the extent that payment of such interest shall be
lawful, interest on any overdue principal (and premium if any) and on any
overdue installments of interest (including any Additional Interest) at the rate
borne by the Securities; and, in addition thereto, all amounts owing the Trustee
under Section 607.

         If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.

         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.

SECTION 504. Trustee May File Proofs of Claim.

         In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors,

                                       40

         (a) the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal (and
premium, if any) or interest (including any Additional Interest)) shall be
entitled and empowered, by intervention in such proceeding or otherwise,

                  (i) to file and prove a claim for the whole amount of
         principal (and premium, if any) and interest (including any Additional
         Interest) owing and unpaid in respect to the Securities and to file
         such other papers or documents as may be necessary or advisable and to
         take any and all actions as are authorized under the Trust Indenture
         Act in order to have the claims of the Holders and any predecessor to
         the Trustee under Section 607 and of the Holders allowed in any such
         judicial proceedings; and

                  (ii) and in particular, the Trustee shall be authorized to
         collect and receive any moneys or other property payable or deliverable
         on any such claims and to distribute the same in accordance with
         Section 506; and

         (b) 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 for
distribution in accordance with Section 506, 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 and any predecessor Trustee under Section 607.

         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.

SECTION 505. Trustee May Enforce Claim Without Possession of Securities.

         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 shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of all the amounts owing the Trustee and any
predecessor Trustee under Section 607, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

                                       41

SECTION 506. Application of Money Collected.

         Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal (or premium,
if any) or interest (including any Additional 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 and any
predecessor Trustee under Section 607;

         SECOND: To the payment of the amounts then due and unpaid upon such
series of Securities for principal (and premium, if any) and interest (including
any Additional Interest), 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 series of Securities for
principal (and premium, if any) and interest (including any Additional
Interest), respectively; and

         THIRD: The balance, if any, to the Person or Persons entitled thereto.

SECTION 507. Limitation on Suits.

         No Holder of any Securities of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture
or for the appointment of a receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) or for any other remedy hereunder,
unless:

         (1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;

         (2) 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;

         (3) 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;

         (4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and

         (5) 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;

                                       42

it being understood and intended that no one or more of such Holders shall 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
Holders of Securities, 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 such Holders.

SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
             Interest.

         Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right which is absolute and unconditional to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest (including any Additional Interest) on such Security on the respective
Stated Maturities expressed in such Security and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder. In the case of Securities of a series issued to a
Principal Trust, any holder of the corresponding series of Preferred Securities
shall have the right upon the occurrence of an Event of Default described in
Section 501(1) or 501(2) hereof, to institute a suit directly against the
Company for enforcement of payment to such Holder of principal of (premium, if
any) and (subject to Section 307) interest (including any Additional Interest)
on the Securities having a principal amount equal to the aggregate liquidation
preference of the Preferred Securities of the corresponding series held by such
Holder.

SECTION 509. 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 the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.

SECTION 510. Rights and Remedies Cumulative.

         Except as otherwise provided in the last paragraph of Section 306, 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 shall, 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, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

                                       43

SECTION 511. Delay or Omission Not Waiver.

         Except as otherwise provided in the last paragraph of Section 306, no
delay or omission of the Trustee or of any Holder of any Security to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein.

         Every right and remedy given by this Article or by law to the Trustee
or to 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 512. Control by Holders.

         The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:

         (1) such direction shall not be in conflict with any rule of law or
with this Indenture,

         (2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and

         (3) subject to the provisions of Section 601, the Trustee shall have
the right to decline to follow such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that the
proceeding so directed would be unjustly prejudicial to the Holders not joining
in any such direction or would involve the Trustee in personal liability.

         Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that, unless the Holders of a majority in principal amount of the
Outstanding Securities of such series shall have joined in such notice prior to
the day which is 90 days after such record date, such notice shall automatically
and without further action by any Holder be canceled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new notice identical to a
notice which has been canceled pursuant to the proviso to the preceding
sentence, in

                                       44

which event a new record date shall be established pursuant to the provisions of
this Section 512.

SECTION 513.      Waiver of Past Defaults.

         The Holders of not less than 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:

         (1) in the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on any Security of such series, or

         (2) in respect of a covenant or provision hereof which under Article
Nine 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 shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

SECTION 514.      Undertaking for Costs.

         All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest (including any
Additional Interest) on any Security on or after the respective Stated
Maturities expressed in such Security.

SECTION 515.      Waiver of Stay or Extension Laws.

         The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in

                                       45

force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.

                                   ARTICLE SIX

                                   THE TRUSTEE

SECTION 601.      Certain Duties and Responsibilities.

         (a) Except during the continuance of an Event of Default,

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

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

         (b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.

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

         (1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;

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

         (3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
Holders pursuant to

                                       46

Section 512 relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture with respect to the Securities
of such series.

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

         (e) 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 shall be subject to the provisions of this
Section.

SECTION 602. Notice of Defaults.

         Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default hereunder known to the Trustee, unless such
default shall have been cured or waived; provided, however, that, except in the
case of a default in the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on any Security of such series, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of Securities of
such series; and provided, further, that, in the case of any default of the
character specified in Section 501(3), no such notice to Holders of Securities
of such series shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.

SECTION 603. Certain Rights of Trustee.

         Subject to the provisions of Section 601:

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

                                       47

         (b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may 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 Officers' Certificate;

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

         (e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
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 shall 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, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and

         (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 shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.

SECTION 604. Not Responsible for Recitals or Issuance of Securities.

         The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of the Securities or the proceeds thereof.

                                       48

SECTION 605. May Hold Securities.

         The Trustee, any Paying Agent, Securities 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 608 and 613, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Securities Registrar or such other agent.

SECTION 606. Money Held in Trust.

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

SECTION 607. Compensation and Reimbursement.

         The Company agrees

         (1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder in such amounts as the Company and the
Trustee shall agree from time to time (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);

         (2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and

         (3) to indemnify the Trustee (including in its individual capacity) and
its officers, directors and employees for, and to hold each harmless against,
any loss, liability or expense (including the reasonable compensation and the
expenses and disbursements of its agents and counsel) incurred without
negligence or bad faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties 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. This indemnification shall survive the termination of this
Agreement.

         To secure the Company's payment obligations in this Section, the
Company and the Holders agree that the Trustee shall have a lien prior to the
Securities on all money or property held or collected by the Trustee. Such lien
shall survive the satisfaction and discharge of this Indenture.

                                       49

         When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 501(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Reform Act of 1978 or a successor statute.

SECTION 608. Disqualification; Conflicting Interests.

         The Trustee for the Securities of any series issued hereunder shall be
subject to the provisions of Section 310(b) of the Trust Indenture Act. Nothing
herein shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of Section 310(b) of the Trust
Indenture Act.

SECTION 609. Corporate Trustee Required; Eligibility.

         There shall at all times be a Trustee hereunder which shall be

         (a) a corporation organized and doing business under the laws of the
United States of America or of any State, Territory or the District of Columbia,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority, or

         (b) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Trustee pursuant to
a rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees,

in either case having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article. Neither the Company nor any Person directly or indirectly
controlling, controlled by or under common control with the Company shall serve
as Trustee for the Securities of any series issued hereunder.

                                       50

SECTION 610. Resignation and Removal; Appointment of Successor.

         (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.

         (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 an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition 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.

         (d) If at any time:

         (1) the Trustee shall fail to comply with Section 608 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, or

         (2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or

         (3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,

then, in any such case, (i) the Company by Board Resolution may remove the
Trustee, or (ii) subject to Section 514, 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 and the appointment of a successor Trustee.

         (e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of that or those series. 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 shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series

                                       51

delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the successor Trustee with respect to the Securities of such series and
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
hereinafter provided, any Holder who has been a bona fide Holder of a Security
for at least six months may, subject to Section 514, 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 shall 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 by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Securities Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.

SECTION 611.      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 shall
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 shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall 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 shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor 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 (if requested by the Company) and each successor Trustee with
respect to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall 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, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to

                                       52

the Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall 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
shall 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 shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (a) or (b) of this Section, as the case may be.

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

SECTION 612. 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 shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, 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, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.

                                       53

SECTION 613. Preferential Collection of Claims Against Company.

         If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

SECTION 614. Appointment of Authenticating Agent.

         The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall 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,
and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall 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 shall be deemed to include
authentication and delivery 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, or of any State, Territory 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 the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.

         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
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.

         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

                                       54

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 of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall give notice of such appointment in the manner provided in
Section 106 to all Holders of Securities of the series with respect to which
such Authenticating Agent will serve. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall 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
shall be appointed unless eligible under the provision of this Section.

         The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.

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

                                       55

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

                                             -----------------------------------
                                             As Trustee

                                             By:
                                                  ------------------------------
                                                  As Authenticating Agent

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

                                 ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. 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 days after February 15 and August
15, a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such February 1 and August 1, and

         (b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished, excluding from any such list names and addresses received by the
Trustee in its capacity as Securities Registrar.

SECTION 702.      Preservation of Information, Communications to Holders.

         (a) The Trustee shall 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 701 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.

         (b) The rights of 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, shall be as provided in 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

                                       56

agent of either of them shall be held accountable by reason of the disclosure of
information as to the names and addresses of the Holders made pursuant to the
Trust Indenture Act.

SECTION 703. Reports by Trustee.

         (a) The Trustee shall 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 pursuant thereto.

         (b) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than July 15 in each calendar
year, commencing with the first July 15 after the first issuance of Securities
under this Indenture.

         (c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed and also with the Commission. The Company will notify the
Trustee whenever the Securities are listed on any stock exchange.

SECTION 704. Reports by Company.

         The Company shall

         (1) file with the Trustee and with 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 in the Trust Indenture Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
shall be filed with the Trustee within 15 days after the same is required to be
filed with the Commission. Notwithstanding that the Company may not be required
to remain subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations;

         (2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and

                                       57

         (3) transmit by mail, to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to Clauses (1) and (2) of this Section as
may be required by rules and regulations prescribed from time to time by the
Commission.

                                 ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.

         The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, and no Person shall consolidate with or merge into
the Company or convey, transfer or lease its properties and assets substantially
as an entirety to the Company, unless:

         (1) in case the Company shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the corporation formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation organized and existing under
the laws of the United States of America or any State or the District of
Columbia, and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of (and premium, if any) and interest
(including any Additional Interest) on all the Securities and the performance of
every covenant of this Indenture on the part of the Company to be performed or
observed;

         (2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;

         (3) in the case of the Securities of a series issued to a Principal
Trust, such consolidation, merger, conveyance, transfer or lease is permitted
under the related Trust Agreement and Principal Guarantee and does not give rise
to any breach or violation of the related Trust Agreement or Principal
Guarantee; and

         (4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance, transfer or lease and any such supplemental indenture complies with
this Article and that all

                                       58

conditions precedent herein provided for relating to such transaction have been
complied with; and the Trustee, subject to Section 601, may rely upon such
Officers' Certificate and opinion of Counsel as conclusive evidence that such
transaction complies with this Section 801.

SECTION 802. Successor Corporation Substituted.

         Upon any consolidation or merger by the Company with or into any other
corporation, or any conveyance, transfer or lease by the Company of its
properties and assets substantially as an entirety to any Person in accordance
with Section 801, the successor corporation formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor corporation had been named as the Company herein; and in the event of
any such conveyance, transfer or lease the Company shall be discharged from all
obligations and covenants under the Indenture and the Securities and may be
dissolved and liquidated.

         Such successor corporation may cause to be signed, and may issue either
in its own name or in the name of the Company, any or all of the Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee on its behalf for the purpose
pursuant to such provisions. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.

         In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.

                                       59

                                  ARTICLE NINE

                             Supplemental Indentures

SECTION 901. Supplemental Indentures Without Consent of Holders.

      Without the consent of 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 or, if applicable, into
agreements supplemental to any PFSI Guarantee, in form satisfactory to the
Trustee, for any of the following purposes:

      (1) 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 or, if applicable, to evidence the succession of another Person
to the Guarantor and the assumption by any such successor of the Guarantor's
obligations under any PFSI Guarantee (in either case with such changes herein
and therein as may be necessary or advisable to reflect such Person's legal
status, if such Person is not a corporation); or

      (2) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or to surrender any right or power herein conferred upon the
Company; or

      (3) to establish the form or terms of Securities of any series as
permitted by Sections 201 or 301; or

      (4) to add to the covenants of the Company or the Guarantor for the
benefit of the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the Company or
the Guarnator; or

      (5) to add any additional Events of Default; or

      (6) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or

      (7) to cure any ambiguity, to correct or supplement any provision herein,
in any Securities or in any PFSI Guarantee, which may be 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 (7) shall not materially adversely affect the interest of the
Holders of Securities of any series or, in the case of the Securities of a
series issued to a Principal Trust and for so long as any of the corresponding
series of Preferred Securities shall remain outstanding, the holders of such
Preferred Securities; or

      (8) 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

                                       60

change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 611(b); or

      (9) to comply with the requirements of the Commission in order to effect
or maintain the qualification of this Indenture or any PFSI Guarantee under the
Trust Indenture Act or otherwise as necessary to comply with applicable law.

SECTION 902. Supplemental Indentures with Consent of Holders.

      With the consent of the Holders of not less than 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 and, if applicable,
the Guarantor and the Trustee may enter into an agreement or agreements
supplemental hereto to add to or to change or eliminate any provisions of a PFSI
Guarantee; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby,

      (1) except to the extent permitted by Section 311 or as otherwise
specified as contemplated by Section 301 with respect to the extension of the
interest payment period of the Securities of any series, change the Stated
Maturity of the principal of, or any installment of interest (including any
Additional Interest) on, any Security, or reduce the principal amount thereof or
the rate of interest thereon or reduce any premium payable upon the redemption
thereof, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502, or change the place of payment where,
or the coin or currency in which, any Security 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 date fixed for redemption thereof), or

      (2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders 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

      (3) modify any of the provisions of this Section, Section 513 or Section
1006, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Security affected thereby; or

                                       61

      (4) modify the provisions in Article Thirteen of this Indenture with
respect to the subordination of Outstanding Securities of any series in a manner
adverse to the Holders thereof;

provided that, in the case of the Securities of a series issued to a Principal
Trust, so long as any of the corresponding series of Preferred Securities
remains outstanding, no such amendment shall be made that adversely affects the
holders of such Preferred Securities, and no termination of this Indenture shall
occur, and no waiver of any Event of Default or compliance with any covenant
under this Indenture shall be effective, without the prior consent of the
holders of at least a majority of the aggregate liquidation preference of such
Preferred Securities then outstanding unless and until the principal (and
premium, if any) of the Securities of such series and all accrued and unpaid
interest (including any Additional Interest) thereon have been paid in full; and
provided further that in the case of the Securities of a series issued to a
Principal Trust, so long as any of the corresponding series of Preferred
Securities remain outstanding, no amendment shall be made to Section 508 of this
Indenture without the prior consent of the holders of each Preferred Security
then outstanding unless and until the principal (and premium, if any) of the
Securities of such series and all accrued and (subject to Section 307) unpaid
interest (including any Additional Interest) thereon have been paid in full.

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

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

SECTION 903. Execution of Supplemental Indentures.

      In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture, and
that all conditions precedent have been complied with. The Trustee may, but
shall 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.

                                       62

SECTION 904. Effect of Supplemental Indentures.

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

SECTION 905. Conformity with Trust Indenture Act.

      Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.

SECTION 906. Reference in Securities to Supplemental Indentures.

      Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall 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 Board of Directors, 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 TEN

                                    Covenants

SECTION 1001. Payment of Principal, Premium and Interest.

      The Company covenants and agrees for the benefit of each series of
securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of such Securities and this Indenture.

SECTION 1002. Maintenance of Office or Agency.

      The Company will maintain in each Place of Payment for any series, an
office or agency where Securities of that series may be presented or surrendered
for payment and an office or agency where Securities may be surrendered for
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company
initially appoints the Trustee, acting through its Corporate Trust Office, as
its agent for said purposes. The Company will give prompt written notice to the
Trustee of any change in the location of any such office or agency. If at any
time the Company shall fail to maintain such office or agency or shall fail to

                                       63

furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.

      The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
of such purposes, and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall 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 and any change in
the location of any such office or agency.

SECTION 1003. Money for Security Payments to be Held in Trust.

      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 (and premium, if any) or interest on any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or 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
failure so to act.

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

      The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:

      (1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;

      (2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal (and
premium, if any) or interest;

                                       64

      (3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and

      (4) comply with the provisions of the Trust Indenture Act applicable to it
as a Paying Agent.

      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 the Company or any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.

      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 (and premium, if any)
or interest on any Security and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall
(unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be paid on Company Request to the Company,
or (if then held by the Company) shall (unless otherwise required by mandatory
provision of applicable escheat or abandoned or unclaimed property law) be
discharged from such trust; and the Holder of such Security shall 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, shall 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 shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid the Company.

SECTION 1004. 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, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or property of the Company or any
Restricted Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Restricted Subsidiary; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any

                                       65

such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.

SECTION 1005. Statement as to Compliance.

      The Company shall deliver to the Trustee, within 120 days after the end of
each calendar year of the Company ending after the date hereof, an Officers'
Certificate covering the preceding fiscal year, stating whether or not to the
best knowledge of the signers thereof the Company is in default in the
performance, observance or fulfillment of or compliance with any of the terms,
provisions, covenants and conditions of this Indenture, and if the Company shall
be in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge. For the purpose of this Section 1005, compliance
shall be determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture.

SECTION 1006. Waiver of Certain Covenants.

      The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 1004 or as specified as contemplated
by Section 301 with respect to the Securities of any series, if before or after
the time for such compliance the Holders of at least 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 covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company in
respect of any such covenant or condition shall remain in full force and effect.

SECTION 1007. Additional Sums.

      In the case of the Securities of a series issued to a Principal Trust,
except as otherwise specified as contemplated by Section 301, in the event that
(i) a Principal Trust is the Holder of all of the Outstanding Securities of such
series, (ii) a Tax Event in respect of such Principal Trust shall have occurred
and be continuing and (iii) the Company shall not have (i) redeemed the
Securities of such series pursuant to Section 1107(b) or (ii) terminated such
Principal Trust pursuant to section 902(b) of the related Trust Agreement, the
Company shall pay to such Principal Trust (and its permitted successors or
assigns under the related Trust Agreement) for so long as such Principal Trust
(or its permitted successor or assignee) is the registered holder of any
Securities of such series, such additional amounts as may be necessary in order
that the amount of distributions (including any Additional Amounts (as defined
in the Trust Agreement)) then due and payable by such Principal Trust on the
related Preferred Securities and Common Securities that at any time remain
outstanding in accordance with the terms thereof shall not be reduced as a
result of any Additional Taxes (the "Additional Sums"); provided

                                       66

that, if this Indenture has not been qualified under the Trust Indenture Act,
the Company shall be required to pay such Additional Sums until this Indenture
is so qualified. Whenever in this Indenture or the Securities there is a
reference in any context to the payment of principal of or interest on the
Securities, such mention shall be deemed to include mention of the payments of
the Additional Sums provided for in this paragraph to the extent that, in such
context, Additional Sums are, were or would be payable in respect thereof
pursuant to the provisions of this paragraph and express mention of the payment
of Additional Sums (if applicable) in any provisions hereof shall not be
construed as excluding Additional Sums in those provisions hereof where such
express mention is not made, provided, however, that the extension of an
interest payment period pursuant to Section 311 of the Securities shall not
extend the payment of any Additional Sums that may be due and payable during
such interest payment period.

SECTION 1008. Additional Covenants.

      The Company covenants and agrees with each Holder of Securities of a
series issued to a Principal Trust that it will not, and it will not permit any
Subsidiary of the Company to, (a) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any shares of the Company's capital stock, or (b) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities that rank pari passu with or junior to the Securities of such series
or make any guarantee payments with respect to the foregoing (other than (a)
dividends or distributions in common stock of the Company, (b) redemptions or
purchases of any rights pursuant to the Company's Rights Plan, or any successor
to such Rights Plan, and the declaration of a dividend of such rights in the
future, and (c) payments under any Principal Guarantee) if at such time (i)
there shall have occurred any event of which the Company has actual knowledge
that (a) with the giving of notice or the lapse of time or both, would
constitute an Event of Default hereunder and (b) in respect of which the Company
shall not have taken reasonable steps to cure, (ii) the Company shall be in
default with respect to its payment of any obligations under the related
Principal Guarantee or (iii) the Company shall have given notice of its
selection of an Extension Period as provided herein and shall not have rescinded
such notice, or such period, or any extension thereof, shall be continuing.

      The Company also covenants with each Holder of Securities of a series
issued to a Principal Trust (i) to maintain directly or indirectly 100%
ownership of the Common Securities of such Principal Trust; provided, however,
that any permitted successor of the Company hereunder may succeed to the
Company's ownership of such Common Securities, (ii) not to voluntarily
terminate, wind-up or liquidate such Principal Trust, except (a) in connection
with a distribution of the Securities of such series to the holders of Preferred
Securities in liquidation of such Principal Trust or (b) in connection with
certain mergers, consolidations or amalgamations permitted by the related Trust
Agreement and (iii) to use its reasonable efforts, consistent with the terms and
provisions

                                       67

of such Trust Agreement, to cause such Principal Trust to remain a business
trust and not to be classified as an association taxable as a corporation for
United States federal income tax purposes.

                                 ARTICLE ELEVEN

                            Redemption of Securities

SECTION 1101. Applicability of This Article.

      Redemption of Securities (whether by operation of a sinking fund or
otherwise) as permitted or required by any form of Security issued pursuant to
this Indenture shall be made in accordance with such form of Security and this
Article; provided, however, that if any provision of any such form of Security
shall conflict with any provision of this Article, the provision of such form of
Security shall govern. Except as otherwise set forth in the form of Security for
such series, each Security shall be subject to partial redemption only in the
amount of $25 or, in the case of the Securities of a series issued to a
Principal Trust, $25, or integral multiples thereof.

SECTION 1102. Election to Redeem; Notice to Trustee.

      The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election of
the Company of less than all of the Securities of any particular series and
having the same terms, the Company shall, not less than 30 nor more than 60 days
prior to the date fixed for redemption (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such date and of the
principal amount of Securities of that 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, the Company shall furnish
the Trustee with an Officers' Certificate and an Opinion of Counsel evidencing
compliance with such restriction.

SECTION 1103. Selection of Securities to be Redeemed.

      If less than all the Securities of a particular series and having the same
terms are to be redeemed, the Trustee shall select, not more than 60 days prior
to the date fixed for redemption, in such manner as in its sole discretion it
shall deem appropriate and fair, the Securities or portions thereof of such
series to be redeemed. The Trustee shall promptly notify the Company in writing
of the Securities selected for partial redemption and the principal amount
thereof to be redeemed. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security which has been or
is to be redeemed. If the

                                       68

Company shall so direct, Securities registered in the name of the Company, any
Affiliate or any Subsidiary thereof shall not be included in the Securities
selected for redemption.

SECTION 1104. Notice of Redemption.

      Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not later than the thirtieth day, and not earlier than the sixtieth day,
prior to the date fixed for redemption, to each Holder of Securities to be
redeemed, at the address of such Holder as it appears in the Securities
Register.

      With respect to Securities of each series to be redeemed, each notice of
redemption shall state:

      (a) the date fixed for redemption for Securities of such series;

      (b) the redemption price at which Securities of such series are to be
redeemed;

      (c) if less than all Outstanding Securities of such particular series and
having the same terms are to be redeemed, the identification (and, in the case
of partial redemption, the respective principal amounts) of the particular
Securities to be redeemed;

      (d) that on the date fixed for redemption, the redemption price at which
such Securities are to be redeemed will become due and payable upon each such
Security or portion thereof, and that interest thereon, if any, shall cease to
accrue on and after said date;

      (e) the place or places where such Securities are to be surrendered for
payment of the redemption price at which such Securities are to be redeemed; and

      (f) that the redemption is for a sinking fund, if such is the case.

      Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company. The notice if mailed in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives such notice. In any case, a failure to
give such notice by mail or any defect in the notice to the Holder of any
Security designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Security.

SECTION 1105.     Deposit of Redemption Price.

      Prior to the redemption date specified in the notice of redemption given
as provided in Section 1104, the Company will deposit with the Trustee or with
one or more

                                       69

paying agents an amount of money sufficient to redeem on the redemption date all
the Securities so called for redemption at the applicable redemption price.

SECTION 1106. Payment of Securities Called for Redemption.

      If any notice of redemption has been given as provided in Section 1104,
the Securities or portion of Securities with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable redemption price. On presentation and
surrender of such Securities at a place of payment in said notice specified, the
said securities or the specified portions thereof shall be paid and redeemed by
the Company at the applicable redemption price.

      Upon presentation of any Security redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder thereof, at
the expense of the Company, a new Security or Securities of the same series, of
authorized denominations, in aggregate principal amount equal to the unredeemed
portion of the Security so presented and having the same Original Issue Date,
Stated Maturity and terms. If a Global Security is so surrendered, such new
Security will also be a new Global Security.

SECTION 1107. Company's Right of Redemption.

      (a) Unless otherwise specified as contemplated by Section 301 with respect
to the Securities of a particular series and notwithstanding any additional
redemption rights that may be so specified, the Company may, at its option,
redeem the Securities of any series after their date of issuance in whole or in
part at any time and from time to time, subject to the provisions of this clause
(a) and the other provisions of this Article Eleven. Unless otherwise specified
as contemplated by Section 301 with respect to the Securities of a particular
series, the redemption price for any Security so redeemed pursuant to this
clause (a) shall equal any accrued and unpaid interest, including any Additional
Interest, to the date fixed for redemption, plus the greater of (a) the
principal amount thereof and (b) an amount equal to (i) in respect of the
Securities of any series bearing interest at a fixed rate, the Discounted
Remaining Fixed Amount Payments or (ii) in respect of the Securities of any
series bearing interest determined by reference to a floating rate, the
Discounted Swap Equivalent Payments. The Company shall not redeem the Securities
in part unless all accrued and unpaid interest (including any Additional
Interest) has been paid in full on all Securities Outstanding for all interest
periods terminating on or prior to the date fixed for redemption. For purposes
of this clause (a), the following terms shall have the meanings set forth below:

      "Discounted Remaining Fixed Amount Payments" means, in respect of a
Security of any series bearing interest at a fixed rate, an amount equal to the
sum of the Current Values of the amounts of interest and principal that would
have been payable by the

                                       70

Company pursuant to the terms of such Security on each Interest Payment Date
after the date fixed for redemption pursuant to this Section 1107 and at the
Stated Maturity of the final payment of principal thereof (taking into account
any required sinking fund payments but otherwise assuming that the Company had
not redeemed such Security prior to such Stated Maturity).

      "Current Value" means, in respect of any amount, the present value of that
amount on the date fixed for redemption pursuant to this Section 1107 after
discounting that amount on a basis corresponding to the interest period of the
Securities to be redeemed from the originally scheduled date for payment on the
basis of the Treasury Rate, all computed in accordance with generally accepted
financial practice.

      "Treasury Rate" means a per annum rate (expressed as a decimal and, in the
case of United States Treasury bills, converted to a per annum yield) determined
on the date fixed for redemption pursuant to this Section 1107 to be the per
annum rate equal to the semiannual bond equivalent yield to maturity adjusted,
in the case of Securities having monthly or quarterly Interest Payment Dates, to
reflect monthly or quarterly compounding in accordance with generally accepted
financial practice for United States Treasury securities maturing at the Stated
Maturity of the final payment of principal of any series of Securities redeemed
pursuant to this Section 1107, as determined (i) by reference to the weekly
average yield to maturity for United States Treasury securities maturing on such
Stated Maturity as reported in the most recent Statistical Release H.15(519) of
the Board of Governors of the Federal Reserve, or (ii) if no such weekly average
yield is so reported, by interpolation between the most recent weekly average
yields to maturity for two series of United States Treasury securities, (a) one
maturing as close as possible to, but earlier than, such Stated Maturity and (b)
the other maturing as close as possible to, but later than, such Stated
Maturity, in each case as published in the most recent Statistical Release
H.15(519) of the Board of Governors of the Federal Reserve.

      "Discounted Swap Equivalent Payments" means, in respect of a Security of
any series bearing interest determined by reference to a floating rate, an
amount equal to the sum of (i) the Current Value of the amount of principal that
would have been payable by the Company pursuant to the terms of such Security at
the Stated Maturity of the final payment of the principal thereof (taking into
effect any required sinking fund payments but otherwise assuming that the
Company had not redeemed such Security prior to such Stated Maturity) and (ii)
the sum of the Current Values of the fixed rate payments that Reference
Market-Makers would require to be paid by an assumed fixed rate payer having the
same credit standing as the Company against floating rate payments to be made by
such Reference Market-Makers equal to the interest payments on the Security
being redeemed (taking into effect any required sinking fund payments but
otherwise assuming the Company had not redeemed such Security prior to such
Stated Maturity) under an interest rate swap agreement documented under standard
forms of the

                                       71

International Swap Dealers Association, Inc., and having a notional principal
amount equal to the principal amount of such Security, a termination date set at
the Stated Maturity of such Security and payment dates for both fixed and
floating rate payers set at each Interest Payment Date of such Security. The
Trustee (or its agent) will request each Reference Market-Maker to provide its
quotation of such fixed rate payments to the extent practicable as of the same
time (without regard to different time zones) on a date that is no more than
five Business Days prior to the date on which the notice of redemption required
by Section 1104 is first mailed to the Holders of the Securities being redeemed.
If more than three such quotations are provided, the fixed rate payments will be
the arithmetic mean of the dollar equivalent of such quotations without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the fixed rate payments will be the quotation remaining
after disregarding the quotations having the highest and lowest values.

      "Reference Market-Makers" means four leading dealers in the market for
interest rate swaps selected by the Trustee (or its agent) in good faith from
among dealers of the highest credit standing which satisfy all the criteria that
the Trustee (or its agent) applies generally at the time in deciding whether to
offer or to make an extension of credit or, if quotations from four such leading
dealers are not reasonably obtainable, three such leading dealers.

      (b) In the case of the Securities of a series issued to a Principal Trust,
except as otherwise specified as contemplated by Section 301, if a Special Event
in respect of such Principal Trust shall occur and be continuing, the Company
may, at its option, redeem the Securities of such series, in whole but not in
part, subject to the provisions of this clause (b) and the other provisions of
this Article Eleven. The redemption price for any Security so redeemed pursuant
to this clause (b) shall be equal to 100% of the principal amount of such
Securities then Outstanding plus accrued and unpaid interest, including any
Additional Interest, to the date fixed for redemption.

      Notwithstanding any other provision of this Article 11, installments of
accrued and unpaid interest whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holders of the series of Securities to be
redeemed, or one or more Predecessor Securities, registered as such at the close
of business on the relevant Regular Record Dates according to their terms and
the provisions of Section 307.

                                       72

                                 ARTICLE TWELVE

                           Subordination of Securities

SECTION 1201. Securities Subordinate to Senior Debt.

      The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the payment of the principal
of (and premium, if any) and interest (including any Additional Interest) on
each and all of the Securities are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all amounts then due and
payable in respect of all Senior Debt.

SECTION 1202. Payment Over of Proceeds Upon Dissolution, Etc.

      In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company (each such event, if any, herein
sometimes referred to as a "Proceeding"), then the holders of Senior Debt shall
be entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt, or provision shall be made for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, before the Holders of the Securities are entitled to
receive or retain any payment or distribution of any kind or character, whether
in cash, property or securities (including any payment or distribution which may
be payable or deliverable by reason of the payment of any other Debt of the
Company (including any series of the Securities) subordinated to the payment of
the Securities, such payment or distribution being hereinafter referred to as a
"Junior Subordinated Payment"), on account of principal of (or premium, if any)
or interest (including any Additional Interest) on the Securities or on account
of the purchase or other acquisition of Securities by the Company or any
Subsidiary and to that end the holders of Senior Debt shall be entitled to
receive, for application to the payment thereof, any payment or distribution of
any kind of character, whether in cash, property or securities, including any
Junior Subordinated Payment, which may be payable or deliverable in respect of
the Securities in any such Proceeding.

      In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, before all Senior Debt is paid in full or payment thereof is provided
for in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, and if such fact shall, at or prior to the time of such
payment or distribution, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment or distribution shall be
paid over or

                                       73

delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior Debt
remaining unpaid, to the extent necessary to pay all Senior Debt in full, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt.

      For purposes of this Article only, the words "any payment or distribution
of any kind or character, whether in cash, property or securities" shall not be
deemed to include shares of stock of the Company as reorganized or readjusted,
or securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment which securities are subordinated in right of
payment to all then outstanding Senior Debt to substantially the same extent as
the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a Proceeding for the purposes of this Section if the Person formed by
such consolidation or into which the Company is merged or the Person which
acquires by sale such properties and assets as an entirety, as the case may be,
shall, as a part of such consolidation, merger, or sale comply with the
conditions set forth in Article Eight.

SECTION 1203. Prior Payment to Senior Debt Upon Acceleration of Securities.

      In the event that any Securities are declared due and payable before their
Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Debt (including any amounts due upon acceleration), or provision shall be
made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the Securities
are entitled to receive any payment or distribution of any kind or character,
whether in cash, properties or securities (including any Junior Subordinated
Payment) by the Company on account of the principal of (or premium, if any) or
interest (including any Additional Interest) on the Securities or on account of
the purchase or other acquisition of Securities by the Company or any
Subsidiary; provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with this Indenture or as
otherwise specified as contemplated by Section 301 for the Securities of any
series by delivering and crediting as contemplated by Section 301 for the
Securities of any series Securities which have been acquired (upon redemption or
otherwise) prior to such declaration of acceleration.

                                       74

      In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.

      The provisions of this Section shall not apply to any payment with respect
to which Section 1202 would be applicable.

SECTION 1204. No Payment When Senior Debt in Default.

      (a) In the event and during the continuation of any default in the payment
of principal of (or premium, if any) or interest on any Senior Debt, or in the
event that any event of default with respect to any Senior Debt shall have
occurred and be continuing and shall have resulted in such Senior Debt becoming
or being declared due and payable prior to the date on which it would otherwise
have become due and payable, unless and until such event of default shall have
been cured or waived or shall have ceased to exist and such acceleration shall
have been rescinded or annulled, or (b) in the event any judicial proceeding
shall be pending with respect to any such default in payment or such event or
default, then no payment or distribution of any kind or character, whether in
cash, properties or securities (including any Junior Subordinated Payment) shall
be made by the Company on account of principal of (or premium, if any) or
interest (including any Additional Interest), if any, on the Securities or on
account of the purchase or other acquisition of Securities by the Company or any
Subsidiary; provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with this Indenture or as
otherwise specified as contemplated by Section 301 for the Securities of any
series by delivering and crediting pursuant to Section 1202 or as otherwise
specified as contemplated by Section 301 for the Securities of any series
Securities which have been acquired (upon redemption or otherwise) prior to such
default in payment or event of default.

      In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.

      The provisions of this Section shall not apply to any payment with respect
to which Section 1202 would be applicable.

                                       75

SECTION 1205. Payment Permitted If No Default.

      Nothing contained in this Article or elsewhere in this Indenture or in any
of the Securities shall prevent (a) the Company, at any time except during the
pendency of any Proceeding referred to in Section 1202 or under the conditions
described in Sections 1203 and 1204, from making payments at any time of
principal of (and premium, if any) or interest on the Securities, or (b) the
application by the Trustee of any money or Government Obligations deposited with
it hereunder to the payment of or on account of the principal of (and premium,
if any) or interest (including any Additional Interest) on the Securities or the
retention of such payment by the Holders, if, at the time of such application by
the Trustee, it did not have knowledge that such payment would have been
prohibited by the provisions of this Article.

SECTION 1206. Subrogation to Rights of Holders of Senior Debt.

      Subject to the payment in full of all Senior Debt, or the provision for
such payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Debt, the Holders of the Securities shall be subrogated
to the extent of the payments or distributions made to the holders of such
Senior Debt pursuant to the provisions of this Article (equally and ratably with
the holders of all indebtedness of the Company which by its express terms is
subordinated to Senior Debt of the Company to substantially the same extent as
the Securities are subordinated to the Senior Debt and is entitled to like
rights of subrogation by reason of any payments or distributions made to holders
of such Senior Debt) to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of (and premium, if any) and interest on the
Securities shall be paid in full. For purposes of such subrogation or
assignment, no payments or distributions to the holders of the Senior Debt of
any cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Debt by Holders of the Securities or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Debt, and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt.

SECTION 1207. Provisions Solely to Define Relative Rights.

      The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall (a) impair, as between the Company and the Holders of the Securities, the
obligations of the Company, which are absolute and unconditional, to pay to the
Holders of the Securities the principal of (and premium, if any) and interest
(including any Additional Interest) on the Securities as and

                                       76

when the same shall become due and payable in accordance with their terms; or
(b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than their rights in relation to
the holders of Senior Debt; or (c) prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture including, without limitation, filing and voting
claims in any Proceeding, subject to the rights, if any, under this Article of
the holders of Senior Debt to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder.

SECTION 1208. Trustee to Effectuate Subordination.

      Each Holder of a Security by his or her acceptance thereof authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination provided in this
Article and appoints the Trustee his or her attorney-in-fact for any and all
such purposes.

SECTION 1209. No Waiver of Subordination Provisions.

      No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with.

SECTION 1210. Notice to Trustee.

      The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee, agent or representative
therefor (whether or not the facts contained in such notice are true); provided,
however, that if the Trustee shall not have received the notice provided for in
this Section at least two Business Days prior to the date upon which by the
terms hereof any monies may become payable for any purpose (including, without
limitation, the payment of the principal of (and premium, if any) or interest
(including any Additional Interest) on any Security), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such monies and to apply the same to the purpose for which
they were received and shall not be

                                       77

affected by any notice to the contrary which may be received by it within two
Business Days prior to such date.

SECTION 1211. Reliance on Judicial Order or Certificate of Liquidating Agent.

      Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Article Six, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such 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 Trustee or to the Holders
of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt 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.

SECTION 1212. Trustee Not Fiduciary for Holders of Senior Debt.

      The Trustee, in its capacity as trustee under this Indenture, shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt and shall not be
liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article or otherwise.

SECTION 1213. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights.

      The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Debt which may at any time
be held by it, to the same extent as any other holder of Senior Debt, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.

SECTION 1214. Article Applicable to Paying Agents.

      In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee.

                                       78

SECTION 1215. Certain Conversions or Exchanges Deemed Payment.

      For the purposes of this Article only, (a) the issuance and delivery of
junior securities upon conversion or exchange of Securities shall not be deemed
to constitute a payment or distribution on account of the principal of (or
premium, if any) or interest (including any Additional Interest) on Securities
or on account of the purchase or other acquisition of Securities, and (b) the
payment, issuance or delivery of cash, property or securities (other than junior
securities) upon conversion or exchange of a Security shall be deemed to
constitute payment on account of the principal of such security. For the
purposes of this Section, the term "junior securities" means (i) shares of any
stock of any class of the Company and (ii) securities of the Company which are
subordinated in right of payment to all Senior Debt which may be outstanding at
the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article.

                                     * * * *

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

                                       79

      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.

                                    PRINCIPAL FINANCIAL GROUP, INC.

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

Attest:

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

                                    WILMINGTON TRUST COMPANY, as Property
                                    Trustee

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

                                       80

                                                                         ANNEX A

                                 TRUST AGREEMENT

      This TRUST AGREEMENT, dated as of ______, 200_, between Principal
Financial Group, Inc., a Delaware corporation, as "Depositor" and
_________________, a _______________ as "Trustee". The Depositor and the Trustee
hereby agree as follows:

         1. The trust created hereby shall be known as _____________, in which
name the Trustee, or the Depositor to the extent provided herein, may conduct
the business of the Trust, make and execute contracts, and sue and be sued.

         2. The Depositor hereby assigns, transfers, conveys and sets over to
the Trustee the sum of $10. The Trustee hereby acknowledges receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustee hereby declares that it will hold the trust estate in
trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a statutory trust under Chapter 38 of Title 12
of the Delaware Code, 12 Del. C. Section 3801 et seq. (the "Statutory Trust
Act"), and that this document constitutes the governing instrument of the Trust.
The Trustee is hereby authorized and directed to execute and file a certificate
of trust with the Delaware Secretary of State in accordance with the provisions
of the Statutory Trust Act.

         3. The Depositor and the Trustee will enter into an amended and
restated Trust Agreement, satisfactory to each such party and substantially in
the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common Securities
referred to therein. Prior to the execution and delivery of such amended and
restated Trust Agreement, the Trustee shall not have any duty or obligation
hereunder or with respect to the trust estate, and the Depositor shall take or
cause to be taken any action as may be required to obtain any licenses, consents
or approvals required by applicable law or otherwise. Notwithstanding the
foregoing, the Trustee may take all actions requested by the Depositor which the
Depositor deems necessary, convenient or incidental to effect the transactions
contemplated herein. Except as otherwise expressly required by Section 2 herein,
the Trustee shall not have any duty or obligation under or in connection with
this Trust Agreement or any document contemplated hereby, including, without
limitation, with respect to the administration of the Trust, and no implied
duties or obligations shall be inferred from or read into this Trust Agreement
against or with respect to the Trustee. The Trustee has no duty or obligation to
supervise or monitor the performance of, or compliance with this Trust
Agreement, by the Depositor or any other beneficiaries, any agents or
attorneys-in-fact of the Depositor, or any other trustee of the Trust. The
Trustee shall not be liable for the acts or omissions of the Depositor or any
other beneficiaries, any agents or attorneys-in-fact of the Depositor, or any
other trustee of the Trust nor shall

the Trustee be liable for any act or omission by it in good faith in accordance
with the directions of the Depositor. The right of the Trustee to perform any
discretionary act enumerated herein shall not be construed as a duty.

         4. The Depositor is hereby authorized, (i) to file with the Securities
and Exchange Commission (the "Commission") and execute, in each case on behalf
of the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to such 1933 Act Registration Statement (including the prospectus and
the exhibits contained therein), relating to the registration under the
Securities Act of 1933, as amended, of the Preferred Securities of the Trust and
certain other securities and (b) a Registration Statement on Form 8-A (the "1934
Act Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities of
the Trust under Section 12(b) of the Securities Exchange Act of 1934, as
amended; (ii) to file with the New York Stock Exchange (the "Exchange") and
execute on behalf of the Trust a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred Securities to be listed on the Exchange;
(iii) to file and execute on behalf of the Trust such applications, reports,
surety bonds, irrevocable consents, appointments of attorney for service of
process and other papers and documents as shall be necessary or desirable to
register the Preferred Securities under the securities or "Blue Sky" laws, and
to obtain any permits under the insurance laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable and (iv) to
execute on behalf of the Trust one or more Underwriting Agreements with one or
more underwriters relating to the offering of the Preferred Securities. In the
event that any filing referred to in clauses (i), (ii) and (iii) above is
required by the rules and regulations of the Commission, the Exchange or state
securities or blue sky laws, to be executed on behalf of the Trust by a Trustee,
the Depositor and any Trustee appointed pursuant to Section 6 hereof are hereby
authorized to join in any such filing and to execute on behalf of the Trust any
and all of the foregoing. In connection with all of the foregoing, the Depositor
hereby constitutes and appoints _________, _________ and _____________, and each
of them, as its true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the Depositor or in the Depositor's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to the 1933 Act Registration Statement and
the 1934 Act Registration Statement and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as the Depositor
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their respective substitute or
substitutes, shall do or cause to be done by virtue hereof.

         5. The Trustee is authorized to take such action or refrain from taking
such action under this Trust Agreement as it may be directed in writing by the
Depositor from time to time; provided, however, that the Trustee shall not be
required to take or refrain from taking any such action if it shall have
determined, or shall have been advised by counsel, that such performance is
likely to involve the Trustee in personal liability or is contrary to the terms
of this Trust Agreement or of any document contemplated hereby to which the
Trust or the Trustee is a party or is otherwise contrary to law. If at any time
the Trustee determines that it requires or desires guidance regarding the
application of any provision of this Trust Agreement or any other document, or
regarding compliance with any direction it received hereunder, then the Trustee
may deliver a notice to the Depositor requesting written instructions as to the
course of action desired by the Depositor, and such instructions by or on behalf
of the Depositor shall constitute full and complete authorization and protection
for actions taken and other performance by the Trustee in reliance thereon.
Until the Trustee has received such instructions after delivering such notice,
it may refrain from taking any action with respect to the matters described in
such notice.

         6. The Depositor hereby agrees to (i) reimburse the Trustee for all
reasonable expenses (including reasonable fees and expenses of counsel and other
experts), (ii) indemnify, defend and hold harmless the Trustee and the officers,
directors, employees and agents of the Trustee (collectively, including the
Trustee in its individual capacity, the "Indemnified Persons") from and against
any and all losses, damages, liabilities, claims, actions, suits, costs,
expenses, disbursements (including the reasonable fees and expenses of counsel),
taxes and penalties of any kind and nature whatsoever (collectively,
"Expenses"), to the extent that such Expenses arise out of or are imposed upon
or asserted at any time against such Indemnified Persons with respect to the
performance of this Trust Agreement, the creation, operation, administration or
termination of the Trust, or the transactions contemplated hereby; provided,
however, that the Depositor shall not be required to indemnify an Indemnified
Person for Expenses to the extent such Expenses result from the willful
misconduct, bad faith or gross negligence of such Indemnified Person, and (iii)
advance to each such Indemnified Person Expenses (including reasonable fees and
expenses of counsel) incurred by such Indemnified Person, in defending any
claim, demand, action, suit or proceeding prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Depositor of an
undertaking, by or on behalf of such Indemnified Person, to repay such amount if
it shall be determined that such Indemnified Person is not entitled to be
indemnified therefor under this Section 6. The obligations of the Depositor
under this Section 6 shall survive the resignation or removal of any Trustee,
shall survive the termination of this Trust Agreement, except by amendment and
restatement of this Trust Agreement, and shall survive the transfer by the
Depositor of any or all of its interest in the Trust.

         7. This Trust Agreement may be executed in one or more counterparts.

         8. The number of Trustees initially shall be one (1) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Depositor which may increase or decrease the
number of Trustees; provided, however, that to the extent required by the
Statutory Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable Delaware law. Subject to the foregoing, the
Depositor is entitled to appoint or remove without cause any Trustee at any
time. The Trustee may resign upon thirty days' prior notice to the Depositor.

         9. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws of principles).

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

                                    PRINCIPAL FINANCIAL GROUP, INC., as
                                    Depositor

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

                                    [                              ],
                                    as Trustee

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

                                                                         ANNEX B

                              AMENDED AND RESTATED

                                 TRUST AGREEMENT

                                      Among

                 PRINCIPAL FINANCIAL GROUP, INC., as Depositor,

                         __________, as Property Trustee
                              and Delaware Trustee,

                                       And

                    THE ADMINISTRATIVE TRUSTEES NAMED HEREIN

                              Dated as of --, 200--

                                [              ]

                                [              ]

              Certain Sections of this Trust Agreement relating to
                         Sections 310 through 318 of the
                          Trust Indenture Act of 1939:

           Trust Indenture                           Trust Agreement
             Act Section                                Section

(S) 310    (a)(1).......................................... 8.7
           (a)(2).......................................... 8.7
           (a)(3).......................................... 8.9
           (a)(4).......................................... 2.7(a)(ii)
           (b)............................................. 8.8
(S) 311    (a)............................................. 8.13
           (b)............................................. 8.13
(S) 312    (a)............................................. 5.7
           (b)............................................. 5.7
           (c)............................................. 5.7
(S) 313    (a)............................................. 8.14(a)
           (a)(4).......................................... 8.14(b)
           (b)............................................. 8.14(b)
           (c)............................................. 10.8
           (d)............................................. 8.14(c)
(S) 314    (a)............................................. 8.15
           (b)............................................. Not Applicable
           (c)(1).......................................... 8.16
           (c)(2).......................................... 8.16
           (c)(3).......................................... Not Applicable
           (d)............................................. Not Applicable
           (e)............................................. 1.1, 8.16
(S) 315    (a)............................................. 8.1(a), 8.3(a)
           (b)............................................. 8.2, 10.8
           (c)............................................. 8.1(a)
           (d)............................................. 8.1, 8.3
           (e)............................................. Not Applicable
(S) 316    (a)............................................. Not Applicable
           (a)(1)(A)....................................... Not Applicable
           (a)(1)(B)....................................... Not Applicable
           (a)(2).......................................... Not Applicable
           (b)............................................. Not Applicable
           (c)............................................. 6.7
(S) 317    (a)(1).......................................... Not Applicable

                                        i

           (a)(2).......................................... Not Applicable
           (b)............................................. 5.9
(S) 318    (a)............................................. 10.10

- ---------------
      Note: This reconciliation and tie sheet shall not, for any purpose,
be deemed to be a part of the Trust Agreement.

                                       ii

                                Table of Contents

                                                                            Page
                                                                            ----

                                    ARTICLE I

                                  Defined Terms

Section 1.1    Definitions.................................................   2

                                   ARTICLE II

                           Establishment of the Trust

Section 2.1    Name........................................................  11
Section 2.2    Office of the Delaware Trustee; Principal Place of
               Business....................................................  11
Section 2.3    Initial Contribution of Trust Property; Organizational
               Expenses....................................................  11
Section 2.4    Issuance of the Preferred Securities........................  12
Section 2.5    Subscription and Purchase of Debentures; Issuance of the
               Common Securities...........................................  12
Section 2.6    Declaration of Trust........................................  12
Section 2.7    Authorization to Enter into Certain Transactions............  13
Section 2.8    Assets of Trust.............................................  17
Section 2.9    Title to Trust Property.....................................  17

                                   ARTICLE III

                                 Payment Account

Section 3.1    Payment Account.............................................  17

                                   ARTICLE IV

                            Distributions; Redemption

Section 4.1    Distributions...............................................  18
Section 4.2    Redemption..................................................  19
Section 4.3    Subordination of Common Securities..........................  21
Section 4.4    Payment Procedures..........................................  21
Section 4.5    Tax Returns and Reports.....................................  22
Section 4.6    Payment of Taxes, Duties, Etc. of the Trust.................  22
Section 4.7    Payments under Indenture....................................  22

                                       iii

                                Table of Contents
                                   (continued)

                                                                            Page
                                                                            ----

                                    ARTICLE V

                          Trust Securities Certificates

Section 5.1    Initial Ownership...........................................  22
Section 5.2    The Trust Securities Certificates...........................  23
Section 5.3    Delivery of Trust Securities Certificates...................  23
Section 5.4    Registration of Transfer and Exchange of Preferred
               Securities Certificates.....................................  23
Section 5.5    Mutilated, Destroyed, Lost or Stolen Trust Securities
               Certificates................................................  24
Section 5.6    Persons Deemed Securityholders..............................  25
Section 5.7    Access to List of Securityholders' Names and Addresses......  25
Section 5.8    Maintenance of Office or Agency.............................  25
Section 5.9    Appointment of Paying Agent.................................  26
Section 5.10   Ownership of Common Securities by Depositor.................  26
Section 5.11   Book-Entry Preferred Securities Certificates; Common
               Securities Certificate......................................  27
Section 5.12   Notices to Clearing Agency..................................  28
Section 5.13   Definitive Preferred Securities Certificates................  28
Section 5.14   Rights of Securityholders...................................  29

                                   ARTICLE VI

                    Acts of Securityholders; Meetings; Voting

Section 6.1    Limitations on Voting Rights................................  29
Section 6.2    Notice of Meetings..........................................  30
Section 6.3    Meetings of Preferred Securityholders.......................  30
Section 6.4    Voting Rights...............................................  31
Section 6.5    Proxies, etc................................................  31
Section 6.6    Securityholder Action by Written Consent....................  31
Section 6.7    Record Date for Voting and Other Purposes...................  32
Section 6.8    Acts of Securityholders.....................................  32
Section 6.9    Inspection of Records.......................................  33

                                   ARTICLE VII

                         Representations and Warranties

Section 7.1    Representations and Warranties of the Bank, the Property
               Trustee and the Delaware Trustee............................  33

                                       iv

                                Table of Contents
                                   (continued)

                                                                            Page
                                                                            ----

Section 7.2    Representations and Warranties of Depositor.................  36

                                  ARTICLE VIII

                                  The Trustees

Section 8.1    Certain Duties and Responsibilities.........................  36
Section 8.2    Notice of Defaults..........................................  38
Section 8.3    Certain Rights of Property Trustee..........................  38
Section 8.4    Not Responsible for Recitals or Issuance of Securities......  41
Section 8.5    May Hold Securities.........................................  41
Section 8.6    Compensation; Indemnity; Fees...............................  41
Section 8.7    Corporate Property Trustee Required; Eligibility of Trustees  42
Section 8.8    Conflicting Interests.......................................  42
Section 8.9    Co-Trustees and Separate Trustee............................  43
Section 8.10   Resignation and Removal; Appointment of Successor...........  44
Section 8.11   Acceptance of Appointment by Successor......................  46
Section 8.12   Merger, Conversion, Consolidation or Succession to Business.  47
Section 8.13   Preferential Collection of Claims Against Depositor or Trust  47
Section 8.14   Reports by Property Trustee.................................  47
Section 8.15   Reports to the Property Trustee.............................  48
Section 8.16   Evidence of Compliance with Conditions Precedent............  48
Section 8.17   Number of Trustees..........................................  48
Section 8.18   Delegation of Power.........................................  49

                                   ARTICLE IX

                       Dissolution, Liquidation and Merger

Section 9.1    Dissolution Upon Expiration Date............................  49
Section 9.2    Early Dissolution...........................................  49
Section 9.3    Termination.................................................  50
Section 9.4    Liquidation.................................................  50
Section 9.5    Mergers, Consolidations, Amalgamations or Replacements of
               the Trust...................................................  52

                                    ARTICLE X

                            Miscellaneous Provisions

Section 10.1   Limitation of Rights of Securityholders.....................  53
Section 10.2   Amendment...................................................  53
Section 10.3   Separability................................................  54

                                       v

                                Table of Contents
                                   (continued)

                                                                            Page
                                                                            ----

Section 10.4   Governing Law...............................................  54
Section 10.5   Payments Due on Non-Business Day............................  55
Section 10.6   Successors..................................................  55
Section 10.7   Headings....................................................  55
Section 10.8   Reports, Notices and Demands................................  55
Section 10.9   Agreement Not to Petition...................................  56
Section 10.10  Trust Indenture Act; Conflict with Trust Indenture Act......  56
Section 10.11  Acceptance of Terms of Trust Agreement, Guarantee and
               Indenture...................................................  57

Exhibit A.       Certificate of Trust
Exhibit B.       Form of Certificate Depository Agreement
Exhibit C.       Form of Common Securities Certificate
Exhibit D.       Form of Expense Agreement
Exhibit E.       Form of Preferred Securities

                                       vi

      AMENDED AND RESTATED TRUST AGREEMENT, dated as of ___________, 200--,
among (i) Principal Financial Group, Inc., a Delaware corporation (including any
successors or assigns, the "Depositor"), (ii) _______________________, a
_____________ duly organized and existing under the laws of the State of
Delaware, as property trustee and Delaware trustee (in each such capacity, the
"Property Trustee" and "Delaware Trustee," respectively, and, in its separate
corporate capacity and not in its capacity as Property Trustee or Delaware
Trustee, the "Bank"), (iii) --, an individual, and --, an individual, each of
whose address is c/o Principal Financial Group, Inc., 711 High Street, Des
Moines, Iowa 50392 (each an "Administrative Trustee" and collectively the
"Administrative Trustees") (the Property Trustee, the Delaware Trustee and the
Administrative Trustees referred to collectively as the "Trustees") and (iv) the
several Holders, as hereinafter defined.

                              W I T N E S S E T H:

      WHEREAS, the Depositor and the Delaware Trustee have heretofore duly
declared and established a statutory trust pursuant to the Delaware Statutory
Trust Act by the entering into of that certain Trust Agreement, dated as of
_________, 200-- (the "Original Trust Agreement"), and by the execution and
filing by the Delaware Trustee with the Secretary of State of the State of
Delaware of the Certificate of Trust, filed on _______, 200--, attached as
Exhibit A; and

      WHEREAS, the parties thereto desire to amend and restate the Original
Trust Agreement in its entirety as set forth herein to provide for, among other
things, (i) the issuance of the Common Securities by the Trust to the Depositor,
(ii) the issuance and sale of the Preferred Securities by the Trust pursuant to
the Underwriting Agreement, (iii) the acquisition by the Trust from the
Depositor of all of the right, title and interest in the Debentures and (iv) the
appointment of the Administrative Trustees;

      NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other party and
for the benefit of the Securityholders, hereby amends and restates the Original
Trust Agreement in its entirety and agrees as follows:

                                    ARTICLE I

                                  DEFINED TERMS

      Section 1.1. Definitions.

      For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:

            (a) the terms defined in this Article have the meanings assigned to
      them in this Article and include the plural as well as the singular;

            (b) all other terms used herein that are defined in the Trust
      Indenture Act, either directly or by reference therein, have the meanings
      assigned to them therein;

            (c) unless the context otherwise requires, any reference to an
      "Article" or a "Section" refers to an Article or a Section, as the case
      may be, of this Trust Agreement; and

            (d) the words "herein", "hereof" and "hereunder" and other words of
      similar import refer to this Trust Agreement as a whole and not to any
      particular Article, Section or other subdivision.

      "Act" has the meaning specified in Section 6.8.

      "Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by the Depositor on a Like Amount of Debentures
for such period.

      "Administrative Trustee" means each of -- and --, solely in his capacity
as Administrative Trustee of the Trust not in his individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.

      "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any 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.

      "Bank" has the meaning specified in the preamble to this Trust Agreement.

                                       2

      "Bankruptcy Event" means, with respect to any Person:

            (a) the entry of a decree or order by a court having jurisdiction in
      the premises judging such Person a bankrupt or insolvent, or approving as
      properly filed a petition seeking reorganization, arrangement,
      adjudication or composition of or in respect of such Person under any
      applicable Federal or State bankruptcy, insolvency, reorganization or
      other similar law, or appointing a receiver, liquidator, assignee,
      trustee, sequestrator (or other similar official) of such Person 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 unstayed
      and in effect for a period of 60 consecutive days; or

            (b) the institution by such Person of proceedings to be adjudicated
      a bankrupt or insolvent, or the consent by it to the institution of
      bankruptcy or insolvency proceedings against it, or the filing by it of a
      petition or answer or consent seeking reorganization or relief under any
      applicable Federal or State bankruptcy, insolvency, reorganization or
      other similar law, or the consent by it to the filing of any such petition
      or to the appointment of a receiver, liquidator, assignee, trustee,
      sequestrator (or similar official) of such Person or of any substantial
      part of its property, 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 and its willingness to be
      adjudicated a bankrupt, or the taking of corporate action by such Person
      in furtherance of any such action.

      "Bankruptcy Laws" has the meaning specified in Section 10.9.

      "Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors, or such committee of the Board of Directors or
officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the Trustee.

      "Book Entry Preferred Securities Certificates" means a beneficial interest
in the Preferred Securities Certificates, ownership and transfers of which shall
be made through book entries by a Clearing Agency as described in Section 5.11.

      "Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed, or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.

                                       3

      "Certificate Depository Agreement" means the agreement among the Trust,
the Depositor and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Trust Certificates, substantially
in the form attached as Exhibit B, as the same may be amended and supplemented
from time to time.

      "Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depository Trust Company will be the initial Clearing Agency.

      "Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.

      "Closing Date" means the First Time of Delivery as defined in the
Underwriting Agreement, which date is also the date of execution and delivery of
this Trust Agreement.

      "Code" means the Internal Revenue Code of 1986, as amended.

      "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
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 Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.

      "Common Securities Certificate" means a certificate evidencing ownership
of Common Securities, substantially in the form attached as Exhibit C.

      "Corporate Trust Office" means (i) in the case of the Property Trustee,
the principal office of the Property Trustee, which as of the Closing Date is
located in _____________, Delaware; and (ii) in the case of the Debenture
Trustee, the principal office of the Debenture Trustee, which as of the Closing
Date is located in _____________, Delaware.

      "Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.

      "Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.

                                       4

      "Debentures" means the $-- aggregate principal amount of the Depositor's
- --% Junior Subordinated Deferrable Interest Debentures, Series --, issued
pursuant to the Indenture.

      "Debenture Trustee" means __________, a ______________ organized under the
laws of the State of Delaware and any successor thereto, not in its individual
capacity but solely in its capacity as trustee.

      "Definitive Preferred Securities Certificates" means either or both (as
the context requires) of (a) Preferred Securities Certificates issued in
certificated, fully registered form as provided in Section 5.11(a) and (b)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.

      "Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. (S) 3801, et seq., as it may be amended from time to
time.

      "Delaware Trustee" means the commercial bank or trust company identified
as the "Delaware Trustee" in the preamble to this Trust Agreement solely in its
capacity as Delaware Trustee of the Trust and not in its individual capacity, or
its successor in interest in such capacity, or any successor trustee appointed
as herein provided.

      "Depositor" has the meaning specified in the preamble to this Trust
Agreement.

      "Distribution Date" has the meaning specified in Section 4.1(a).

      "Distributions" means amounts payable in respect of the Trust Securities
as provided in Section 4.1.

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

            (a) the occurrence of a Debenture Event of Default; or

            (b)  default by the Trust in the payment of any Distribution
      when it becomes due and payable, and continuation of such default
      for a period of 30 days; or

            (c)  default by the Trust in the payment of any Redemption
      Price of any Trust Security when it becomes due and payable; or

            (d) default in the performance, or breach, in any material respect,
      of any covenant or warranty of the Trustees in this Trust Agreement (other
      than a

                                       5

      covenant or warranty a default in whose performance or breach is dealt
      with in clause (b) or (c), above) and continuation of such default or
      breach for a period of 60 days after there has been given, by registered
      or certified mail, to the defaulting Trustee or Trustees by the Holders of
      at least 10% in Liquidation Amount of the Outstanding Preferred Securities
      a written notice specifying such default or breach and requiring it to be
      remedied and stating that such notice is a "Notice of Default" hereunder;
      or

            (e) the occurrence of a Bankruptcy Event with respect to the
      Property Trustee and the failure by the Depositor to appoint a successor
      Property Trustee within 60 days thereof.

      "Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.

      "Expenses" has the meaning specified in Section 8.6(c).

      "Expiration Date" has the meaning specified in Section 9.1.

      "Grantor Trust Event" has the meaning specified in Section 9.2(b).

      "Guarantee" means the Guarantee Agreement executed and delivered by the
Depositor and __________, as trustee, contemporaneously with the execution and
delivery of this Trust Agreement, for the benefit of the holders of the
Preferred Securities, as amended from time to time.

      "Indenture" means the Junior Subordinated Indenture, dated as of --,
200--, as supplemented by a Supplemental Indenture No. --, dated as of --, --,
between the Depositor and the Debenture Trustee, as trustee, as amended or
supplemented from time to time.

      "Independent Legal Counsel" has the meaning specified in Section 6.8.

      "Investment Company Event" means the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law") to the effect that the Trust is or will be considered
an "investment company" that is required to be registered under the 1940 Act,
which Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities under this Trust Agreement.

      "Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference,

                                       6

priority or other security agreement or preferential arrangement of any kind or
nature whatsoever.

      "Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to the principal amount of
Debentures to be contemporaneously redeemed in accordance with the Indenture the
proceeds of which will be used to pay the Redemption Price of such Trust
Securities, and (b) with respect to a distribution of Debentures to Holders of
Trust Securities in connection with a dissolution or liquidation of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Debentures are distributed.

      "Liquidation Amount" means the stated amount of $25 per Trust Security.

      "Liquidation Date" means each Date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 9.4(a).

      "Liquidation Distribution" has the meaning specified in Section 9.4(d).

      "1940 Act" means the Investment Company Act of 1940, as amended.

      "Officers' Certificate" means a certificate signed by the Chairman,
President, Chief Executive Officer or a Vice President, and by the Treasurer, an
Associate Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary, of the Depositor, and delivered to the appropriate Trustee.
One of the officers signing an Officers' Certificate given pursuant to Section
8.6 shall be the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Trust Agreement shall include:

            (a) a statement that each officer signing the Officers' Certificate
      has read the covenant or condition and the definitions relating thereto;

            (b) a brief statement of the nature and scope of the examination or
      investigation undertaken by each officer in rendering the Officers'
      Certificate;

            (c) a statement that each such officer has made such examination or
      investigation as, in such officer's opinion, is necessary to enable such
      officer to express an informed opinion as to whether or not such covenant
      or condition has been complied with; and

            (d) a statement as to whether, in the opinion of each such officer,
      such condition or covenant has been complied with.

                                       7

      "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, but not an
employee of any thereof, and who shall be acceptable to the Property Trustee.

      "Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.

      "Outstanding", when used with respect to Preferred Securities, means, as
of the date of determination, all Preferred Securities theretofore executed and
delivered under this Trust Agreement, except:

            (a) Preferred Securities theretofore cancelled by the Administrative
      Trustees or delivered to the Administrative Trustees for cancellation;

            (b) Preferred Securities for whose payment or redemption money in
      the necessary amount has been theretofore deposited with the Property
      Trustee or any Paying Agent for the Holders of such Preferred Securities;
      provided that, if such Preferred Securities are to be redeemed, notice of
      such redemption has been duly given pursuant to this Trust Agreement; and

            (c) Preferred Securities which have been paid or in exchange for or
      in lieu of which other Preferred Securities have been executed and
      delivered pursuant to Section 5.5;

provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that such Trustee knows to be so owned shall
be so disregarded and (b) the foregoing shall not apply at any time when all of
the outstanding Preferred Securities are owned by the Depositor, one or more of
the Trustees and/or any such Affiliate. Preferred Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to act with respect to such Preferred Securities and that the pledgee
is not the Depositor or any Affiliate of the Depositor.

      "Owner" means each Person who is the beneficial owner of a Book Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person

                                       8

maintaining an account with such Clearing Agency (directly or indirectly, in
accordance with the rules of such Clearing Agency).

      "Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.9 and shall initially be the Property Trustee.

      "Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its trust department
for the benefit of the Securityholders in which all amounts paid in respect of
the Debentures will be held and from which the Property Trustee shall make
payments to the Securityholders in accordance with Section 4.1.

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

      "Preferred Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.

      "Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as Exhibit
E.

      "Property Trustee" means the commercial bank or trust company identified
as the "Property Trustee" in the preamble to this Trust Agreement solely in its
capacity as Property Trustee of the Trust and not in its individual capacity, or
its successor in interest in such capacity, or any successor property trustee
appointed as herein provided.

      "Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.

      "Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the date of redemption, plus the related amount of the premium,
if any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Debentures, allocated on a pro rata basis (based on Liquidation Amounts) among
the Trust Securities.

      "Relevant Trustee" shall have the meaning specified in Section 8.10.

      "Responsible Officer" means, with respect to the Property Trustee or
Delaware Trustee, any officer within the Corporate Trust Office of the Property
Trustee or

                                       9

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

      "Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.

      "Securityholder" or "Holder" means a Person in whose name a Trust Security
or Securities is registered in the Securities Register; any such Person shall be
deemed to be a beneficial owner within the meaning of the Delaware Statutory
Trust Act.

      "Special Event" has the meaning specified in Section 9.2(b).

      "Tax Event" means the receipt by the Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein affecting taxation, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the date of issuance of
the Preferred Securities under this Trust Agreement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days after the
date thereof, subject to United States Federal income tax with respect to income
received or accrued on the Debentures, (ii) interest payable by the Depositor on
the Debentures is not, or within 90 days after the date thereof, will not be,
deductible, in whole or in part, for United States Federal income tax purposes
or (iii) the Trust is, or will be within 90 days after the date thereof, subject
to more than a de minimis amount of other taxes, duties, assessments or other
governmental charges.

      "Trust" means the Delaware statutory trust created and continued hereby
and identified on the cover page to this Trust Agreement.

      "Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including all exhibits hereto, including, for all purposes of
this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or supplement,
respectively.

                                       10

      "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; 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.

      "Trust Property" means (a) the Debentures, (b) any cash on deposit in, or
owing to, the Payment Account and (c) all proceeds and rights in respect of the
foregoing and any other property and assets for the time being held or deemed to
be held by the Property Trustee pursuant to the trusts of this Trust Agreement.

      "Trust Security" means any one of the Common Securities or the Preferred
Securities.

      "Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.

      "Underwriting Agreement" means the Underwriting Agreement, dated as of --,
- --, among the Trust, the Depositor and the Underwriters named therein.

                                   ARTICLE II
                           ESTABLISHMENT OF THE TRUST

      Section 2.1. Name.

      The Trust created and continued hereby shall be known as
"[______________]," as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.

      Section 2.2. Office of the Delaware Trustee; Principal Place of Business.

      The address of the Delaware Trustee in the State of Delaware is c/o
__________________, _______________, ___________, Delaware ________, Attention:
_______________, or such other address in the State of Delaware as the Delaware
Trustee may designate by written notice to the Securityholders and the
Depositor. The principal executive office of the Trust is c/o Principal
Financial Group, Inc., 711 High Street, Des Moines, Iowa 50392.

      Section 2.3. Initial Contribution of Trust Property; Organizational
Expenses.

      The Property Trustee acknowledges receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the

                                       11

initial Trust Property. The Depositor shall pay organizational expenses of the
Trust as they arise or shall, upon request of any Trustee, promptly reimburse
such Trustee for any such expenses paid by such Trustee. The Depositor shall
make no claim upon the Trust Property for the payment of such expenses.

      Section 2.4. Issuance of the Preferred Securities.

      On behalf of the Trust and pursuant to the Original Trust Agreement,
executed and delivered the Underwriting Agreement. Contemporaneously with the
execution and delivery of this Trust Agreement, an Administrative Trustee, on
behalf of the Trust, shall execute in accordance with Section 5.2 and deliver to
the Underwriters named therein Preferred Securities Certificates, registered in
the name of the nominee of the initial Clearing Agency, in an aggregate amount
of -- Preferred Securities having an aggregate Liquidation Amount of $--,
against receipt of the aggregate purchase price of such Preferred Securities of
$--, which amount the Administrative Trustees shall promptly deliver to the
Property Trustee.

      Section 2.5. Subscription and Purchase of Debentures; Issuance of the
                   Common Securities.

      Contemporaneously with the execution and delivery of this Trust Agreement,
the Administrative Trustees, on behalf of the Trust, shall subscribe to and
purchase from the Depositor Debentures, registered in the name of the Trust and
having an aggregate principal amount equal to $--, and, in satisfaction of the
purchase price for such Debentures, the Property Trustee, on behalf of the
Trust, shall deliver to the Depositor the sum of $--. Contemporaneously
therewith, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 5.2 and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, in an aggregate amount of
- -- Common Securities having an aggregate Liquidation Amount of $-- against
payment by the Depositor of the sum of $--.

      Section 2.6. Declaration of Trust.

      The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and use the proceeds from such sale to acquire the
Debentures, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees of
the Trust, to have all the rights, powers and duties to the extent set forth
herein, and the Trustees hereby accept such appointment. The Property Trustee
hereby declares that it will hold the Trust Property in trust upon and subject
to the conditions set forth herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware

                                       12

Trustee have any of the duties and responsibilities, of the Property Trustee or
the Administrative Trustees set forth herein. The Delaware Trustee shall be one
of the Trustees of the Trust for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Delaware Statutory Trust Act.

      Section 2.7. Authorization to Enter into Certain Transactions.

            (a) The Trustees shall conduct the affairs of the Trust in
      accordance with the terms of this Trust Agreement. Subject to the
      limitations set forth in paragraph (b) of this Section, and in accordance
      with the following provisions (i) and (ii), the Administrative Trustees
      shall have the authority to enter into all transactions and agreements
      determined by the Trustees to be appropriate in exercising the authority,
      express or implied, otherwise granted to the Trustees under this Trust
      Agreement, and to perform all acts in furtherance thereof, including
      without limitation, the following:

                  (i) As among the Trustees, each Administrative Trustee shall
            have the power and authority to act on behalf of the Trust with
            respect to the following matters:

                        (A) the issuance and sale of the Trust Securities;

                        (B) to cause the Trust to enter into, and to execute,
                  deliver and perform on behalf of the Trust, the Expense
                  Agreement and the Certificate Depository Agreement and such
                  other agreements as may be necessary or desirable in
                  connection with the purposes and function of the Trust;

                        (C) assisting in the registration of the Preferred
                  Securities under the Securities Act of 1933, as amended, and
                  under state securities or blue sky laws, and the qualification
                  of this Trust Agreement as a trust indenture under the Trust
                  Indenture Act;

                        (D) assisting in the listing of the Preferred Securities
                  upon such securities exchange or exchanges as shall be
                  determined by the Depositor and the registration of the
                  Preferred Securities under the Securities Exchange Act of
                  1934, as amended, and the preparation and filing of all
                  periodic and other reports and other documents pursuant to the
                  foregoing;

                        (E) the sending of notices (other than notices of
                  default) and other information regarding the Trust Securities
                  and the Debentures to the Securityholders in accordance with
                  this Trust Agreement;

                                       13

                        (F) the appointment of a Paying Agent, authenticating
                  agent and Securities Registrar in accordance with this Trust
                  Agreement;

                        (G) registering transfer of the Trust Securities in
                  accordance with this Trust Agreement;

                        (H) to the extent provided in this Trust Agreement, the
                  winding up of the affairs of and liquidation of the Trust and
                  the preparation, execution and filing of the certificate of
                  cancellation with the Secretary of State of the State of
                  Delaware;

                        (I) unless as otherwise required by the Delaware
                  Statutory Trust Act or the Trust Indenture Act, to execute on
                  behalf of the Trust (either acting alone or together with any
                  or all of the Administrative Trustees) any documents that the
                  Administrative Trustees have the power to execute pursuant to
                  this Trust Agreement; and

                        (J) the taking of any action incidental to the foregoing
                  as the Trustees may from time to time determine is necessary
                  or advisable to give effect to the terms of this Trust
                  Agreement for the benefit of the Securityholders (without
                  consideration of the effect of any such action on any
                  particular Securityholder).

                  (ii) As among the Trustees, the Property Trustee shall have
            the power, duty and authority to act on behalf of the Trust with
            respect to the following matters:

                        (A) the establishment of the Payment Account;

                        (B) the receipt of the Debentures;

                        (C) the collection of interest, principal and any other
                  payments made in respect of the Debentures in the Payment
                  Account;

                        (D) the distribution of amounts owed to the
                  Securityholders in respect of the Trust Securities;

                        (E) the exercise of all of the rights, powers and
                  privileges of a holder of the Debentures;

                                       14

                        (F) the sending of notices of default and other
                  information regarding the Trust Securities and the Debentures
                  to the Securityholders in accordance with this Trust
                  Agreement;

                        (G) the distribution of the Trust Property in accordance
                  with the terms of this Trust Agreement;

                        (H) to the extent provided in this Trust Agreement, the
                  winding up of the affairs of and liquidation of the Trust and
                  the preparation, execution and filing of the certificate of
                  cancellation with the Secretary of State of the State of
                  Delaware;

                        (I) after an Event of Default the taking of any action
                  incidental to the foregoing as the Property Trustee may from
                  time to time determine is necessary or advisable to give
                  effect to the terms of this Trust Agreement and protect and
                  conserve the Trust Property for the benefit of the
                  Securityholders (without consideration of the effect of any
                  such action on any particular Securityholder);

                        (J) registering transfers of the Trust Securities in
                  accordance with this Trust Agreement; and

                        (K) subject to this Section 2.7(a)(ii), the Property
                  Trustee shall have none of the duties, liabilities, powers or
                  the authority of the Administrative Trustees set forth in
                  Section 207(a)(i).

            (b) So long as this Trust Agreement remains in effect, the Trust (or
      the Trustees acting on behalf of the Trust) shall not undertake any
      business, activities or transaction except as expressly provided herein or
      contemplated hereby. In particular, the Trustees shall not (i) acquire any
      investments or engage in any activities not authorized by this Trust
      Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge,
      set-off or otherwise dispose of any of the Trust Property or interests
      therein, including to Securityholders, except as expressly provided
      herein, (iii) take any action that would cause the Trust to fail or cease
      to qualify as a "grantor trust" for federal income tax purposes, (iv)
      incur any indebtedness for borrowed money or issue any other debt or (v)
      take or consent to any action that would result in the placement of a Lien
      on any of the Trust Property. The Administrative Trustees shall defend all
      claims and demands of all Persons at any time claiming any Lien on any of
      the Trust Property adverse to the interest of the Trust or the
      Securityholders in their capacity as Securityholders.

                                       15

            (c) In connection with the issue and sale of the Preferred
      Securities, the Depositor shall have the right and responsibility to
      assist the Trust with respect to, or effect on behalf of the Trust, the
      following (and any actions taken by the Depositor in furtherance of the
      following prior to the date of this Trust Agreement are hereby ratified
      and confirmed in all respects):

                  (i) to prepare for filing by the Trust with the Commission and
            to execute on behalf of the Trust a registration statement on Form
            S-3 or S-4 in relation to the Preferred Securities, including any
            amendments thereto;

                  (ii) to determine the States in which to take appropriate
            action to qualify or register for sale all or part of the Preferred
            Securities and to do any and all such acts, other than actions which
            must be taken by or on behalf of the Trust, and advise the Trustees
            of actions they must take on behalf of the Trust, and prepare for
            execution and filing any documents to be executed and filed by the
            Trust or on behalf of the Trust, as the Depositor deems necessary or
            advisable in order to comply with the applicable laws of any such
            States;

                  (iii) to prepare for filing by the Trust and to execute on
            behalf of the Trust an application to the New York Stock Exchange or
            any other national stock exchange or the Nasdaq National Market for
            listing upon notice of issuance of any Preferred Securities;

                  (iv) to prepare for filing by the Trust with the Commission
            and to execute on behalf of the Trust a registration statement on
            Form 8-A relating to the registration of the Preferred Securities
            under Section 12(b) or 12(g) of the Exchange Act, including any
            amendments thereto;

                  (v) to negotiate the terms of, and execute and deliver, the
            Underwriting Agreement providing for the sale of the Preferred
            Securities; and

                  (vi) any other actions necessary or desirable to carry out any
            of the foregoing activities.

            (d) Notwithstanding anything herein to the contrary, the
      Administrative Trustees are authorized and directed to conduct the affairs
      of the Trust and to operate the Trust so that the Trust will not be deemed
      to be an "investment company" required to be registered under the
      Investment Company Act of 1940, as amended, or taxed as a corporation for
      United States federal income tax purposes and so that the Debentures will
      be treated as indebtedness of

                                       16

      the Depositor for United States federal income tax purposes. In this
      connection, the Depositor and the Administrative Trustees are authorized
      to take any action, not inconsistent with applicable law, the Certificate
      of Trust or this Trust Agreement, that each of the Depositor and the
      Administrative Trustees determines in their discretion to be necessary or
      desirable for such purposes, as long as such action does not adversely
      affect in any material respect the interests of the holders of the
      Preferred Securities.

      Section 2.8. Assets of Trust.

      The assets of the Trust shall consist of the Trust Property.

      Section 2.9. Title to Trust Property.

      Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Securityholders in accordance with
this Trust Agreement.

                                   ARTICLE III
                                 PAYMENT ACCOUNT

      Section 3.1. Payment Account.

            (a) On or prior to the Closing Date, the Property Trustee shall
      establish the Payment Account. The Property Trustee and any agent of the
      Property Trustee shall have exclusive control and sole right of withdrawal
      with respect to the Payment Account for the purpose of making deposits in
      and withdrawals from the Payment Account in accordance with this Trust
      Agreement. All monies and other property deposited or held from time to
      time in the Payment Account shall be held by the Property Trustee in the
      Payment Account for the exclusive benefit of the Securityholders and for
      distribution as herein provided, including (and subject to) any priority
      of payments provided for herein.

            (b) The Property Trustee shall deposit in the Payment Account,
      promptly upon receipt, all payments of principal or interest on, and any
      other payments or proceeds with respect to, the Debentures. Amounts held
      in the Payment Account shall not be invested by the Property Trustee
      pending distribution thereof.

                                       17

                                   ARTICLE IV
                            DISTRIBUTIONS; REDEMPTION

      Section 4.1. Distributions.

            (a) Distributions on the Trust Securities shall be cumulative, and
      will accumulate whether or not there are funds of the Trust available for
      the payment of Distributions. Distributions shall accrue from --, 200--,
      and, except in the event that the Depositor exercises its right to extend
      the interest payment period for the Debentures pursuant to the Indenture,
      shall be payable quarterly in arrears on --, --, -- and -- of each year,
      commencing on --, --. If any date on which Distributions are otherwise
      payable on the Trust Securities is not a Business Day, then the payment of
      such Distribution shall be made on the next succeeding day which is a
      Business Day (and without any interest or other payment in respect of any
      such delay) except that, if such Business Day is in the next succeeding
      calendar year, payment of such Distribution shall be made on the
      immediately preceding Business Day, in each case with the same force and
      effect as if made on such date (each date on which distributions are
      payable in accordance with this Section 4.1(a) a "Distribution Date").

            (b) The Trust Securities represent undivided beneficial interests in
      the Trust Property, and, as a practical matter, the Distributions on the
      Trust Securities shall be payable at a rate of --% per annum of the
      Liquidation Amount of the Trust Securities. The amount of Distributions
      payable for any full period shall be computed on the basis of a 360-day
      year of twelve 30-day months. The amount of Distributions payable for any
      period shall include the Additional Amounts, if any.

            (c) Distributions on the Trust Securities shall be made by the
      Property Trustee from the Payment Account and shall be payable on each
      Distribution Date only to the extent that the Trust has funds then on hand
      and available in the Payment Account for the payment of such
      Distributions.

            (d) Distributions on the Trust Securities with respect to a
      Distribution Date shall be payable to the Holders thereof as they appear
      on the Securities Register for the Trust Securities on the relevant record
      date, which shall be one Business Day prior to such Distribution Date;
      provided, however, that in the event that the Preferred Securities do not
      remain in book-entry-only form, the relevant record date shall be the date
      15 days prior to the relevant Distribution Date.

                                       18

      Section 4.2 Redemption.

            (a) On each Debenture Redemption Date and on the stated maturity of
      the Debentures, the Trust will be required to redeem a Like Amount of
      Trust Securities at the Redemption Price.

            (b) Notice of redemption shall be given by the Property Trustee by
      first-class mail, postage prepaid, mailed not less than 30 nor more than
      60 days prior to the Redemption Date to each Holder of Trust Securities to
      be redeemed, at such Holder's address appearing in the Security Register.
      All notices of redemption shall state:

                  (i) the Redemption Date;

                  (ii) the Redemption Price;

                  (iii) the CUSIP number;

                  (iv) if less than all the Outstanding Trust Securities are to
            be redeemed, the identification and the total Liquidation Amount of
            the particular Trust Securities to be redeemed; and

                  (v) that on the Redemption Date the Redemption Price will
            become due and payable upon each such Trust Security to be redeemed
            and that distributions thereon will cease to accrue on and after
            said date.

            (c) The Trust Securities redeemed on each Redemption Date shall be
      redeemed at the Redemption Price with the proceeds from the
      contemporaneous redemption of Debentures. Redemptions of the Trust
      Securities shall be made and the Redemption Price shall be payable on each
      Redemption Date only to the extent that the Trust has funds then on hand
      and available in the Payment Account for the payment of such Redemption
      Price.

            (d) If the Property Trustee gives a notice of redemption in respect
      of any Preferred Securities, then, by 12:00 noon, New York time, on the
      Redemption Date, subject to Section 4.2(c), the Property Trustee will, so
      long as the Preferred Securities are in book-entry-only form, irrevocably
      deposit with the Clearing Agency for the Preferred Securities funds
      sufficient to pay the applicable Redemption Price and will give such
      Clearing Agency irrevocable instructions and authority to pay the
      Redemption Price to the holders thereof. If the Preferred Securities are
      no longer in book-entry-only form, the Property Trustee, subject to
      Section 4.2(c), will irrevocably deposit with the Paying Agent funds
      sufficient to pay the applicable Redemption Price and will give the Paying
      Agent irrevocable instructions and authority to pay the Redemption Price
      to the holders thereof upon

                                       19

      surrender of their Preferred Securities Certificates. Notwithstanding the
      foregoing, Distributions payable on or prior to the Redemption Date for
      any Trust Securities called for redemption shall be payable to the Holders
      of such Trust Securities as they appear on the Register for the Trust
      Securities on the relevant record dates for the related Distribution
      Dates. If notice of redemption shall have been given and funds deposited
      as required, then upon the date of such deposit, all rights of
      Securityholders holding Trust Securities so called for redemption will
      cease, except the right of such Securityholders to receive the Redemption
      Price, but without interest, and such Securities will cease to be
      outstanding. In the event that any date on which any Redemption Price is
      payable is not a Business Day, then payment of the Redemption Price
      payable on such date will be made on the next succeeding day which is a
      Business Day (and without any interest or other payment in respect of any
      such delay), except that, if such Business Day falls in the next calendar
      year, such payment will be made on the immediately preceding Business Day,
      in each case, with the same force and effect as if made on such date. In
      the event that payment of the Redemption Price in respect of any Trust
      Securities called for redemption is improperly withheld or refused and not
      paid either by the Trust or by the Depositor pursuant to the Guarantee,
      Distributions on such Trust Securities will continue to accrue, at the
      then applicable rate, from the Redemption Date originally established by
      the Trust for such Trust Securities to the date such Redemption Price is
      actually paid, in which case the actual payment date will be the date
      fixed for redemption for purposes of calculating the Redemption Price.

            (e) Payment of the Redemption Price on the Trust Securities shall be
      made to the recordholders thereof as they appear on the Securities
      Register for the Trust Securities on the relevant record date, which shall
      be one Business Day prior to the relevant Redemption Date; provided,
      however, that in the event that the Preferred Securities do not remain in
      book-entry-only form, the relevant record date shall be the fifteenth day
      prior to the Redemption Date.

            (f) If less than all the Outstanding Trust Securities are to be
      redeemed on a Redemption Date, then the aggregate Liquidation Amount of
      Trust Securities to be redeemed shall be allocated on a pro rata basis
      (based on Liquidation Amounts) among the Common Securities and the
      Preferred Securities. The particular Preferred Securities to be redeemed
      shall be selected on a pro rata basis (based upon Liquidation Amounts) not
      more than 60 days prior to the Redemption Date by the Property Trustee
      from the Outstanding Preferred Securities not previously called for
      redemption, by such method as the Property Trustee shall deem fair and
      appropriate and which may provide for the selection for redemption of
      portions (equal to $25 or an integral multiple of $25 in excess thereof)
      of the Liquidation Amount of Preferred Securities of a denomination larger
      than $25. The Property Trustee shall promptly notify the Security
      Registrar in writing of the

                                       20

      Preferred Securities selected for redemption and, in the case of any
      Preferred Securities selected for partial redemption, the Liquidation
      Amount thereof to be redeemed. For all purposes of this Trust Agreement,
      unless the context otherwise requires, all provisions relating to the
      redemption of Preferred Securities shall relate, in the case of any
      Preferred Securities redeemed or to be redeemed only in part, to the
      portion of the Liquidation Amount of Preferred Securities which has been
      or is to be redeemed.

      Section 4.3 Subordination of Common Securities.

            (a) Payment of Distributions (including Additional Amounts, if
      applicable) on, and the Redemption Price of, the Trust Securities, as
      applicable, shall be made pro rata based on the Liquidation Amount of the
      Trust Securities; provided, however, that if on any Distribution Date or
      Redemption Date a Debenture Event of Default shall have occurred and be
      continuing, no payment of any Distribution (including Additional Amounts,
      if applicable) on, or Redemption Price of, any Common Security, and no
      other payment on account of the redemption, liquidation or other
      acquisition of Common Securities, shall be made unless payment in full in
      cash of all accumulated and unpaid Distributions (including Additional
      Amounts, if applicable) on all Outstanding Preferred Securities for all
      distribution periods terminating on or prior thereto, or in the case of
      payment of the Redemption Price the full amount of such Redemption Price
      on all Outstanding Preferred Securities, shall have been made or provided
      for, and all funds immediately available to the Property Trustee shall
      first be applied to the payment in full in cash of all Distributions
      (including Additional Amounts, if applicable) on, or Redemption Price of,
      Preferred Securities then due and payable.

            (b) In the case of the occurrence of any Debenture Event of Default,
      the Holder of Common Securities will be deemed to have waived any right to
      act with respect to any such Event of Default under this Trust Agreement
      until the effect of all such Events of Default with respect to the
      Preferred Securities have been cured, waived or otherwise eliminated.
      Until any such Event of Default under this Trust Agreement with respect to
      the Preferred Securities have been so cured, waived or otherwise
      eliminated, the Property Trustee shall act solely on behalf of the Holders
      of the Preferred Securities and not the Holder of the Common Securities,
      and only the Holders of the Preferred Securities will have the right to
      direct the Property Trustee to act on their behalf.

      Section 4.4 Payment Procedures.

      Payments in respect of the Preferred Securities shall be made by check
mailed to the address of the Person entitled thereto as such address shall
appear on the Securities Register or, if the Preferred Securities are held by a
Clearing Agency, such Distributions

                                       21

shall be made to the Clearing Agency in immediately available funds, which shall
credit the relevant Persons' accounts at such Clearing Agency on the applicable
distribution dates. Payments in respect of the Common Securities shall be made
in such manner as shall be mutually agreed between the Property Trustee and the
Common Securityholder.

      Section 4.5 Tax Returns and Reports.

      The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all Federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared or filed) the appropriate Internal Revenue Service Form
required to be filed in respect of the Trust in each taxable year of the Trust
and (b) prepare and furnish (or cause to be prepared and furnished) to each
Securityholder the appropriate Internal Revenue Service form required to be
furnished to such Securityholder or the information required to be provided on
such form. The Administrative Trustees shall provide the Depositor and the
Property Trustee with a copy of all such returns, reports and schedules promptly
after such filing or furnishing. The Trustees shall comply with United States
federal withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Securityholders under the Trust
Securities.

      Section 4.6 Payment of Taxes, Duties, Etc. of the Trust.

      Upon receipt under the Debentures of Additional Sums (as defined in the
Indenture), the Property Trustee shall upon receipt of written notice from the
applicable governmental authority promptly pay any taxes, duties or governmental
charges of whatsoever nature (other than withholding taxes) imposed on the Trust
by the United States or any other taxing authority.

      Section 4.7 Payments under Indenture.

      Any amount payable hereunder to any Holder of Preferred Securities (and
any Owner with respect thereto) shall be reduced by the amount of any
corresponding payment such Holder (and Owner) has directly received pursuant to
Section 508 of the Indenture.

                                    ARTICLE V
                          TRUST SECURITIES CERTIFICATES

      Section 5.1 Initial Ownership.

      Upon the formation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no

                                       22

Trust Securities are outstanding, the Depositor shall be the sole beneficial
owner of the Trust.

      Section 5.2 The Trust Securities Certificates.

      The Preferred Securities Certificates shall be issued in minimum
denominations of $25 Liquidation Amount and integral multiples of $25 in excess
thereof, and the Common Securities Certificates shall be issued in denominations
of $25 Liquidation Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.4.

      Section 5.3 Delivery of Trust Securities Certificates.

      On the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or
upon the written order of the Depositor, signed by its chairman, president,
chief executive officer, any senior vice president or any vice president,
treasurer or assistant treasurer or controller without further corporate action
by the Depositor, in authorized denominations.

      Section 5.4 Registration of Transfer and Exchange of Preferred Securities
                  Certificates.

      The Securities Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 5.8, a Securities Register in which,
subject to such reasonable regulations as it may prescribe, the Securities
Registrar shall provide for the registration of Preferred Securities
Certificates and Common Securities Certificates (subject to Section 5.10 in the
case of the Common Securities Certificates) and registration of transfers and
exchanges of Preferred Securities Certificates as herein provided. The Property
Trustee shall be the initial Securities Registrar. The provisions of Sections
8.1, 8.3 and 8.6 shall apply to the Property Trustee also in its role as
Securities Registrar, for so long as the Property Trustee shall act as
Securities Registrar and, to the extent applicable, to any other securities
registrar appointed hereunder. Any

                                       23

reference in this Trust Agreement to the Securities Registrar shall include any
co-securities registrar unless the context requires otherwise.

      Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrative Trustee or
Trustees. The Securities Registrar shall not be required to register the
transfer of any Preferred Securities that have been called for redemption. At
the option of a Holder, Preferred Securities Certificates may be exchanged for
other Preferred Securities Certificates in authorized denominations of the same
class and of a like aggregate Liquidation Amount upon surrender of the Preferred
Securities Certificates to be exchanged at the office or agency maintained
pursuant to Section 5.8.

      Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Administrative Trustees and
the Securities Registrar duly executed by the Holder or his attorney duly
authorized in writing. Each Preferred Securities Certificate surrendered for
registration of transfer or exchange shall be cancelled and subsequently
disposed of by the Administrative Trustees in accordance with their customary
practice.

      No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.

      Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities
                  Certificates.

      If (a) any mutilated Trust Securities Certificate shall be surrendered to
the Securities Registrar, or if the Securities Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Administrative Trustees such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Securities Certificate shall have been acquired by a protected purchaser, the
Administrative Trustees, or any one of them, on behalf of the Trust shall
execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like class, tenor and denomination. In connection with
the issuance of any new Trust Securities Certificate under this Section, the
Administrative Trustees or the Securities Registrar may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Trust

                                       24

Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an undivided beneficial interest in the assets of the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Trust Securities Certificate shall be found at any time.

      Section 5.6  Persons Deemed Securityholders.

      The Administrative Trustees or the Securities Registrar shall treat the
Person in whose name any Trust Securities Certificate shall be registered in the
Securities Register as the owner of such Trust Securities Certificate for the
purpose of receiving distributions and for all other purposes whatsoever, and
neither the Trustees nor the Securities Registrar shall be bound by any notice
to the contrary.

      Section 5.7 Access to List of Securityholders' Names and Addresses.

      The Administrative Trustees or the Depositor shall furnish or cause to be
furnished (a) to the Property Trustee, semi-annually on or before January 15 and
July 15 in each year, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Securityholders as of the
most recent Record Date and (b) to the Property Trustee, promptly after receipt
by any Administrative Trustee or the Depositor of a request therefor from the
Property Trustee in order to enable the Property Trustee to discharge its
obligations under this Trust Agreement, in each case to the extent such
information is in the possession or control of the Administrative Trustees or
the Depositor and is not identical to a previously supplied list or has not
otherwise been received by the Property Trustee in its capacity as Securities
Registrar. The rights of Securityholders to communicate with other
Securityholders with respect to their rights under this Trust Agreement or under
the Trust Securities, and the corresponding rights of the Trustee shall be as
provided in the Trust Indenture Act. Each Holder, by receiving and holding a
Trust Securities Certificate, and each Owner shall be deemed to have agreed not
to hold the Depositor, the Property Trustee or the Administrative Trustees
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.

      Section 5.8 Maintenance of Office or Agency.

      The Administrative Trustees shall maintain in The City of New York, an
office or offices or agency or agencies where Preferred Securities Certificates
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Trustees in respect of the Trust Securities
Certificates may be served. The Administrative Trustees initially designate -,
as its principal corporate trust office for such purposes. The Property Trustee
shall give prompt written notice to the Depositor and to the Securityholders of
any change in the location of the Securities Register or any such office or
agency.

                                       25

      Section 5.9 Appointment of Paying Agent.

      The Paying Agent shall make distributions to Securityholders from the
Payment Account and shall report the amounts of such distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying Agent
shall initially be the Property Trustee, and any co-paying agent chosen by the
Property Trustee, and acceptable to the Administrative Trustees and the
Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees, the
Property Trustee and the Depositor. In the event that the Property Trustee shall
no longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Depositor to act as
Paying Agent (which shall be a bank or trust company). The Administrative
Trustees shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Administrative Trustees to execute and deliver to the Trustees
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Trustees that as Paying Agent, such successor Paying Agent
or additional Paying Agent will hold all sums, if any, held by it for payment to
the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 shall apply to
the Property Trustee also in its role as Paying Agent, for so long as the
Property Trustee shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Trust Agreement to
the Paying Agent shall include any co-paying agent unless the context requires
otherwise.

      Section 5.10 Ownership of Common Securities by Depositor.

      On the Closing Date and on each other date provided for in Section 2.5,
the Depositor shall acquire and retain beneficial and record ownership of the
Common Securities. To the fullest extent permitted by law, except as otherwise
permitted under the Indenture, any attempted transfer of the Common Securities
shall be void. The Administrative Trustees shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating "THIS
CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE TRUST AGREEMENT (AS
DEFINED BELOW)".

                                       26

      Section 5.11 Book-Entry Preferred Securities Certificates; Common
                   Securities Certificate.

            (a) The Preferred Securities Certificates, upon original issuance,
      will be issued in the form of a typewritten Preferred Securities
      Certificate or Certificates representing Book-Entry Preferred Securities
      Certificates, to be delivered to The Depository Trust Company, the initial
      Clearing Agency, by, or on behalf of, the Trust. Such Preferred Securities
      Certificate or Certificates shall initially be registered on the
      Securities Register in the name of Cede & Co., the nominee of the initial
      Clearing Agency, and no beneficial owner will receive a Definitive
      Preferred Securities Certificate representing such beneficial owner's
      interest in such Preferred Securities, except as provided in Section 5.13.
      Unless and until Definitive Preferred Securities Certificates have been
      issued to beneficial owners pursuant to Section 5.13:

                  (i) the provisions of this Section 5.11(a) shall be in full
            force and effect;

                  (ii) the Securities Registrar and the Trustees shall be
            entitled to deal with the Clearing Agency for all purposes of this
            Trust Agreement relating to the Book-Entry Preferred Securities
            Certificates (including the payment of principal of and interest on
            the Book-Entry Preferred Securities and the giving of instructions
            or directions to Owners of Book-Entry Preferred Securities) as the
            sole Holder of Book-Entry Preferred Securities and shall have no
            obligations to the Owners thereof;

                  (iii) to the extent that the provisions of this Section 5.11
            conflict with any other provisions of this Trust Agreement, the
            provisions of this Section 5.11 shall control; and

                  (iv) the rights of the Owners of the Book-Entry Preferred
            Securities Certificates shall be exercised only through the Clearing
            Agency and shall be limited to those established by law and
            agreements between such Owners and the Clearing Agency and/or the
            Clearing Agency Participants. Pursuant to the Certificate Depository
            Agreement, unless and until Definitive Preferred Securities
            Certificates are issued pursuant to Section 5.13, the initial
            Clearing Agency will make book-entry transfers among the Clearing
            Agency Participants and receive and transmit payments on the
            Preferred Securities to such Clearing Agency Participants.

                                       27

            (b) A single Common Securities Certificate representing the Common
      Securities shall be issued to the Depositor in the form of a definitive
      Common Securities Certificate.

      Section 5.12 Notices to Clearing Agency.

      To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.

      Section 5.13 Definitive Preferred Securities Certificates.

      If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option advises
the Trustees in writing that it elects to terminate the book-entry system
through the Clearing Agency or (c) after the occurrence of a Debenture Event of
Default, Owners of Preferred Securities Certificates representing beneficial
interests aggregating at least a majority of the Liquidation Amount advise the
Clearing Agency in writing that the continuation of a book-entry system through
the Clearing Agency is no longer in the best interest of the Owners of Preferred
Securities Certificates, then the Clearing Agency shall notify all Owners of
Preferred Securities Certificates and the Trustees of the occurrence of any such
event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Administrative Trustees of the typewritten Preferred
Securities Certificate or Certificates representing the Book Entry Preferred
Securities Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute the
Definitive Preferred Securities Certificates in accordance with the instructions
of the Clearing Agency. Neither the Securities Registrar nor the Trustees shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Preferred Securities Certificates, the Trustees shall
recognize the Holders of the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred Securities Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.

                                       28

      Section 5.14 Rights of Securityholders.

      The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust Securities
shall have no preemptive or similar rights and when issued and delivered to
Securityholders against payment of the purchase price therefor will be fully
paid and nonassessable by the Trust. The Holders of the Trust Securities, in
their capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.

                                   ARTICLE VI
                    ACTS OF SECURITYHOLDERS; MEETINGS; VOTING

      Section 6.1 Limitations on Voting Rights.

            (a) Except as provided in this Section, in Sections 8.10 and 10.2
      and in the Indenture and as otherwise required by law, no Holder of
      Preferred Securities shall have any right to vote or in any manner
      otherwise control the administration, operation and management of the
      Trust or the obligations of the parties hereto, nor shall anything herein
      set forth, or contained in the terms of the Trust Securities Certificates,
      be construed so as to constitute the Securityholders from time to time as
      partners or members of an association.

            (b) So long as any Debentures are held by the Property Trustee, the
      Trustees shall not (i) direct the time, method and place of conducting any
      proceeding for any remedy available to the Debenture Trustee, or executing
      any trust or power conferred on the Debenture Trustee with respect to such
      Debentures, (ii) waive any past default which is waivable under Section
      5.13 of the Indenture, (iii) exercise any right to rescind or annul a
      declaration that the principal of all the Debentures shall be due and
      payable or (iv) consent to any amendment, modification or termination of
      the Indenture or the Debentures, where such consent shall be required,
      without, in each case, obtaining the prior approval of the Holders of at
      least a majority in Liquidation Amount of all outstanding Preferred
      Securities; provided, however, that where a consent under the Indenture
      would require the consent of each holder of Debentures affected thereby,
      no such consent shall be given by the Property Trustee without the prior
      written consent of each holder of Preferred Securities. The Trustees shall
      not revoke any action previously authorized or approved by a vote of the
      Preferred Securities, except by a subsequent vote of the Preferred

                                       29

      Securities. The Property Trustee shall notify all Holders of the Preferred
      Securities of any notice of default received from the Debenture Trustee
      with respect to the Debentures. In addition to obtaining the foregoing
      approvals of the Holders of the Preferred Securities, prior to taking any
      of the foregoing actions, the Trustees shall, at the expense of the
      Depositor, obtain an Opinion of Counsel experienced in such matters to the
      effect that the Trust will not be classified as an association taxable as
      a corporation or partnership for United States federal income tax purposes
      on account of such action.

            (c) If any proposed amendment to the Trust Agreement provides for,
      or the Trustees otherwise propose to effect, (i) any action that would
      adversely affect in any material respect the powers, preferences or
      special rights of the Preferred Securities, whether by way of amendment to
      the Trust Agreement or otherwise, or (ii) the dissolution, winding-up or
      termination of the Trust, other than pursuant to the terms of this Trust
      Agreement, then the Holders of Outstanding Preferred Securities as a class
      will be entitled to vote on such amendment or proposal and such amendment
      or proposal shall not be effective except with the approval of the Holders
      of at least a majority in Liquidation Amount of the Outstanding Preferred
      Securities.

      Section 6.2 Notice of Meetings.

      Notice of all meetings of the Preferred Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Property Trustee upon
receipt of written notice of the calling of such meeting from the Administrative
Trustees pursuant to Section 10.8 to each Preferred Securityholder of record, at
his registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.

      Section 6.3 Meetings of Preferred Securityholders.

      No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
record of 25% of the Preferred Securities (based upon their Liquidation Amount)
and the Administrative Trustees or the Property Trustee may, at any time in
their discretion, call a meeting of Preferred Securityholders to vote on any
matters as to which Preferred Securityholders are entitled to vote.

                                       30

      Preferred Securityholders of record of 50% of the Preferred Securities
(based upon their Liquidation Amount), present in person or by proxy, shall
constitute a quorum at any meeting of Securityholders.

      If a quorum is present at a meeting, an affirmative vote by the Preferred
Securityholders of record present, in person or by proxy, holding more than a
majority of the Preferred Securities (based upon their Liquidation Amount) held
by the Preferred Securityholders of record present, either in person or by
proxy, at such meeting shall constitute the action of the Securityholders,
unless this Trust Agreement requires a greater number of affirmative votes.

      Section 6.4 Voting Rights.

      Securityholders shall be entitled to one vote for each $25 of Liquidation
Amount represented by their Trust Securities in respect of any matter as to
which such Securityholders are entitled to vote.

      Section 6.5 Proxies, etc.

      At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of the Property Trustee, proxies may be solicited in
the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When Trust
Securities are held jointly by several persons, any one of them may vote at any
meeting in person or by proxy in respect of such Trust Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust Securities. A
proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.

      Section 6.6 Securityholder Action by Written Consent.

      Any action which may be taken by Securityholders at a meeting may be taken
without prior notice and without a meeting if Securityholders holding more than
a majority of all Outstanding Trust Securities (based upon their Liquidation
Amount) entitled to vote in respect of such action (or such larger proportion
thereof as shall be required by any express provision of this Trust Agreement)
shall consent to the action in writing.

                                       31

      Section 6.7 Record Date for Voting and Other Purposes.

      For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, Administrative Trustees may from time to time fix a date, not more
than 90 days prior to the date of any meeting of Securityholders or the payment
of distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.

      Section 6.8 Acts of Securityholders.

      Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be given, made or
taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.

      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 shall 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 any Trustee receiving the same deems sufficient.

      The ownership of Preferred Securities shall be proved by the Securities
Register.

      Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of

                                       32

anything done, omitted or suffered to be done by the Trustees or the Trust in
reliance thereon, whether or not notation of such action is made upon such Trust
Security.

      Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust 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 part of such liquidation amount.

      If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the dispute shall be submitted to an
independent legal counsel which has not provided significant services to any of
the disputing parties in the past two years (the "Independent Legal Counsel"),
and reasonably satisfactory to the disputing parties, for determination of such
matter. The Independent Legal Counsel's determination shall be conclusive and
binding with respect to such matter.

      Section 6.9 Inspection of Records.

      Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.

                                  ARTICLE VII.
                         REPRESENTATIONS AND WARRANTIES

      Section 7.1 Representations and Warranties of the Bank, the Property
                  Trustee and the Delaware Trustee.

      The Bank, the Property Trustee and the Delaware Trustee, each severally on
behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Securityholders that:

            (a) the Bank is a banking corporation duly organized, validly
      existing and in good standing under the laws of the State of Delaware;

            (b) the Bank has full corporate power, authority and legal right to
      execute, deliver and perform its obligations under this Trust Agreement
      and has taken all necessary action to authorize the execution, delivery
      and performance by it of this Trust Agreement;

                                       33

            (c) this Trust Agreement has been duly authorized, executed and
      delivered by the Bank and constitutes the valid and legally binding
      agreement of the Bank enforceable against it in accordance with its terms,
      subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
      moratorium and similar laws of general applicability relating to or
      affecting creditors' rights and to general equity principles;

            (d) the execution, delivery and performance by the Bank of this
      Trust Agreement have been duly authorized by all necessary corporate or
      other action on the part of the Bank and do not require any approval of
      stockholders of the Bank and such execution, delivery and performance will
      not (i) violate the Bank's Charter or - By-laws, (ii) violate any
      provision of, or constitute, with or without notice or lapse of time, a
      default under, or result in the creation or imposition of, any Lien on any
      properties included in the Trust Property pursuant to the provisions of,
      any indenture, mortgage, credit agreement, license or other agreement or
      instrument to which the Bank is a party or by which it is bound (other
      than as contemplated by the Trust Agreement, the Indenture and the
      Guarantee), or (iii) violate any law, governmental rule or regulation of
      the United States or the State of Delaware, as the case may be, governing
      the banking or trust powers of the Bank or any order, judgment or decree
      applicable to the Bank;

            (e) the execution, delivery and performance by the Property Trustee
      of this Trust Agreement have been duly authorized by all necessary
      corporate or other action on the part of the Property Trustee and do not
      require any approval of stockholders of the Property Trustee and such
      execution, delivery and performance will not (i) violate the Property
      Trustee's Charter or By-laws, (ii) violate any provision of, or
      constitute, with or without notice or lapse of time, a default under, or
      result in the creation or imposition of, any Lien on any properties
      included in the Trust Property pursuant to the provisions of, any
      indenture, mortgage, credit agreement, license or other agreement or
      instrument to which the Property Trustee is a party or by which it is
      bound (other than as contemplated by the Trust Agreement, the Indenture
      and the Guarantee), or (iii) violate any law, governmental rule or
      regulation of the United States or the State of Delaware, as the case may
      be, governing the banking or trust powers of the Property Trustee or any
      order, judgment or decree applicable to the Property Trustee;

            (f) the execution, delivery and performance by the Delaware Trustee
      of this Trust Agreement have been duly authorized by all necessary
      corporate or other action on the part of the Delaware Trustee and do not
      require any approval of stockholders of the Delaware Trustee and such
      execution, delivery and performance will not (i) violate the Delaware
      Trustee's Charter or By-laws, (ii) violate any provision of, or
      constitute, with or without notice or lapse of time,

                                       34

      a default under, or result in the creation or imposition of, any Lien on
      any properties included in the Trust Property pursuant to the provisions
      of, any indenture, mortgage, credit agreement, license or other agreement
      or instrument to which the Delaware Trustee is a party or by which it is
      bound (other than as contemplated by the Trust Agreement, the Indenture
      and the Guarantee), or (iii) violate any law, governmental rule or
      regulation of the United States or the State of Delaware, as the case may
      be, governing the banking or trust powers of the Delaware Trustee or any
      order, judgment or decree applicable to the Delaware Trustee;

            (g) neither the authorization, execution or delivery by the Bank of
      this Trust Agreement nor the consummation of any of the transactions by
      the Bank contemplated herein or therein requires the consent or approval
      of, the giving of notice to, the registration with or the taking of any
      other action with respect to any governmental authority or agency under
      any existing federal law governing the banking or trust powers of the Bank
      under the laws of the United States or the State of Delaware (other than
      as contemplated by the Trust Agreement, the Indenture and the Guarantee);

            (h) neither the authorization, execution or delivery by the Property
      Trustee of this Trust Agreement nor the consummation of any of the
      transactions by the Property Trustee contemplated herein or therein
      requires the consent or approval of, the giving of notice to, the
      registration with or the taking of any other action with respect to any
      governmental authority or agency under any existing federal law governing
      the banking or trust powers of the Property Trustee under the laws of the
      United States or the State of Delaware (other than as contemplated by the
      Trust Agreement, the Indenture and the Guarantee);

            (i) neither the authorization, execution or delivery by the Delaware
      Trustee of this Trust Agreement nor the consummation of any of the
      transactions by the Delaware Trustee contemplated herein or therein
      requires the consent or approval of, the giving of notice to, the
      registration with or the taking of any other action with respect to any
      governmental authority or agency under any existing federal law governing
      the banking or trust powers of the Delaware Trustee under the laws of the
      United States or the State of Delaware (other than as contemplated by the
      Trust Agreement, the Indenture and the Guarantee); and

            (j) there are no proceedings pending or, to the best of each of the
      Bank's, the Property Trustee's and the Delaware Trustee's knowledge,
      threatened against or affecting the Bank, the Property Trustee or the
      Delaware Trustee in any court or before any governmental authority, agency
      or arbitration board or tribunal which, individually or in the aggregate,
      would materially and adversely affect the Trust or would question the
      right, power and authority of the Bank to

                                       35

      enter into or perform its obligations as one of the Trustees under this
      Trust Agreement.

      Section 7.2 Representations and Warranties of Depositor.

      The Depositor hereby represents and warrants for the benefit of the
Securityholders that:

            (a) the Trust Securities Certificates issued on the Closing Date on
      behalf of the Trust have been duly authorized and will have been, duly and
      validly executed, issued and delivered by the Trustees pursuant to the
      terms and provisions of, and in accordance with the requirements of, this
      Trust Agreement and the Securityholders will be, as of such date, entitled
      to the benefits of this Trust Agreement; and

            (b) there are no taxes, fees or other governmental charges payable
      by the Trust (or the Trustees on behalf of the Trust) under the laws of
      the State of Delaware or any political subdivision thereof in connection
      with the execution, delivery and performance by the Bank, the Property
      Trustee or the Delaware Trustee, as the case may be, of this Trust
      Agreement.

                                  ARTICLE VIII
                                  THE TRUSTEES

      Section 8.1 Certain Duties and Responsibilities.

            (a) The duties and responsibilities of the Trustees shall be as
      provided by this Trust Agreement and, in the case of the Property Trustee,
      by the Trust Indenture Act. Notwithstanding the foregoing, no provision of
      this Trust Agreement shall require the Trustees to expend or risk their
      own funds or otherwise incur any financial liability in the performance of
      any of their duties hereunder, or in the exercise of any of their rights
      or powers, if they 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 Trust Agreement relating to
      the conduct or affecting the liability of or affording protection to the
      Trustees shall be subject to the provisions of this Section. Nothing in
      this Trust Agreement shall be construed to release the Property Trustee
      from liability for its own negligent action, its own failure to act, or
      its own willful misconduct. To the extent that, at law or in equity, an
      Administrative Trustee has duties (including fiduciary duties) and
      liabilities relating thereto to the Trust or to the Securityholders, such
      Administrative Trustee shall not be liable to the Trust or to any
      Securityholder for such Trustee's good faith reliance on the provisions of
      this

                                       36

      Trust Agreement. The provisions of this Trust Agreement, to the extent
      that they restrict the duties and liabilities of the Administrative
      Trustees otherwise existing at law or in equity, are agreed by the
      Depositor and the Securityholders to replace such other duties and
      liabilities of the Administrative Trustees.

            (b) All payments made by the Property Trustee or a Paying Agent in
      respect of the Trust Securities shall be made only from the revenue and
      proceeds from the Trust Property and only to the extent that there shall
      be sufficient revenue or proceeds from the Trust Property to enable the
      Property Trustee or a Paying Agent to make payments in accordance with the
      terms hereof. Each Securityholder, by its acceptance of a Trust Security,
      agrees that it will look solely to the revenue and proceeds from the Trust
      Property to the extent legally available for distribution to it as herein
      provided and that the Trustees are not personally liable to it for any
      amount distributable in respect of any Trust Security or for any other
      liability in respect of any Trust Security. This Section 8.1(b) does not
      limit the liability of the Trustees expressly set forth elsewhere in this
      Trust Agreement or, in the case of the Property Trustee, in the Trust
      Indenture Act.

            (c) No provision of this Trust Agreement shall be construed to
      relieve the Property Trustee from liability for its own negligent action,
      its own negligent failure to act, or its own willful misconduct, except
      that:

                  (i) the Property Trustee shall not be liable for any error of
            judgment made in good faith by an authorized officer of the Property
            Trustee, unless it shall be proved that the Property Trustee was
            negligent in ascertaining the pertinent facts;

                  (ii) the Property Trustee shall not be liable with respect to
            any action taken or omitted to be taken by it in good faith in
            accordance with the direction of the holders of not less than a
            majority in Liquidation Amount of the Trust Securities relating to
            the time, method and place of conducting any proceeding for any
            remedy available to the Property Trustee, or exercising any trust or
            power conferred upon the Property Trustee under this Trust
            Agreement;

                  (iii) the Property Trustee's sole duty with respect to the
            custody, safe keeping and physical preservation of the Debentures
            and the Payment Account shall be to deal with such Property in a
            similar manner as the Property Trustee deals with similar property
            for its own account, subject to the protections and limitations on
            liability afforded to the Property Trustee under this Trust
            Agreement and the Trust Indenture Act;

                                       37

                  (iv) the Property Trustee shall not be liable for any interest
            on any money received by it except as it may otherwise agree with
            the Depositor. Money held by the Property Trustee need not be
            segregated from other funds held by it except in relation to the
            Payment Account maintained by the Property Trustee pursuant to
            Section 3.1 and except to the extent otherwise required by law; and

                  (v) the Property Trustee shall not be responsible for
            monitoring the compliance by the Administrative Trustees or the
            Depositor with their respective duties under this Trust Agreement,
            nor shall the Property Trustee be liable for the default or
            misconduct of the Administrative Trustees or the Depositor.

      Section 8.2 Notice of Defaults.

      Within five Business Days after the occurrence of any Event of Default
actually known to a Responsible Officer of the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided in Section
10.8, notice of such Event of Default to the Securityholders, the Administrative
Trustees and the Depositor, unless such Event of Default shall have been cured
or waived.

      Within five Business Days after the receipt of notice of the Depositor's
exercise of its right to extend the interest payment period for the Debentures
pursuant to the Indenture, the Administrative Trustee shall transmit, in the
manner and to the extent provided in Section 10.8, notice of such exercise to
the Securityholders and the Property Trustee, unless such exercise shall have
been revoked.

      Section 8.3 Certain Rights of Property Trustee.

      Subject to the provisions of Section 8.1:

            (a) the Property Trustee may rely and shall be protected in acting
      or refraining from acting in good faith upon any resolution, Opinion of
      Counsel, certificate, written representation of a Holder or transferee,
      certificate of auditors or any other certificate, statement, instrument,
      opinion, report, notice, request, consent, order, appraisal, 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) if, (i) in performing its duties under this Trust Agreement the
      Property Trustee is required to decide between alternative courses of
      action or (ii) in construing any of the provisions in this Trust Agreement
      the Property Trustee finds the same ambiguous or inconsistent with any
      other provisions contained herein or (iii) the Property Trustee is unsure
      of the application of any provision of

                                       38

      this Trust Agreement, then, except as to any matter as to which the
      Preferred Securityholders are entitled to vote under the terms of this
      Trust Agreement, the Property Trustee shall deliver a notice to the
      Depositor requesting written instructions of the Depositor as to the
      course of action to be taken. The Property Trustee shall take such action,
      or refrain from taking such action, as the Property Trustee shall be
      instructed in writing to take, or to refrain from taking, by the
      Depositor; provided, however, that if the Property Trustee does not
      receive such instructions of the Depositor within ten Business Days after
      it has delivered such notice, or such reasonably shorter period of time
      set forth in such notice (which to the extent practicable shall not be
      less than two Business Days), it may, but shall be under no duty to, take
      or refrain from taking such action not inconsistent with this Trust
      Agreement as it shall deem advisable and in the best interests of the
      Securityholders, in which event the Property Trustee shall have no
      liability except for its own bad faith, negligence or willful misconduct;

            (c) any direction or act of the Depositor or the Administrative
      Trustees contemplated by this Trust Agreement shall be sufficiently
      evidenced by an Officer's Certificate;

            (d) whenever in the administration of this Trust Agreement, the
      Property Trustee shall deem it desirable that a matter be established
      before undertaking, suffering or omitting any action hereunder, the
      Property Trustee (unless other evidence is herein specifically prescribed)
      may, in the absence of bad faith on its part, request and rely upon an
      Officer's Certificate which, upon receipt of such request, shall be
      promptly delivered by the Depositor or the Administrative Trustees;

            (e) the Property Trustee shall have no duty to see to any recording,
      filing or registration of any instrument (including any financing or
      continuation statement or any filing under tax or securities laws) or any
      rerecording, refiling or reregistration thereof;

            (f) the Property Trustee may consult with counsel and the advice of
      such counsel shall be full and complete authorization and protection in
      respect of any action taken, suffered or omitted by it hereunder in good
      faith and in reliance thereon and in accordance with such advice, such
      counsel may be counsel to the Depositor or any of its Affiliates, and may
      include any of its employees. The Property Trustee shall have the right at
      any time to seek instructions concerning the administration of this Trust
      Agreement from any court of competent jurisdiction;

            (g) the Property Trustee shall be under no obligation to exercise
      any of the rights or powers vested in it by this Trust Agreement at the
      request or

                                       39

      direction of any of the Securityholders pursuant to this Trust Agreement,
      unless such Securityholders shall have offered to the Property Trustee
      reasonable security or indemnity against the costs, expenses and
      liabilities which might be incurred by it in compliance with such request
      or direction;

            (h) the Property Trustee shall not be bound to make any
      investigation into the facts or matters stated in any resolution,
      certificate, statement, instrument, opinion, report, notice, request,
      consent, order, approval, bond, debenture, note or other evidence of
      indebtedness or other paper or document, unless requested in writing to do
      so by one or more Securityholders, but the Property Trustee may make such
      further inquiry or investigation into such facts or matters as it may see
      fit;

            (i) the Property Trustee may execute any of the trusts or powers
      hereunder or perform any duties hereunder either directly or by or through
      its agents or attorneys, and the Property Trustee shall not be responsible
      for any misconduct or negligence on the part of or for the supervision of,
      any such agent or attorney appointed with due care by it hereunder;

            (j) whenever in the administration of this Trust Agreement the
      Property Trustee shall deem it desirable to receive instructions with
      respect to enforcing any remedy or right or taking any other action
      hereunder the Property Trustee (i) may request instructions from the
      Holders of the Trust Securities which instructions may only be given by
      the Holders of the same proportion in Liquidation Amount of the Trust
      Securities as would be entitled to direct the Property Trustee under the
      terms of the Trust Securities in respect of such remedy, right or action,
      (ii) may refrain from enforcing such remedy or right or taking such other
      action until such instructions are received, and (iii) shall be fully
      protected in acting in accordance with such instructions;

            (k) except as otherwise expressly provided by this Trust Agreement,
      the Property Trustee shall not be under any obligation to take any action
      that is discretionary under the provisions of this Trust Agreement; and

            (l) the Property Trustee shall not be charged with knowledge of an
      Event of Default unless a Responsible Officer of the Property Trustee
      obtains actual knowledge of such event or the Property Trustee receives
      written notice of such event from any Securityholder, the Depositor or the
      Debenture Trustee.

No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with

                                       40

applicable law, to perform any such act or acts, or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
Property Trustee shall be construed to be a duty.

      Section 8.4 Not Responsible for Recitals or Issuance of Securities.

      The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.

      Section 8.5 May Hold Securities.

      Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.

      Section 8.6 Compensation; Indemnity; Fees.

      The Depositor agrees:

            (a) to pay to the Trustees from time to time reasonable compensation
      for all services rendered by them hereunder (which compensation shall not
      be limited by any provision of law in regard to the compensation of a
      trustee of an express trust);

            (b) except as otherwise expressly provided herein, to reimburse the
      Trustees upon request for all reasonable expenses, disbursements and
      advances incurred or made by the Trustees in accordance with any provision
      of this Trust Agreement (including the reasonable compensation and the
      expenses and disbursements of its agents and counsel), except any such
      expense, disbursement or advance as may be attributable to its negligence
      or bad faith;

            (c) to indemnify each of the Trustees (including in their individual
      capacities) and their officers, directors and employees or any predecessor
      Trustee for, and to hold the Trustees harmless against, any loss, damage,
      claims, liability, penalty or expense incurred without negligence or bad
      faith on its part, arising out of or in connection with the acceptance or
      administration of this Trust Agreement, 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
      (collectively, "Expenses"); and

                                       41

                  (d) to the fullest extent permitted by law, the Expenses
         (including reasonable attorneys' fees and expenses) incurred by a
         Trustee referred to in paragraph (c) of this Section 8.6 shall be paid
         by the Depositor in advance upon receipt of an undertaking by or on
         behalf of such Trustee to repay such amount if it shall ultimately be
         determined that such Trustee is not entitled to be indemnified by the
         Depositor as authorized in this Section 8.6.

         No Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6.

         Section 8.7 Corporate Property Trustee Required; Eligibility of
Trustees.

                  (a) There shall at all times be a Property Trustee hereunder
         with respect to the Trust Securities. The Property Trustee shall 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 $50,000,000. If
         any such Person publishes reports of condition at least annually,
         pursuant to law or to the requirements of its supervising or examining
         authority, then for the purposes of this Section, 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 Property Trustee with respect to the
         Trust Securities shall cease to be eligible in accordance with the
         provisions of this Section, it shall resign immediately in the manner
         and with the effect hereinafter specified in this Article.

                  (b) There shall at all times be one or more Administrative
         Trustees hereunder with respect to the Trust Securities. Each
         Administrative Trustee shall be either a natural person who is at least
         21 years of age or a legal entity that shall act through one or more
         persons authorized to bind that entity.

                  (c) There shall at all times be a Delaware Trustee with
         respect to the Trust Securities. The Delaware Trustee shall either be
         (i) a natural person who is at least 21 years of age and a resident of
         the State of Delaware or (ii) a legal entity with its principal place
         of business in the State of Delaware and that otherwise meets the
         requirements of applicable Delaware law that shall act through one or
         more persons authorized to bind such entity.

         Section 8.8 Conflicting Interests.

         If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall 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 this Trust
Agreement.

                                       42

         Section 8.9 Co-Trustees and Separate Trustee.

         Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall either be (i) a natural person who is at least 21 years of age and
a resident of the United States or (ii) a legal entity with its principal place
of business in the United States that shall act through one or more persons
authorized to bond such entity.

         Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and delivered
by the Depositor.

         Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:

                  (a) The Trust Securities shall be executed and delivered and
         all rights, powers, duties, and obligations hereunder in respect of the
         custody of securities, cash and other personal property held by, or
         required to be deposited or pledged with, the Trustees specified
         hereunder, shall be exercised, solely by such Trustees and not by such
         co-trustee or separate trustee.

                  (b) The rights, powers, duties, and obligations hereby
         conferred or imposed upon the Property Trustee in respect of any
         property covered by such appointment shall be conferred or imposed upon
         and exercised or performed by the Property Trustee or by the Property
         Trustee and such co-trustee or separate trustee jointly, as shall be
         provided in the instrument appointing such co-trustee or separate
         trustee, except to the extent that under any law of any jurisdiction in

                                       43

         which any particular act is to be performed, the Property Trustee shall
         be incompetent or unqualified to perform such act, in which event such
         rights, powers, duties, and obligations shall be exercised and
         performed by such co-trustee or separate trustee.

                  (c) The Property Trustee at any time, by an instrument in
         writing executed by it, with the written concurrence of the Depositor,
         may accept the resignation of or remove any co-trustee or separate
         trustee appointed under this Section, and, in case an Event of Default
         under the Indenture has occurred and is continuing, the Property
         Trustee shall have power to accept the resignation of, or remove, any
         such co-trustee or separate trustee without the concurrence of the
         Depositor. Upon the written request of the Property Trustee, the
         Depositor shall join with the Property Trustee in the execution,
         delivery, and performance of all instruments and agreements necessary
         or proper to effectuate such resignation or removal. A successor to any
         co-trustee or separate trustee so resigned or removed may be appointed
         in the manner provided in this Section.

                  (d) No co-trustee or separate trustee hereunder shall be
         personally liable by reason of any act or omission of the Property
         Trustee, or any other trustee hereunder.

                  (e) The Property Trustee shall not be liable by reason of any
         act of a co-trustee or separate trustee.

                  (f) Any Act of Holders delivered to the Property Trustee shall
         be deemed to have been delivered to each such co-trustee and separate
         trustee.

         Section 8.10 Resignation and Removal; Appointment of Successor.

         No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.

         Any Trustee may resign at any time with respect to the Trust Securities
by giving written notice thereof to the Securityholders. If the instrument of
acceptance by the successor Trustee required by Section 8.11 shall not have been
delivered to the Relevant Trustee within 30 days after the giving of such notice
of resignation, the Relevant Trustee may petition, at the expense of the
Depositor, any court of competent jurisdiction for the appointment of a
successor Relevant Trustee with respect to the Trust Securities.

         Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee

                                       44

or the Delaware Trustee, or both of them, may be removed at such time by Act of
the Holders of a majority in Liquidation Amount of the Preferred Securities,
delivered to the Relevant Trustee (in its individual capacity and on behalf of
the Trust). An Administrative Trustee may be removed by the Common
Securityholder at any time.

         If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees with respect to the Trust Securities and the Trust, and the retiring
Trustee shall comply with the applicable requirements of Section 8.11. If the
Property Trustee or the Delaware Trustee shall resign, be removed or become
incapable of continuing to act as the Property Trustee or the Delaware Trustee,
as the case may be, at a time when a Debenture Event of Default is continuing,
the Preferred Securityholders, by Act of the Securityholders of a majority in
Liquidation Amount of the Preferred Securities then Outstanding delivered to the
retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee
or Trustees with respect to the Trust Securities and the Trust, and such
successor Trustee shall comply with the applicable requirements of Section 8.11.
If an Administrative Trustee shall resign, be removed or become incapable of
acting as Administrative Trustee, at a time when a Debenture Event of Default
shall have occurred and be continuing, the Common Securityholder shall appoint a
successor or Administrative Trustees. If no successor Relevant Trustee with
respect to the Trust Securities shall have been so appointed by the Common
Securityholder or the Preferred Securityholders and accepted appointment in the
manner required by Section 8.11, any Securityholder who has been a
Securityholder of Trust Securities 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 Relevant Trustee with respect to
the Trust Securities.

         The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.8 and shall give notice to
the Depositor, in each case promptly upon receipt by it of notice of such
resignation. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.

         Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of remaining Administrative Trustees if
there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees set forth in Section 8.7).

                                       45

         Section 8.11 Acceptance of Appointment by Successor.

         In case of the appointment hereunder of a successor Trustee such
successor Trustee so appointed shall execute, acknowledge and deliver to the
Trust and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Depositor or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and if the Property Trustee is the
resigning Trustee shall duly assign, transfer and deliver to the successor
Trustee all property and money held by such retiring Property Trustee hereunder.

         In case of the appointment hereunder of a successor Relevant Trustee
with respect to the Trust Securities and the Trust, the retiring Relevant
Trustee (if requested by the Depositor) and each successor Relevant Trustee with
respect to the Trust Securities shall execute and deliver an amendment hereto
wherein each successor Relevant Trustee shall accept such appointment and which
(a) shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Relevant
Trustee, it being understood that nothing herein or in such amendment shall
constitute such Relevant Trustees co-trustees of the same trust and that each
such Relevant Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Relevant Trustee and upon the execution and delivery of such amendment the
resignation or removal of the retiring Relevant Trustee shall become effective
to the extent provided therein and each such successor Relevant Trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust; but, on request of the Trust or any successor
Relevant Trustee such retiring Relevant Trustee shall duly assign, transfer and
deliver to such successor Relevant Trustee all Trust Property, all proceeds
thereof and money held by such retiring Relevant Trustee hereunder with respect
to the Trust Securities and the Trust.

         Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.

                                       46

         No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.

         Section 8.12 Merger, Conversion, Consolidation or Succession to
Business.

         Any corporation into which the Property Trustee, the Delaware Trustee
or any Administrative 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 such Relevant Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto.

         Section 8.13 Preferential Collection of Claims Against Depositor or
Trust.

         If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor).

         Section 8.14 Reports by Property Trustee.

                  (a) Within 60 days after December 31 of each year commencing
         with December 31, 200- the Property Trustee shall transmit to all
         Securityholders in accordance with Section 10.8, and to the Depositor,
         a brief report dated as of such December 31 with respect to:

                           (i) its eligibility under Section 8.7 or, in lieu
                  thereof, if to the best of its knowledge it has continued to
                  be eligible under said Section, a written statement to such
                  effect;

                           (ii) a statement that the Property Trustee has
                  complied with all of its obligations under this Trust
                  Agreement during the twelve-month period (or, in the case of
                  the initial report, the period since the Closing Date) ending
                  with such December 31 or, if the Property Trustee has not
                  complied in any material respect with such obligations, a
                  description of such noncompliance; and

                           (iii) any change in the property and funds in its
                  possession as Property Trustee since the date of its last
                  report and any action taken by

                                       47

                  the Property Trustee in the performance of its duties
                  hereunder which it has not previously reported and which in
                  its opinion materially affects the Trust Securities.

                  (b) In addition the Property Trustee shall transmit to
         Securityholders and the Depositor such reports concerning the Property
         Trustee and its actions under this Trust Agreement as may be required
         pursuant to the Trust Indenture Act at the times and in the manner
         provided pursuant thereto.

                  (c) A copy of each such report shall, at the time of such
         transmission to the Depositor, be filed by the Depositor with each
         stock exchange upon which the Trust Securities are listed and with the
         Commission.

         Section 8.15 Reports to the Property Trustee.

         The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 3.14 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 3.14(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 3.14 of the Trust Indenture
Act.

         Section 8.16 Evidence of Compliance with Conditions Precedent.

         Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 3.14(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 3.14(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.

         Section 8.17 Number of Trustees.

                  (a) The number of Trustees shall be four, provided that the
         Holder of all of the Common Securities by written instrument may
         increase or decrease the number of Administrative Trustees.

                  (b) If a Trustee ceases to hold office for any reason and the
         number of Administrative Trustees is not reduced pursuant to Section
         8.17(a), or if the number of Trustees is increased pursuant to Section
         8.17(a), a vacancy shall occur. The vacancy shall be filled with a
         Trustee appointed in accordance with Section 8.10.

                  (c) The death, resignation, retirement, removal, bankruptcy,
         incompetence or incapacity to perform the duties of a Trustee shall not
         operate to

                                       48

         annul, dissolve or terminate the Trust. Whenever a vacancy in the
         number of Administrative Trustees shall occur, until such vacancy is
         filled by the appointment of an Administrative Trustee in accordance
         with Section 8.10, the Administrative Trustees in office, regardless of
         their number (and notwithstanding any other provision of this Trust
         Agreement), shall have all the powers granted to the Administrative
         Trustees and shall discharge all the duties imposed upon the
         Administrative Trustees by this Trust Agreement.

         Section 8.18 Delegation of Power.

                  (a) Any Administrative Trustee may, by power of attorney
         consistent with applicable law, delegate to any other natural person
         over the age of 21 his or her power for the purpose of executing any
         documents contemplated in Section 2.7(a), including any registration
         statement or amendment thereto filed with the Commission, or making any
         other governmental filing; and

                  (b) The Administrative Trustees shall have power to delegate
         from time to time to such of their number or to the Depositor the doing
         of such things and the execution of such instruments either in the name
         of the Trust or the names of the Administrative Trustees or otherwise
         as the Administrative Trustees may deem expedient, to the extent such
         delegation is not prohibited by applicable law or contrary to the
         provisions of the Trust, as set forth herein.

                                   ARTICLE IX
                       DISSOLUTION, LIQUIDATION AND MERGER

         Section 9.1 Dissolution Upon Expiration Date.

         Unless earlier dissolved, the Trust shall automatically dissolve on
- -, - (the "Expiration Date"), following the distribution of the Trust
Property in accordance with Section 9.4.

         Section 9.2 Early Dissolution.

         The first to occur of any of the following events is an "Early
Termination Event", upon the occurrence of which the Trust shall be dissolved:

                  (a) the occurrence of a Bankruptcy Event in respect of, or the
         dissolution or liquidation of, the Depositor;

                  (b) the occurrence of a Tax Event or an Investment Company
         Event (each, a "Special Event"), or the Trust is or will not be taxed
         as a grantor trust but a Tax Event has not occurred (a "Grantor Trust
         Event"), and written direction is given to the Property Trustee from
         the Depositor within 45 days of such Special

                                       49

         Event or Grantor Trust Event (which direction is optional and wholly
         within the discretion of the Depositor) to dissolve the Trust and
         distribute Debentures to Securityholders in accordance with Section
         9.4;

                  (c) the redemption of all of the Preferred Securities; and

                  (d) an order for dissolution of the Trust shall have been
         entered by a court of competent jurisdiction.

         Section 9.3 Termination.

         The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrative Trustees, including
the performance of any tax reporting obligations with respect to the Trust or
the Securityholders.

         Section 9.4 Liquidation.

                  (a) If an Early Termination Event specified in clause (a), (b)
         or (d) of Section 9.2 occurs or upon the Expiration Date, the Trust
         shall be liquidated by the Trustees as expeditiously as the Trustees
         determine to be possible by distributing, after satisfaction of
         liabilities to creditors of the Trust as provided by applicable law, to
         each Securityholder a Like Amount of Debentures, subject to Section
         9.4(d). Notice of liquidation shall be given by the Property Trustee by
         first-class mail, postage prepaid, mailed not later than 30 nor more
         than 60 days prior to the Liquidation Date to each Holder of Trust
         Securities at such Holder's address appearing in the Securities
         Register. All notices of liquidation shall:

                           (i) state the Liquidation Date;

                           (ii) state that from and after the Liquidation Date,
                  the Trust Securities will no longer be deemed to be
                  outstanding and any Trust Securities Certificates not
                  surrendered for exchange will be deemed to represent a Like
                  Amount of Debentures; and

                           (iii) provide such information with respect to the
                  mechanics by which Holders may exchange Trust Securities
                  Certificates for Debentures, or if Section 9.4(d) applies
                  receive a Liquidation Distribution, as the Administrative
                  Trustees or the Property Trustee shall deem appropriate.

                                       50

                  (b) Except where Section 9.2(c) or 9.4(d) applies, in order to
         effect the liquidation of the Trust and distribution of the Debentures
         to Securityholders, the Property Trustee shall establish a record date
         for such distribution (which shall be not more than 45 days prior to
         the Liquidation Date) and, either itself acting as exchange agent or
         through the appointment of a separate exchange agent, shall establish
         such procedures as it shall deem appropriate to effect the distribution
         of Debentures in exchange for the Outstanding Trust Securities
         Certificates.

                  (c) Except where Section 9.2(c) or 9.4(d) applies, after the
         Liquidation Date, (i) the Trust Securities will no longer be deemed to
         be outstanding, (ii) certificates representing a Like Amount of
         Debentures will be issued to holders of Trust Securities Certificates,
         upon surrender of such certificates to the Administrative Trustees or
         their agent for exchange, (iii) the Depositor shall use its reasonable
         efforts to have the Debentures listed on the New York Stock Exchange or
         on such other exchange as the Preferred Securities are then listed,
         (iv) any Trust Securities Certificates not so surrendered for exchange
         will be deemed to represent a Like Amount of Debentures, accruing
         interest at the rate provided for in the Debentures from the last
         Distribution Date on which a Distribution was made on such Trust
         Certificates until such certificates are so surrendered (and until such
         certificates are so surrendered, no payments or interest or principal
         will be made to holders of Trust Securities Certificates with respect
         to such Debentures) and (iv) all rights of Securityholders holding
         Trust Securities will cease, except the right of such Securityholders
         to receive Debentures upon surrender of Trust Securities Certificates.

                  (d) In the event that, notwithstanding the other provisions of
         this Section 9.4, whether because of an order for dissolution entered
         by a court of competent jurisdiction or otherwise, distribution of the
         Debentures in the manner provided herein is determined by the Property
         Trustee not to be practical, the Trust Property shall be liquidated,
         and the Trust shall be wound-up by the Property Trustee in such manner
         as the Property Trustee determines. In such event, Securityholders will
         be entitled to receive out of the assets of the Trust available for
         distribution to Securityholders, after satisfaction of liabilities to
         creditors of the Trust as provided by applicable law, an amount equal
         to the Liquidation Amount per Trust Security plus accrued and unpaid
         Distributions thereon to the date of payment (such amount being the
         "Liquidation Distribution"). If, upon any such winding up the
         Liquidation Distribution can be paid only in part because the Trust has
         insufficient assets available to pay in full the aggregate Liquidation
         Distribution, then, subject to the next succeeding sentence, the
         amounts payable by the Trust on the Trust Securities shall be paid on a
         pro rata basis (based upon Liquidation Amounts). The Holder of the
         Common Securities will be entitled to receive Liquidation Distributions
         upon any such dissolution, winding-up or termination pro rata
         (determined as aforesaid)

                                       51

         with Holders of Preferred Securities, except that, if a Debenture Event
         of Default has occurred and is continuing, the Preferred Securities
         shall have a priority over the Common Securities.

         Section 9.5 Mergers, Consolidations, Amalgamations or Replacements of
                     the Trust.

         The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except pursuant
to this Section 9.5 or Section 9.4. At the request of the Depositor, with the
consent of the Administrative Trustees and without the consent of the holders of
the Preferred Securities, the Trust may merge with or into, consolidate,
amalgamate, or be replaced by a trust organized as such under the laws of any
State; provided, that (i) such successor entity either (a) expressly assumes all
of the obligations of the Trust with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the Preferred Securities rank in
priority with respect to distributions and payments upon liquidation, redemption
and otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of the Debentures, (iii) the Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Preferred
Securities are then listed, if any, (iv) such merger, consolidation,
amalgamation or replacement does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the holders of the Preferred Securities (including any Successor Securities) in
any material respect, (vi) such successor entity has a purpose substantially
identical to that of the Trust, (vii) prior to such merger, consolidation,
amalgamation or replacement, the Depositor has received an Opinion of Counsel to
the effect that (a) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the holders of
the Preferred Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor such successor entity will be required to
register as an investment company under the 1940 Act and (viii) the Depositor
owns all of the common securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Guarantee. Notwithstanding the foregoing, the Trust
shall not, except with the consent of holders of 100% in Liquidation Amount of
the Preferred Securities, consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger or replacement would cause the Trust or the

                                       52

successor entity to be classified as other than a grantor trust for federal
income tax purposes.

                                   ARTICLE X
                            MISCELLANEOUS PROVISIONS

         Section 10.1 Limitation of Rights of Securityholders.

         The death or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor annul, dissolve or terminate the Trust, nor entitle the legal
representatives or heirs of such person or any Securityholder for such person,
to claim an accounting, take any action or bring any proceeding in any court for
a partition or winding up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.

         Section 10.2 Amendment.

                  (a) This Trust Agreement may be amended from time to time by
         the Administrative Trustees and the Depositor, without the consent of
         any Securityholders, (i) to cure any ambiguity, correct or supplement
         any provision herein or therein which may be inconsistent with any
         other provision herein or therein, or to make any other provisions with
         respect to matters or questions arising under this Trust Agreement,
         which shall not be inconsistent with the other provisions of this Trust
         Agreement, or (ii) to modify, eliminate or add to any provisions of
         this Trust Agreement to such extent as shall be necessary to ensure
         that the Trust will be classified for Federal income tax purposes as a
         grantor trust at all times that any Trust Securities are outstanding or
         to ensure that the Trust will not be required to register as an
         "investment company" under the 1940 Act; provided, however, that in the
         case of clause (i), such action shall not adversely affect in any
         material respect the interests of any Securityholder, and any such
         amendments of this Trust Agreement shall become effective when notice
         thereof is given to the Securityholders.

                  (b) Except as provided in Section 10.2(c) hereof, any
         provision of this Trust Agreement may be amended by the Administrative
         Trustees and the Depositor with (i) the consent of Trust
         Securityholders representing not less than a majority (based upon
         Liquidation Amounts) of the Trust Securities then Outstanding and (ii)
         receipt by the Trustees of an Opinion of Counsel to the effect that
         such amendment or the exercise of any power granted to the Trustees in
         accordance with such amendment will not affect the Trust's status as a
         grantor trust for federal income tax purposes or the Trust's exemption
         from status of an "investment company" under the 1940 Act.

                                       53

                  (c) In addition to and notwithstanding any other provision in
         this Trust Agreement, without the consent of each affected
         Securityholder, this Trust Agreement may not be amended to (i) change
         the amount or timing of any Distribution on the Trust Securities or
         otherwise adversely affect the amount of any Distribution required to
         be made in respect of the Trust Securities as of a specified date or
         (ii) restrict the right of a Securityholder to institute suit for the
         enforcement of any such payment on or after such date; notwithstanding
         any other provision herein without the unanimous consent of the
         Securityholders, this paragraph (c) of this Section 10.2 may not be
         amended.

                  (d) Notwithstanding any other provisions of this Trust
         Agreement, no Trustee shall enter into or consent to any amendment to
         this Trust Agreement which would cause the Trust to fail or cease to
         qualify for the exemption from status of an "investment company" under
         the 1940 Act.

                  (e) Notwithstanding anything in this Trust Agreement to the
         contrary, without the consent of the Depositor, this Trust Agreement
         may not be amended in a manner which imposes any additional obligation
         on the Depositor.

                  (f) In the event that any amendment to this Trust Agreement is
         made, the Administrative Trustees shall promptly provide to the
         Depositor a copy of such amendment.

                  (g) No amendment to this Trust Agreement shall be adopted that
         affects the Property Trustee's or the Delaware Trustee's rights, duties
         or immunities under this Trust Agreement without the consent of the
         Property Trustee or the Delaware Trustee, as the case may be. The
         Property Trustee shall be entitled to receive and conclusively rely on
         an Opinion of Counsel and an Officer's Certificate stating that any
         amendment to this Trust Agreement is in compliance with this Trust
         Agreement.

         Section 10.3 Separability.

         In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

         Section 10.4 Governing Law.

         This Trust Agreement and the rights and obligations of each of the
Securityholders, the Trust and the Trustees with respect to this Trust Agreement
and the Trust Securities shall be construed in accordance with and governed by
the laws of the State of Delaware without regard to principles of conflicts of
laws.

                                       54

         Section 10.5 Payments Due on Non-Business Day.

         If the date fixed for any payment on any Trust Security shall be a day
which is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day which is a Business Day (except as
otherwise provided in Section 4.1(a)), with the same force and effect as though
made on the date fixed for such payment, and no interest shall accrue thereon
for the period after such date.

         Section 10.6 Successors.

         This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant Trustee,
including any successor by operation of law. Except in connection with a
consolidation, merger or sale involving the Depositor that is permitted under
Article Eight of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.

         Section 10.7 Headings.

         The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.

         Section 10.8 Reports, Notices and Demands.

         Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Securityholder or the Depositor may be given or served in writing
by deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Principal
Financial Group, Inc., 711 High Street, Des Moines, Iowa 50392, Attention:
[Treasurer], facsimile no.: (515) [ ]. Any notice to Preferred Securityholders
shall also be given to such owners as have, within two years preceding the
giving of such notice, filed their names and addresses with the Property Trustee
for that purpose. Such notice, demand or other communication to or upon a
Securityholder shall be deemed to have been sufficiently given or made, for all
purposes, upon hand delivery, mailing or transmission.

         Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the Trust) as follows:
(a) with respect to the Property Trustee to __________, _________, ___________,
Attention: ___________; (b) with

                                       55

respect to the Delaware Trustee, to __________, _________, ___________,
Attention: ___________; and (c) with respect to the Administrative Trustees, to
them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of __________." Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the Trust or the Property Trustee.

         Section 10.9 Agreement Not to Petition.

         Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.9, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor, it shall (promptly after receipt of written notice of the
taking of such action) file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.9 shall survive the
termination of this Trust Agreement.

         Section 10.10 Trust Indenture Act; Conflict with Trust Indenture Act.

                  (a) This Trust Agreement is subject to the provisions of the
         Trust Indenture Act that are required to be part of this Trust
         Agreement and shall, to the extent applicable, be governed by such
         provisions.

                  (b) The Property Trustee shall be the only Trustee which is a
         trustee for the purposes of the Trust Indenture Act.

                  (c) If any provision hereof limits, qualifies or conflicts
         with another provision hereof which is required to be included in this
         Trust Agreement by any of the provisions of the Trust Indenture Act,
         such required provision shall control. If any provision of this Trust
         Agreement modifies or excludes any provision of the Trust Indenture Act
         which may be so modified or excluded, the latter provision shall be
         deemed to apply to this Trust Agreement as so modified or to be
         excluded, as the case may be.

                                       56

                  (d) The application of the Trust Indenture Act to this Trust
         Agreement shall not affect the nature of the Securities as equity
         securities representing undivided beneficial interests in the assets of
         the Trust.

         Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee and
                       Indenture.

         THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.

                                    PRINCIPAL FINANCIAL GROUP, INC.

                                    By:  _________________________
                                    Name:
                                    Title:

                                       57

                                    __________, as Property Trustee
                                    and Delaware Trustee

                                    By:  _______________________
                                    Name:
                                    Title:

                                    By:  _________________________
                                    as Administrative Trustee

                                    By:  _________________________
                                    as Administrative Trustee

                                       58

                                                                       Exhibit A

                              CERTIFICATE OF TRUST
                                       OF
                                [______________]

         This CERTIFICATE OF TRUST of [______________] (the "Trust"), is being
duly executed and filed by the undersigned, as trustee, to form a statutory
trust under the Delaware Statutory Trust Act (12 Del. Code Section 3801 et seq.)
(the "Act").

         1. Name. The name of the statutory trust being formed hereby is
"[______________]."

         2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware is
__________, _________, ___________, Attention: ___________; .

         3. Effective Date. This Certificate of Trust shall be effective as of
its filing.

         IN WITNESS WHEREOF, the undersigned trustee of the Trust, has executed
this Certificate of Trust in accordance with Section 3811(a) of the Act.

                                                     __________,
                                                     as Trustee

                                                     By: ______________
                                                     Name:
                                                     Title:

                                       59

                                                                       Exhibit B

                                                           __________ ___, _____

The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099.

Attention:    ________________________
              General Counsel's Office

Re: [           ][Quarterly] Income Preferred Securities

Ladies and Gentlemen:

         The purpose of this letter is to set forth certain matters relating to
the issuance and deposit with The Depository Trust Company ("DTC") of
[_______________________] [_________]% Cumulative [Quarterly] Income Preferred
Securities, Series A (the "Preferred Securities"), of [_____________], a
Delaware statutory trust (the "Issuer"), formed pursuant to a Trust Agreement
between Principal Financial Group, Inc. ("Principal") and __________, as
Trustee. The payment of distributions on the Preferred Securities to the extent
the Issuer has funds available for the payment thereof, and payments due upon
liquidation of Issuer or redemption of the Preferred Securities are guaranteed
by Principal to the extent set forth in a Guarantee Agreement, dated __________
__, ____, by Principal with respect to the Preferred Securities. Principal and
the Issuer propose to sell the Preferred Securities to certain Underwriters (the
"Underwriters") pursuant to an Underwriting Agreement, dated __________ __,
200_, by and among the Underwriters, the Issuer and Principal dated _________
__, ____ and the Underwriters wish to take delivery of the Preferred Securities
through DTC. __________ is acting as transfer agent and registrar with respect
to the Preferred Securities (the "Transfer Agent and Registrar").

         To induce DTC to accept the Preferred Securities as eligible for
deposit at DTC, and to act in accordance with DTC's rules with respect to the
Preferred Securities, the Issuer, the Transfer Agent and Registrar and DTC agree
among each other as follows:

         1.       Prior to the closing of the sale of the Preferred Securities
                  to the Underwriters, which is expected to occur on or about
                  _________ __, ____, there shall be deposited with DTC one or
                  more global certificates (individually and collectively, the
                  "Global Certificate") registered in the name of DTC's
                  Preferred Securities nominee, Cede & Co., representing an
                  aggregate of _____________ Preferred Securities and bearing
                  the following legend:

                  Unless this certificate is presented by an authorized
                  representative of The Depository Trust Company, a New York
                  corporation ("DTC"), to Issuer or its agent for

                                       60

                  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
                  inasmuch as the registered owner hereof, Cede & Co., has an
                  interest herein.

         2.       The Amended and Restated Trust Agreement of the Issuer
                  provides for the voting by holders of the Preferred Securities
                  under certain limited circumstances. The Issuer shall
                  establish a record date for such purposes and shall, to the
                  extent possible, give DTC notice of such record date not less
                  than 15 calendar days in advance of such record date.

         3.       In the event of a stock split, conversion, recapitalization,
                  reorganization or any other similar transaction resulting in
                  the cancellation of all or any part of the Preferred
                  Securities outstanding, the Issuer or the Transfer Agent and
                  Registrar shall send DTC a notice of such event at least 5
                  business days prior to the effective date of such event.

         4.       In the event of distribution on, or an offering or issuance of
                  rights with respect to, the Preferred Securities outstanding,
                  the Issuer or the Transfer Agent and Registrar shall send DTC
                  a notice specifying: (a) the amount of and conditions, if any,
                  applicable to the payment of any such distribution or any such
                  offering or issuance of rights; (b) any applicable expiration
                  or deadline date, or any date by which any action on the part
                  of the holders of Preferred Securities is required; and (c)
                  the date any required notice is to be mailed by or on behalf
                  of the Issuer to holders of Preferred Securities or published
                  by or on behalf of the Issuer (whether by mail or publication,
                  the "Publication Date"). Such notice shall be sent to DTC by a
                  secure means (e.g., legible telecopy, registered or certified
                  mail, overnight delivery) in a timely manner designed to
                  assure that such notice is in DTC's possession no later than
                  the close of business on the business day before the
                  Publication Date. The Issuer or the Transfer Agent and
                  Registrar will forward such notice either in a separate secure
                  transmission for each CUSIP number or in a secure transmission
                  of multiple CUSIP numbers (if applicable) that includes a
                  manifest or list of each CUSIP number submitted in that
                  transmission. (The party sending such notice shall have a
                  method to verify subsequently the use of such means and the
                  timeliness of such notice.) The Publication Date shall be not
                  less than 30

                                       61

                  calendar days nor more than 60 calendar days prior to the
                  payment of any such distribution or any such offering or
                  issuance of rights with respect to the Preferred Securities.
                  After establishing the amount of payment to be made on the
                  Preferred Securities, the Issuer or the Transfer Agent and
                  Registrar will notify DTC's Dividend Department of such
                  payment 5 business days prior to payment date. Notices to
                  DTC's Dividend Department by telecopy shall be sent to (212)
                  855-4555. Such notices by mail or by any other means shall be
                  sent to:

                  Manager, Announcements
                  Dividend Department
                  The Depository Trust Company
                  55 Water Street, 25th Floor
                  New York, New York 10041

         The Issuer or the Transfer Agent and Registrar shall confirm DTC's
receipt of such telecopy by telephoning the Dividend Department at (212)
855-4550.

         5.       In the event of a redemption by the Issuer of the Preferred
                  Securities, notice specifying the terms of the redemption and
                  the Publication Date of such notice shall be sent by the
                  Issuer or the Transfer Agent and Registrar to DTC not less
                  than 30 calendar days prior to such event by a secure means in
                  the manner set forth in paragraph 4. Such redemption notice
                  shall be sent to DTC's Call Notification Department at (212)
                  855-7232, (212) 855-7233 or (212) 855-7234 and receipt of such
                  notice shall be confirmed by telephoning (212) 855-7207.
                  Notice by mail or by any other means shall be sent to:

                  Call Notification Department
                  The Depository Trust Company
                  55 Water Street, 50th Floor
                  New York, New York 10041

         6.       In the event of any invitation to tender the Preferred
                  Securities, notice specifying the terms of the tender and the
                  Publication Date of such notice shall be sent by the Issuer or
                  the Transfer Agent and Registrar to DTC by a secure means and
                  in a timely manner as described in paragraph 4. Notices to DTC
                  pursuant to this paragraph and notices of other corporate
                  actions (including mandatory tenders, exchanges and capital
                  changes), shall be sent, unless notification to another
                  department is expressly provided for herein, by telecopy to
                  DTC's Reorganization Department at (212) 855-5240 or (212)
                  855-5488 and receipt of such notice shall be

                                       62

                  confirmed by telephoning (212) 855-5235 or (212) 855-5489, or
                  by mail or any other means to:

                  Manager, Reorganization Department
                  Reorganization Window
                  The Depository Trust Company
                  55 Water Street, 50th Floor
                  New York, New York 10041

         7.       All notices and payment advices sent to DTC shall contain the
                  CUSIP number or numbers of the Preferred Securities and the
                  accompanying designation of the Preferred Securities, which,
                  as of the date of this letter is "[______________] _____%
                  Cumulative [Quarterly] Income Preferred Securities."

         8.       Distribution payments or other cash payments with respect to
                  the Preferred Securities evidenced by the Global Certificate
                  shall be received by Cede & Co., as nominee of DTC, or its
                  registered assigns in next day funds on each payment date (or
                  in accordance with existing arrangements between the Issuer or
                  the Transfer Agent and Registrar and DTC). Such payments shall
                  be made payable to the order of Cede & Co., and shall be
                  addressed as follows:

                  NDFS Redemption Department
                  The Depository Trust Company
                  55 Water Street, 25th Floor
                  New York, New York 10041

         9.       DTC may by prior written notice direct the Issuer and the
                  Transfer Agent and Registrar to use any other telecopy number
                  or address of DTC as the number or address to which notices or
                  payments may be sent.

         10.      In the event of a conversion, redemption, or any other similar
                  transaction (e.g., tender made and accepted in response to the
                  Issuer's or the Transfer Agent and Registrar's invitation)
                  necessitating a reduction in the aggregate number of Preferred
                  Securities outstanding evidenced by the Global Certificate,
                  DTC, in its discretion: (a) may request the Issuer or the
                  Transfer Agent and Registrar to issue and countersign a new
                  Global Certificate; or (b) may make an appropriate notation on
                  the Global Certificate indicating the date and amount of such
                  reduction.

         11.      DTC may discontinue its services as a securities depositary
                  with respect to the Preferred Securities at any time by giving
                  at least 90 days' prior

                                       63

                  written notice to the Issuer and the Transfer Agent and
                  Registrar (at which time DTC will confirm with the Issuer or
                  the Transfer Agent and Registrar the aggregate number of
                  Preferred Securities deposited with it) and discharging its
                  responsibilities with respect thereto under applicable law.
                  Under such circumstances, the Issuer may determine to make
                  alternative arrangements for book-entry settlement for the
                  Preferred Securities, make available one or more separate
                  global certificates evidencing Preferred Securities to any
                  Participant having Preferred Securities credited to its DTC
                  account, or issue definitive Preferred Securities to the
                  beneficial holders thereof, and in any such case, DTC agrees
                  to cooperate fully with the Issuer and the Transfer Agent and
                  Registrar and to return the Global Certificate, duly endorsed
                  for transfer as directed by the Issuer or the Transfer Agent
                  and Registrar, together with any other documents of transfer
                  reasonably requested by the Issuer or the Transfer Agent and
                  Registrar.

         12.      In the event that the Issuer determines that beneficial owners
                  of Preferred Securities shall be able to obtain definitive
                  Preferred Securities, the Issuer or the Transfer Agent and
                  Registrar shall notify DTC of the availability of
                  certificates. In such event, the Issuer or the Transfer Agent
                  and Registrar shall issue, transfer and exchange certificates
                  in appropriate amounts, as required by DTC and others, and DTC
                  agrees to cooperate fully with the Issuer and the Transfer
                  Agent and Registrar and to return the Global Certificate, duly
                  endorsed for transfer as directed by the Issuer or the
                  Transfer Agent and Registrar, together with any other
                  documents of transfer reasonably requested by the Issuer or
                  the Transfer Agent and Registrar.

         13.      This letter may be executed in any number of counterparts,
                  each of which when so executed shall be deemed to be an
                  original, but all such counterparts shall together constitute
                  but one and the same instrument.

         Nothing herein shall be deemed to require the Transfer Agent and
Registrar to advance funds on behalf of [______________].

                                     Very truly yours,

                                     [______________]
                                     (As Issuer)

                                     By:  [Name of Trustee]
                                          -----------------------------
                                          Administrative Trustee

                                       64

                                     By: __________________________________
                                          Name:
                                          Title:
                                          (As Transfer Agent and Registrar)

                                     By: __________________________________
                                          Name:
                                          Title:

RECEIVED AND ACCEPTED:

THE DEPOSITORY TRUST COMPANY

By:________________________________
     Authorized Officer

                                       65

                                                                       Exhibit C

         THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE
                       TRUST AGREEMENT (AS DEFINED BELOW)

Certificate Number                               Number of Common Securities

C--

                    Certificate Evidencing Common Securities

                                       of

                                [______________]

                              -% Common Securities

                  (liquidation amount $25 per Common Security)

         [______________], a statutory trust formed under the laws of the State
of Delaware (the "Trust"), hereby certifies that Principal Financial Group, Inc.
(the "Holder") is the registered owner of - (-) common securities of the Trust
representing undivided beneficial interests in the assets of the Trust and
designated the -% Common Securities (liquidation amount $25 per Common Security)
(the "Common Securities"). In accordance with Section 5.10 of the Trust
Agreement (as defined below) the Common Securities are not transferable and, to
the fullest extent permitted by law, any attempted transfer hereof shall be
void. The designations, rights, privileges, restrictions, preferences and other
terms and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall in
all respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust, dated as of -, 200-, as the same may be amended
from time to time (the "Trust Agreement") including the designation of the terms
of the Common Securities as set forth therein. The Trust will furnish a copy of
the Trust Agreement to the Holder without charge upon written request to the
Trust at its principal place of business or registered office.

         Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.

                                       66

         IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ______ day of ________ ____.

                                       [______________]

                                       By___________________________
                                       Name:
                                       Administrative Trustee

                                       67

                                                                       Exhibit D

                    AGREEMENT AS TO EXPENSES AND LIABILITIES

         AGREEMENT, dated as of -, 200-, between Principal Financial
Group, Inc., a Delaware corporation ("Principal"), and [______________], a
Delaware statutory trust (the "Trust").

         WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from Principal and to issue and sell
- -% - (the "Preferred Securities") with such powers, preferences and
special rights and restrictions as are set forth in the Amended and Restated
Trust Agreement of the Trust dated as of -, 20- as the same may be
amended from time to time (the "Trust Agreement");

         WHEREAS, Principal will directly or indirectly own all of the Common
Securities of Trust and will issue the Debentures;

         NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase Principal hereby agrees shall benefit
Principal and which purchase Principal acknowledges will be made in reliance
upon the execution and delivery of this Agreement, Principal and Trust hereby
agree as follows:

                                    ARTICLE I

         Section 1.1 Guarantee by Principal.

         Subject to the terms and conditions hereof, Principal hereby
irrevocably and unconditionally guarantees to each person or entity to whom the
Trust is now or hereafter becomes indebted or liable (the "Beneficiaries") the
full payment, when and as due, of any and all Obligations (as hereinafter
defined) to such Beneficiaries. As used herein, "Obligations" means any costs,
expenses or liabilities of the Trust, other than obligations of the Trust to pay
to holders of any Preferred Securities or other similar interests in the Trust
the amounts due such holders pursuant to the terms of the Preferred Securities
or such other similar interests, as the case may be. This Agreement is intended
to be for the benefit of, and to be enforceable by, all such Beneficiaries,
whether or not such Beneficiaries have received notice hereof.

         Section 1.2. Term of Agreement.

         This Agreement shall terminate and be of no further force and effect
upon the later of (a) the date on which full payment has been made of all
amounts payable to all holders of all the Preferred Securities (whether upon
redemption, liquidation, exchange or otherwise) and (b) the date on which there
are no Beneficiaries remaining; provided, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any holder of Preferred Securities or any Beneficiary must restore payment
of any sums paid under the Preferred Securities, under any Obligation,

                                       68

under the Guarantee Agreement dated the date hereof by Principal and __________
as guarantee trustee or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.

         Section 1.3. Waiver of Notice.

         Principal hereby waives notice of acceptance of this Trust Agreement
and of any Obligation to which it applies or may apply, and Principal hereby
waives presentment, demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.

         Section 1.4. No Impairment.

         The obligations, covenants, agreements and duties of Principal under
this Trust Agreement shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:

                  (a) the extension of time for the payment by the Trust of all
         or any portion of the Obligations or for the performance of any other
         obligation under, arising out of, or in connection with, the
         obligations;

                  (b) any failure, omission, delay or lack of diligence on the
         part of the Beneficiaries to enforce, assert or exercise any right,
         privilege, power or remedy conferred on the Beneficiaries with respect
         to the Obligations or any action on the part of the Trust granting
         indulgence or extension of any kind; or

                  (c) the voluntary or involuntary liquidation, dissolution,
         sale of any collateral, receivership, insolvency, bankruptcy,
         assignment for the benefit of creditors, reorganization, arrangement,
         composition or readjustment of debt, or other similar proceedings
         affecting the Trust or any of the assets of the Trust.

There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, Principal with respect to the happening of any of the foregoing.

         Section 1.5. Enforcement.

         A Beneficiary may enforce this Agreement directly against Principal and
Principal waives any right or remedy to require that any action be brought
against the Trust or any other person or entity before proceeding against
Principal.

                                       69

                                   ARTICLE II

         Section 2.1. Binding Effect.

         All guarantees and agreements contained in this Trust Agreement shall
bind the successors, assigns, receivers, trustees and representatives of
Principal and shall inure to the benefit of the Beneficiaries.

         Section 2.2. Amendment.

         So long as there remains any Beneficiary or any Preferred Securities of
any series are outstanding, this Agreement shall not be modified or amended in
any manner adverse to such Beneficiary or to the holders of the Preferred
Securities.

         Section 2.3. Notices.

         Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or by registered
or certified mail, addressed as follows (and if so given, shall be deemed given
when mailed or upon receipt of an answer-back, if sent by telex):

         [______________]
         c/o __________
         _______________
         _______________
         Facsimile No.: ___________
         Attention: ______________

         Principal Financial Group, Inc.
         711 High Street
         Des Moines, Iowa 50392
         Facsimile No.: (515) [               ]
         Attention: [Treasurer]

         Section 2.4 This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York.

                                       70

         THIS AGREEMENT is executed as of the day and year first above written.

                                          PRINCIPAL FINANCIAL GROUP, INC.

                                          By:_________________________
                                          Name:
                                          Title:

                                          [______________]

                                          By:_________________________
                                          Name:
                                          Administrative Trustee

                                       71

                                                                       Exhibit E

         IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository. This
Preferred Security is exchangeable for Preferred Securities registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Trust Agreement and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
limited circumstances.

         Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
[______________] or its agent for registration of transfer, exchange or payment,
and any Preferred Security issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.

Certificate Number                          Number of Preferred Securities

P-

                                            CUSIP NO.

                   Certificate Evidencing Preferred Securities

                                       of

                                [______________]

                                       -%,

                                    Series -

                 (liquidation amount $25 per Preferred Security)

         [______________], a statutory trust formed under the laws of the State
of Delaware (the "Trust"), hereby certifies that - (the "Holder") is the
registered owner of - (-) preferred securities of the Trust representing an
undivided beneficial interest in the assets of the Trust and designated the
[______________] -% -, Series A- (liquidation amount $25 per Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer

                                       72

as provided in Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of -, 200-, as the same may be amended
from time to time (the "Trust Agreement") including the designation of the terms
of Preferred Securities as set forth therein. The Holder is entitled to the
benefits of the Guarantee Agreement entered into by Principal Financial Group,
Inc., a Delaware corporation, and __________, as guarantee trustee, dated as of
- -, 200-, as the same may be amended from time to time (the "Guarantee"), to the
extent provided therein. The Trust will furnish a copy of the Trust Agreement
and the Guarantee to the Holder without charge upon written request to the Trust
at its principal place of business or registered office.

         Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.

         IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this - day of -, -.

                                      [______________]

                                      By:______________________________
                                      Name:
                                      Administrative Trustee

                                       73

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:

(Insert assignee's social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints

agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.

Date:_____________
Signature:___________________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)

                                       74

                                                                         ANNEX C

                               GUARANTEE AGREEMENT

                                     Between

                         Principal Financial Group, Inc.
                                 (as Guarantor)

                                       and

                             [____________________]
                                  (as Trustee)

                                   dated as of

                                        -

                                TABLE OF CONTENTS

                                                                                               Page
                                                                                               ----
                                                                                         
                                    ARTICLE 1

                                   DEFINITIONS

SECTION 1.1   Definitions........................................................................1

                                    ARTICLE 2

                               TRUST INDENTURE ACT

SECTION 2.1   Trust Indenture Act; Application...................................................5
SECTION 2.2   List of Holders....................................................................5
SECTION 2.3   Reports by the Guarantee Trustee...................................................5
SECTION 2.4   Periodic Reports to Guarantee Trustee..............................................5
SECTION 2.5   Evidence of Compliance with Conditions Precedent...................................6
SECTION 2.6   Events of Default; Waiver..........................................................6
SECTION 2.7   Event of Default; Notice...........................................................6
SECTION 2.8   Conflicting Interests..............................................................6

                                    ARTICLE 3

               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 3.1   Powers and Duties of the Guarantee Trustee.........................................7
SECTION 3.2   Certain Rights of Guarantee Trustee................................................8
SECTION 3.3   Indemnity.........................................................................10

                                    ARTICLE 4

                                GUARANTEE TRUSTEE

SECTION 4.1   Guarantee Trustee; Eligibility....................................................10
SECTION 4.2   Appointment, Removal and Resignation of the Guarantee Trustee.....................11

                                    ARTICLE 5

                                    GUARANTEE

SECTION 5.1   Guarantee.........................................................................12
SECTION 5.2   Waiver of Notice and Demand.......................................................12
SECTION 5.3   Obligations Not Affected..........................................................12
SECTION 5.4   Rights of Holders.................................................................13
SECTION 5.5   Guarantee of Payment..............................................................13

                                        i

                                TABLE OF CONTENTS
                                   (continued)

                                                                                               Page
                                                                                               ----
                                                                                         
SECTION 5.6   Subrogation.......................................................................14
SECTION 5.7   Independent Obligations...........................................................14

                                    ARTICLE 6

                           COVENANTS AND SUBORDINATION

SECTION 6.1   Subordination.....................................................................14
SECTION 6.2   Pari Passu Guarantees.............................................................14

                                    ARTICLE 7

                                   TERMINATION

SECTION 7.1   Termination.......................................................................15

                                    ARTICLE 8

                                  MISCELLANEOUS

SECTION 8.1   Successors and Assigns............................................................15
SECTION 8.2   Amendments........................................................................15
SECTION 8.3   Notices...........................................................................16
SECTION 8.4   Benefit...........................................................................17
SECTION 8.5   Interpretation....................................................................17
SECTION 8.6   GOVERNING LAW.....................................................................17

                                       ii

                             CROSS-REFERENCE TABLE*

         Section of                                                                          Section of
         Trust Indenture Act                                                                 Guarantee
         of 1939, as amended                                                                 Agreement
         -------------------                                                                 ---------
                                                                                          
         310(a).................................................................             4.1(a)
         310(b).................................................................             4.1(c), 208
         310(c).................................................................             Inapplicable
         311(a).................................................................             2.2(b)
         311(b).................................................................             2.2(b)
         311(c).................................................................             Inapplicable
         312(a).................................................................             2.2(a)
         312(b).................................................................             2.2(b)
         313....................................................................             2.3
         314(a).................................................................             2.4
         314(b).................................................................             Inapplicable
         314(c).................................................................             2.5
         314(d).................................................................             Inapplicable
         314(e).................................................................             1.1, 2.5, 3.2
         314(f).................................................................             2.1, 3.2
         315(a).................................................................             3.1(d)
         315(b).................................................................             2.7
         315(c).................................................................             3.1
         315(d).................................................................             3.1(d)
         316(a).................................................................             1.1, 2.6, 5.4
         316(b).................................................................             5.3
         316(c).................................................................             8.2
         317(a).................................................................             Inapplicable
         317(b).................................................................             Inapplicable
         318(a).................................................................             2.1(b)
         318(b).................................................................             2.1
         318(c).................................................................             2.1(a)

- --------
* This Cross-Reference Table does not constitute part of the Guarantee Agreement
and shall not affect the interpretation of any of its terms or provisions.

                                      iii

                               GUARANTEE AGREEMENT

      This GUARANTEE AGREEMENT, dated as of -, 200-, is executed and
delivered by Principal Financial Group, Inc., a Delaware corporation (the
"Guarantor"), and [____________________], a [________________] organized under
the laws of the State of Delaware, as trustee (the "Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Securities (as defined herein) of [____________________], a Delaware statutory
trust (the "Issuer").

      WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of -, 200-, among the Trustees named therein,
the Guarantor, as Depositor, and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing -
of its -% Preferred Securities, Series A (liquidation preference $25 per
preferred security) (the "Preferred Securities") representing preferred
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in the Trust Agreement;

      WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Debentures
(as defined in the Trust Agreement) of the Guarantor which will be deposited
with [____________________], as Property Trustee under the Trust Agreement, as
trust assets; and

      WHEREAS, as incentive for the Holders to purchase Preferred Securities the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Preferred Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.

      NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time of the Preferred Securities.

                                    ARTICLE 1
                                   DEFINITIONS

      SECTION 1.1 Definitions.

      As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.

      "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, provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. 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.

      "Common Securities" means the securities representing common beneficial
interests in the assets of the Issuer.

      "Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.

      "Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.

      "Expenses" has the meaning specified in Section 3.3.

      "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer to the extent
the Issuer shall have funds on hand available therefor, and (iii) upon a
voluntary or involuntary termination, winding-up or liquidation of the Issuer,
unless Debentures are distributed to

                                        2

the Holders, the lesser of (a) the aggregate of the liquidation preference of
$25 per Preferred Security plus accrued and unpaid Distributions on the
Preferred Securities to the date of payment to the extent the Issuer shall have
funds on hand available to make such payment and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").

      "Guarantee Trustee" means [____________________] (not in its individual
capacity but solely in its trustee capacity), until a Successor Guarantee
Trustee has been appointed and has accepted such appointment pursuant to the
terms of this Guarantee Agreement and thereafter means each such Successor
Guarantee Trustee.

      "Holder" means any holder, as registered on the books and records of the
Issuer, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee or any Affiliate of the Guarantor
or the Guarantee Trustee.

      "Indenture" means the Junior Subordinated Indenture dated as of
______________, 200_, as supplemented and amended between the Guarantor and
[____________________], as trustee.

      "List of Holders" has the meaning specified in Section 2.2(a).

      "Majority in liquidation preference of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the liquidation preference of all then
outstanding Preferred Securities issued by the Issuer.

      "Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman, President, Chief Executive Officer or a Vice President,
and by the Treasurer, an Associate Treasurer, an Assistant Treasurer, the
Controller, the Secretary or an Assistant Secretary of such Person, and
delivered to the Guarantee Trustee. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:

            (a) a statement that each officer signing the Officers' Certificate
      has read the covenant or condition and the definitions relating thereto;

            (b) a brief statement of the nature and scope of the examination or
      investigation undertaken by each officer in rendering the Officers'
      Certificate;

            (c) a statement that each such officer has made such examination or
      investigation as, in such officer's opinion, is necessary to enable such
      officer to

                                        3

      express an informed opinion as to whether or not such covenant or
      condition has been complied with; and

            (d) a statement as to whether, in the opinion of each such officer,
      such condition or covenant has been complied with.

      "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

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

      "Senior Debt" means the principal of (and premium, if any) and interest,
if any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Guarantee or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Guarantee or to other Debt which is pari
passu with, or subordinated to, the Guarantee; provided, however, that Senior
Debt shall not be deemed to include (a) any Debt of the Guarantor which when
incurred and without respect to any election under Section 11.11(b) of the
Bankruptcy Reform Act of 1978, was without recourse to the Company, (b) any Debt
of the Guarantor to any of its Subsidiaries, (c) Debt to any employee of the
Guarantor, (d) any liability for taxes, (e) Debt or other monetary obligations
to trade creditors created or assumed by the Guarantor or any of its
Subsidiaries in the ordinary course of business in connection with the obtaining
of goods, materials or services and (f) Debt issued under the Indenture and (g)
the Guarantee.

      "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

      "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

                                       4

                                    ARTICLE 2
                               TRUST INDENTURE ACT

      SECTION 2.1 Trust Indenture Act; Application.

      (a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.

      (b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 3.10 to 3.17,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

      SECTION 2.2 List of Holders.

      (a) The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (a) semiannually, on or before February 15 and August 15 of each year, a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders ("List of Holders") as of a date not more than 15
days prior to the delivery thereof, and (b) at such other times as the Guarantee
Trustee may request in writing, within 30 days after the receipt by the
Guarantor of any such request, a List of Holders as of a date not more than 15
days prior to the time such list is furnished, in each case to the extent such
information is in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.

      (b) The Guarantee Trustee shall comply with its obligations under Section
3.11(a), Section 3.11(b) and Section 3.12(b) of the Trust Indenture Act.

      SECTION 2.3 Reports by the Guarantee Trustee.

      Within 60 days after - of each year, the Guarantee Trustee shall
provide to the Holders such reports as are required by Section 3.13 of the Trust
Indenture Act, if any, in the form and in the manner provided by Section 3.13 of
the Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 3.13(d) of the Trust Indenture Act.

      SECTION 2.4 Periodic Reports to Guarantee Trustee.

      The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 3.14 of the Trust Indenture Act and the compliance
certificate

                                       5

required by Section 3.14 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 3.14 of the Trust Indenture Act.

      SECTION 2.5 Evidence of Compliance with Conditions Precedent.

      The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
3.14(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 3.14(c)(1) may be given in the form of
an Officers' Certificate.

      SECTION 2.6 Events of Default; Waiver.

      The Holders of a Majority in liquidation preference of the Preferred
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.

      SECTION 2.7 Event of Default; Notice.

      (a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all Events of Default actually known to a Responsible Officer of the
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice, provided, that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as the Board of Directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.

      (b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer of the Guarantee Trustee shall
have received written notice of such Event of Default.

      SECTION 2.8 Conflicting Interests.

      The Trust Agreement shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 3.10(b) of the Trust Indenture Act.

                                       6

                                    ARTICLE 3
               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

      SECTION 3.1 Powers and Duties of the Guarantee Trustee.

      (a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.04(iv) or to a Successor Guarantee Trustee on acceptance
by such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.

      (b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall, promptly upon receipt of written notice of such Event of Default,
enforce this Guarantee Agreement for the benefit of the Holders.

      (c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied duties or covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.

      (d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:

                  (i) prior to the occurrence of any Event of Default and after
            the curing or waiving of all such Events of Default that may have
            occurred:

                        (A) the duties and obligations of the Guarantee Trustee
                  shall be determined solely by the express provisions of this
                  Guarantee Agreement, and the Guarantee Trustee shall not be
                  liable except for the performance of such duties and
                  obligations as are specifically set forth in this Guarantee
                  Agreement; and

                                       7

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

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

                  (iii) the Guarantee Trustee shall not be liable with respect
            to any action taken or omitted to be taken by it in good faith in
            accordance with the direction of the Holders of not less than a
            Majority in liquidation preference of the Preferred Securities
            relating to the time, method and place of conducting any proceeding
            for any remedy available to the Guarantee Trustee, or exercising any
            trust or power conferred upon the Guarantee Trustee under this
            Guarantee Agreement; and

                  (iv) no provision of this Guarantee Agreement shall require
            the Guarantee Trustee to expend or risk its own funds or otherwise
            incur personal financial liability in the performance of any of its
            duties or in the exercise of any of its rights or powers, if the
            Guarantee Trustee shall have reasonable grounds for believing that
            the repayment of such funds or liability is not reasonably assured
            to it under the terms of this Guarantee Agreement or adequate
            indemnity against such risk or liability is not reasonably assured
            to it.

      SECTION 3.2 Certain Rights of Guarantee Trustee.

      (a) Subject to the provisions of Section 3.01:

            (i) The Guarantee Trustee may rely and shall be fully 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, sent or presented by the
proper party or parties.

                                       8

            (ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers' Certificate
unless otherwise prescribed herein.

            (iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action hereunder,
the Guarantee Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request from the Guarantee Trustee,
shall be promptly delivered by the Guarantor.

            (iv) The Guarantee Trustee may consult with legal counsel, and the
written advice or opinion of such legal counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted to be taken by it hereunder in good faith and in
accordance with such advice or opinion. Such legal counsel may be legal counsel
to the Guarantor or any of its Affiliates and may be one of its employees. The
Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from any court of
competent jurisdiction.

            (v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have provided to
the Guarantee Trustee such adequate security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee; provided that,
nothing contained in this Section 3.2(a)(v) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Guarantee Agreement.

            (vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.

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

                                       9

            (viii) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action hereunder,
the Guarantee Trustee (A) may request instructions from the Holders, (B) may
refrain from enforcing such remedy or right or taking such other action until
such instructions are received, and (C) shall be protected in acting in
accordance with such instructions.

      (b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.

      SECTION 3.3 Indemnity.

      The Guarantor agrees to indemnify the Guarantee Trustee (including in its
individual capacity) and its officers, directors and employees for, and to hold
each harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Guarantee Trustee, arising out of or
in connection with the acceptance or administration of this Guarantee Agreement,
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 (collectively, "Expenses"). The Guarantee Trustee will not
claim or exact any lien or charge on any Guarantee Payments as a result of any
amount due to it under this Guarantee Agreement. To the fullest extent permitted
by law, the Expenses (including reasonable attorneys' fees and expenses)
incurred by the Guarantee Trustee referred to above shall be paid by the
Guarantor in advance upon receipt of an undertaking by or on behalf of the
Guarantee Trustee to repay such amount if it shall ultimately be determined that
the Guarantee Trustee is not entitled to be indemnified by the Guarantor as
authorized in this Section 3.3. The obligations of the Guarantor under this
Section 3.3 shall survive termination of this Guarantee Agreement and the
removal or resignation of any Guarantee Trustee.

                                    ARTICLE 4
                                GUARANTEE TRUSTEE

      SECTION 4.1 Guarantee Trustee; Eligibility.

      (a) There shall at all times be a Guarantee Trustee which shall:

                  (i) not be an Affiliate of the Guarantor; and

                                       10

                  (ii) 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 50 million U.S. dollars ($50,000,000), and shall be a
            corporation meeting the requirements of Section 3.10(c) of the Trust
            Indenture Act. If such corporation publishes reports of condition at
            least annually, pursuant to law or to the requirements of the
            supervising or examining authority, then, for the purposes of this
            Section and to the extent permitted by the Trust Indenture Act, the
            combined capital and surplus of such corporation shall be deemed to
            be its combined capital and surplus as set forth in its most recent
            report of condition so published.

      (b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).

      (c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 3.10(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 3.10(b) of the Trust Indenture Act.

      SECTION 4.2 Appointment, Removal and Resignation of the Guarantee Trustee.

      (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.

      (b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.

      (c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

      (d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a

                                       11

Successor Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.

                                    ARTICLE 5
                                    GUARANTEE

      SECTION 5.1 Guarantee.

      The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.

      SECTION 5.2 Waiver of Notice and Demand.

      The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.

      SECTION 5.3 Obligations Not Affected.

      The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:

            (a) the release or waiver, by operation of law or otherwise, of the
      performance or observance by the Issuer of any express or implied
      agreement, covenant, term or condition relating to the Preferred
      Securities to be performed or observed by the Issuer;

            (b) the extension of time for the payment by the Issuer of all or
      any portion of the Distributions (other than an extension of time for
      payment of Distributions that results from the extension of any interest
      payment period on the Debentures as so provided in the Indenture),
      Redemption Price, Liquidation Distribution or any other sums payable under
      the terms of the Preferred Securities or the extension of time for the
      performance of any other obligation under, arising out of, or in
      connection with, the Preferred Securities;

                                       12

            (c) any failure, omission, delay or lack of diligence on the part of
      the Holders to enforce, assert or exercise any right, privilege, power or
      remedy conferred on the Holders pursuant to the terms of the Preferred
      Securities, or any action on the part of the Issuer granting indulgence or
      extension of any kind;

            (d) the voluntary or involuntary liquidation, dissolution, sale of
      any collateral, receivership, insolvency, bankruptcy, assignment for the
      benefit of creditors, reorganization, arrangement, composition or
      readjustment of debt of, or other similar proceedings affecting, the
      Issuer or any of the assets of the Issuer;

            (e) any invalidity of, or defect or deficiency in, the Preferred
      Securities;

            (f) the settlement or compromise of any obligation guaranteed hereby
      or hereby incurred; or

            (g) any other circumstance whatsoever that might otherwise
      constitute a legal or equitable discharge or defense of a guarantor, it
      being the intent of this Section 5.3 that the obligations of the Guarantor
      hereunder shall be absolute and unconditional under any and all
      circumstances.

There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.

      SECTION 5.4 Rights of Holders.

      The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation preference of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
or any other Person.

      SECTION 5.5 Guarantee of Payment.

      This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Debentures to Holders as provided in the
Trust Agreement.

                                       13

      SECTION 5.6 Subrogation.

      The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.

      SECTION 5.7 Independent Obligations.

      The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.

                                    ARTICLE 6
                           COVENANTS AND SUBORDINATION

      SECTION 6.1 Subordination.

      This Guarantee Agreement will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all Senior
Debt of the Guarantor.

      SECTION 6.2 Pari Passu Guarantees.

      This Guarantee Agreement shall rank pari passu with any similar Guarantee
Agreements issued by the Guarantor on behalf of the holders of Preferred
Securities issued by Principal Capital ___, Principal Capital ___ and Principal
Capital ___.

                                       14

                                    ARTICLE 7
                                   TERMINATION

      SECTION 7.1 Termination.

      This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Debentures to the Holders in exchange for
all of the Preferred Securities or (iii) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Preferred Securities or
this Guarantee Agreement.

                                    ARTICLE 8
                                  MISCELLANEOUS

      SECTION 8.1 Successors and Assigns.

      All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article Eight of the
Indenture and pursuant to which the assignee agrees in writing to perform the
Guarantor's obligations hereunder, the Guarantor shall not assign its
obligations hereunder.

      SECTION 8.2 Amendments.

      Any amendment to this Guarantee Agreement shall be in writing and executed
by the Guarantor and Guarantee Trustee. Except with respect to any changes which
do not adversely affect the rights of the Holders in any material respect (in
which case no consent of the Holders will be required), this Guarantee Agreement
may only be amended with the prior approval of the Holders of not less than a
Majority in liquidation preference of all the outstanding Preferred Securities.
The provisions of Article VI of the Trust Agreement concerning meetings of the
Holders shall apply to the giving of such approval. The Guarantee Trustee shall
not be required to enter into any amendment to this Guarantee Agreement which
affects its own rights, duties or immunities under this Guarantee Agreement. The
Guarantee Trustee shall be entitled to receive and conclusively rely on an
Opinion of Counsel and an Officer's Certificate stating that any amendment to
this Guarantee Agreement is in compliance with this Guarantee Agreement.

                                       15

      SECTION 8.3 Notices.

      Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:

            (a) if given to the Guarantor, to the address set forth below or
      such other address as the Guarantor may give notice of to the Holders:

      Principal Financial Group, Inc.
      711 High Street
      Des Moines, Iowa  50392
      Facsimile No.: (515) [               ]
      Attention: [Treasurer]

            (b) if given to the Issuer, in care of the Guarantee Trustee, at the
      Issuer's (and the Guarantee Trustee's) address set forth below or such
      other address as the Guarantee Trustee on behalf of the Issuer may give
      notice to the Holders:

      [____________________]
      c/o Principal Financial Group, Inc.
      711 High Street
      Des Moines, Iowa  50392
      Facsimile No.: (515) [               ]
      Attention: [Treasurer]

      with a copy to:

      [____________________]
      [                                   ]
      [                                   ]
      Facsimile No.: [                                   ]
      Attention: [                                   ]

            (c) if given to any Holder, at the address set forth on the books
      and records of the Issuer.

      All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

                                       16

      SECTION 8.4 Benefit.

      This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Preferred Securities.

      SECTION 8.5 Interpretation.

      In this Guarantee Agreement, unless the context otherwise requires:

            (a) capitalized terms used in this Guarantee Agreement but not
      defined in the preamble hereto have the respective meanings assigned to
      them in Section 1.1;

            (b) a term defined anywhere in this Guarantee Agreement has the same
      meaning throughout;

            (c) all references to "the Guarantee Agreement" or "this Guarantee
      Agreement" are to this Guarantee Agreement as modified, supplemented or
      amended from time to time;

            (d) all references in this Guarantee Agreement to Articles and
      Sections are to Articles and Sections of this Guarantee Agreement unless
      otherwise specified;

            (e) a term defined in the Trust Indenture Act has the same meaning
      when used in this Guarantee Agreement unless otherwise defined in this
      Guarantee Agreement or unless the context otherwise requires;

            (f) a reference to the singular includes the plural and vice versa;
      and

            (g) the masculine, feminine or neuter genders used herein shall
      include the masculine, feminine and neuter genders.

      SECTION 8.6 GOVERNING LAW.

      THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

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

                                       17

      THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.

                                       PRINCIPAL FINANCIAL GROUP, INC.

                                       By:______________________________________
                                       Name:
                                       Title:

                                       [____________________], as
                                       Guarantee Trustee

                                       By:______________________________________
                                       Name:
                                       Title:

                    [Letterhead of Debevoise & Plimpton LLP]

February 23, 2004

Principal Financial Group, Inc.
711 High Street
Des Moines, Iowa  50392

Principal Financial Services, Inc.
711 High Street
Des Moines, Iowa  50392

     Principal Financial Group, Inc. and Principal Financial Services, Inc.
      Amendment No.1 to Registration Statement on Form S-3 (No. 333-111352)

Ladies and Gentlemen:

         We have acted as special counsel to Principal Financial Group, Inc.
(the "Company") and Principal Financial Services, Inc. ("PFSI") in connection
with the filing with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Act"), of Amendment No. 1 to the Registration
Statement on Form S-3 (No. 333-111352) (the "Registration Statement"), relating
to the public offering by the Company of up to $3,000,000,000 in the aggregate
of (i) senior debt securities of the Company (the "Senior Debt Securities") to
be issued pursuant to an Indenture (the "Senior Indenture"), to be entered into
between the Company and The Bank of New York, as trustee (the "Senior Trustee"),
(ii) subordinated debt securities of the Company (the "Subordinated Debt
Securities" and together with the Senior Debt Securities, the "Debt Securities")
to be issued pursuant to a Subordinated Indenture (the "Subordinated Indenture"
and, together with the Senior Indenture, the "Indentures") to be entered into
between the Company and The Bank of New York, as trustee (the "Subordinated
Trustee"), (iii) junior subordinated debentures of the Company (the "Junior
Subordinated Debt Securities"), to be issued pursuant to a Junior Subordinated
Indenture (the "Junior Subordinated Indenture"), to be entered into between the
Company and Wilmington Trust Company, as trustee (the "Debenture Trustee"), (iv)
shares of preferred stock of the Company, par value $.01 per Share (the
"Preferred Stock"), (v) shares of Common Stock of the Company, par value $.01
per share (the "Common Stock"), (vi) depositary shares representing fractional
interests in Debt Securities or Preferred Stock (the "Depositary Shares"), (vii)
warrants representing rights to purchase Debt Securities, Preferred Stock or
Common Stock (the "Warrants") pursuant to one or more warrant agreements
("Warrant Agreements"), (viii) purchase contracts representing rights to
purchase Debt Securities, Preferred Stock, Common Stock, Depositary Shares,
Warrants, Preferred Securities (as defined below) or other property (the
"Purchase Contracts"), (ix) purchase units, representing ownership of Purchase
Contracts and Debt Securities (or undivided beneficial interests therein),
Depositary Shares, Preferred Securities (as defined below) or debt obligations
of third parties, including U.S. Treasury Securities (the "Purchase

Units"), and (x) preferred securities (the "Preferred Securities") of Principal
Capital I, Principal Capital II and Principal Capital III, each a statutory
trust formed under the laws of the State of Delaware (each, a "Trust" and
collectively, the "Trusts"), guaranteed to the extent the Trust has funds as set
forth in the Registration Statement by the Company (as such may be issued from
time to time, a "Principal Guarantee" and, together with the Debt Securities,
the Junior Subordinated Debt Securities, the Preferred Stock, the Depositary
Shares, the Common Stock, the Warrants, the Purchase Contracts, the Purchase
Units, the Preferred Securities and the PFSI Guarantee (as defined below, the
"Securities"), as well as up to an additional $600,000,000 aggregate amount of
such Securities that may be registered in accordance with Rule 462(b) under the
Act. The obligations of the Company with respect to the Senior Debt Securities,
the Subordinated Debt Securities, the Junior Subordinated Debt Securities, the
Preferred Stock, the Depositary Shares, the Warrants, the Purchase Contracts,
the Purchase Units or a Principal Guarantee, may be guaranteed by PFSI pursuant
to one or more guarantees (each, a "PFSI Guarantee").

         In so acting, we have examined such corporate records, certificates and
other documents and such questions of law as we have considered necessary for
the purposes of this opinion.

Upon the basis of such examination, we are of the following opinion:

1.       When (i) the terms, and the execution and delivery, of the Senior
         Indenture have been duly authorized and approved by all necessary
         action of the board of directors of the Company or a duly authorized
         committee thereof (the "Board of Directors"), (ii) the Senior Indenture
         has been duly executed and delivered by the Company and the Senior
         Trustee, (iii) (a) the terms of the Senior Debt Securities and their
         issuance and sale have been duly authorized and approved by all
         necessary action of the Board of Directors and (b) the terms of the
         Senior Debt Securities have been duly established in accordance with
         the Senior Indenture and so as not to violate any applicable law, rule
         or regulation or result in a default under or breach of any agreement
         or instrument binding upon the Company and so as to comply with any
         requirement or restriction imposed by any court or governmental body
         having jurisdiction over the Company and (iv) the Senior Debt
         Securities have been duly executed, authenticated, issued and delivered
         as contemplated by the Registration Statement and any prospectus
         supplement relating thereto and in accordance with the Senior Indenture
         and any underwriting agreement, Warrants or Warrant Agreements relating
         to such issuance, against payment of the consideration fixed therefor
         by the Board of Directors, the Senior Debt Securities will be validly
         issued and will constitute valid and legally binding obligations of the
         Company enforceable against the Company in accordance with their terms.

2.       When (i) the terms, and the execution and delivery, of the Subordinated
         Indenture have been duly authorized and approved by all necessary
         action of the Board of Directors, (ii) the Subordinated Indenture has
         been duly executed and delivered by the Company and the Subordinated
         Trustee, (iii) (a) the terms of the

                                       2

         Subordinated Debt Securities and their issuance and sale have been duly
         authorized and approved by all necessary action of the Board of
         Directors and (b) the terms of the Subordinated Debt Securities have
         been established in accordance with the Subordinated Indenture and so
         as not to violate any applicable law, rule or regulation or result in a
         default under or breach of any agreement or instrument binding upon the
         Company and so as to comply with any requirement or restriction imposed
         by any court or governmental body having jurisdiction over the Company
         and (iv) the Subordinated Debt Securities have been duly executed,
         authenticated, issued and delivered as contemplated by the Registration
         Statement and any prospectus supplement relating thereto and in
         accordance with the Subordinated Indenture and any underwriting
         agreement, Warrants or Warrant Agreements relating to such issuance,
         against payment of the consideration fixed therefor by the Board of
         Directors, the Subordinated Debt Securities will be validly issued and
         will constitute valid and legally binding obligations of the Company
         enforceable against the Company in accordance with their terms.

3.       When (i) the terms, and the execution and delivery, of the Junior
         Subordinated Indenture have been duly authorized and approved by all
         necessary action of the Board of Directors, (ii) the Junior
         Subordinated Indenture has been duly executed and delivered by the
         Company and the Debenture Trustee, (iii) (a) the terms of the Junior
         Subordinated Debt Securities and their issuance and sale have been duly
         authorized and approved by all necessary action of the Board of
         Directors and (b) the terms of the Junior Subordinated Debt Securities
         have been established in accordance with the Junior Subordinated
         Indenture and so as not to violate any applicable law, rule or
         regulation or result in a default under or breach of any agreement or
         instrument binding upon the Company and so as to comply with any
         requirement or restriction imposed by any court or governmental body
         having jurisdiction over the Company and (iv) the Junior Subordinated
         Debt Securities have been duly executed, authenticated, issued and
         delivered as contemplated by the Registration Statement and any
         prospectus supplement relating thereto and in accordance with the
         Junior Subordinated Indenture and any underwriting agreement relating
         to such issuance, against payment of the consideration fixed therefor
         by the Board of Directors, the Junior Subordinated Debt Securities will
         be validly issued and will constitute valid and binding obligations of
         the Company enforceable against the Company in accordance with their
         terms.

4.       When (i) the terms of the Preferred Stock and of its issuance and sale
         have been duly established in conformity with the Company's Amended and
         Restated Certificate of Incorporation, as amended, and authorized and
         approved by all necessary action of the Board of Directors, so as not
         to violate any applicable law, rule or regulation or result in a
         default under or breach of any agreement or instrument binding upon the
         Company and so as to comply with any requirement or restriction imposed
         by any court or governmental body having jurisdiction over the Company,
         (ii) a Certificate of Designation fixing and determining the terms of
         the Preferred Stock has been duly filed with the Secretary of State of
         the State of Delaware and (iii) certificates for the shares of the
         Preferred Stock have been duly executed, authenticated, issued and
         delivered as contemplated by the Registration

                                       3

         Statement and any prospectus supplement relating thereto and in
         accordance with any underwriting agreement, Warrants or Warrant
         Agreements or Purchase Contracts relating to such issuance, against
         payment of the consideration fixed therefor by the Board of Directors,
         the Preferred Stock will be duly authorized, validly issued, fully paid
         and nonassessable.

5.       When (i) the terms, and the execution and delivery, of the Deposit
         agreement or Agreements relating to the Depositary Shares and the terms
         of the Depositary Shares and of their issuance and sale have been duly
         authorized and approved by all necessary action of the Board of
         Directors, (ii) the Depositary Agreement or Agreements relating to the
         Depositary Shares and the depositary receipts evidencing the Depositary
         Shares (the "Depositary Receipts") have been duly authorized, executed
         and delivered by the Company and such depositary as shall have been
         duly appointed by the Company (the "Depositary"), (iii) the terms of
         the Depositary Shares and the Depositary Receipts have been established
         in accordance with the applicable Deposit Agreement so as not to
         violate any applicable law, rule or regulation or result in a default
         under or breach of any agreement or instrument binding upon the
         Company, and so as to comply with any applicable requirement or
         restriction imposed by any court or governmental authority having
         jurisdiction over the Company, (iv) (a) (1) the Indentures have been
         duly authorized, executed and delivered by the Company and the Senior
         Trustee or the Subordinated Trustee, as the case may be, as
         contemplated in paragraph 1 or 2 above, as the case may be, and (2) the
         Debt Securities relating to the Depositary Shares have been duly
         authorized, executed, authenticated, issued and delivered as
         contemplated in paragraph 1 or 2 above, as the case may be, or (b) the
         shares of Preferred Stock relating to the Depositary Shares have been
         duly authorized and validly issued and are fully paid and
         non-assessable as contemplated in paragraph 4 above and, in the case of
         either (a) or (b), have been deposited with the Depositary under the
         applicable Deposit Agreement, and (v) the Depositary Receipts have been
         duly executed, countersigned, registered and delivered, as contemplated
         by the Registration Statement and any prospectus supplement related
         thereto, and in accordance with the terms of the Deposit Agreement and
         any underwriting agreement relating to such issuance, against payment
         of the consideration fixed therefor by the Board of Directors, the
         Depositary Receipts will be validly issued and will entitle the holders
         thereof to the rights specified therein and in the Deposit Agreement.

6.       When (i) the terms of the issuance and sale of the Common Stock have
         been duly authorized and approved by all necessary action of the Board
         of Directors so as not to violate any applicable law, rule or
         regulation or result in a default under or a breach of any agreement or
         instrument binding upon the Company and so as to comply with any
         requirement or restriction imposed by any court or governmental body
         having jurisdiction over the Company and (ii) certificates for the
         shares of Common Stock have been duly executed, authenticated, issued
         and delivered as contemplated by the Registration Statement and any
         prospectus supplement relating thereto, and in accordance with any
         underwriting agreement, Warrants or Warrant Agreements or Purchase
         Contracts relating to such issuance, against

                                       4

         payment of the consideration fixed therefor by the Board of Directors,
         the Common Stock will be duly authorized, validly issued, fully paid
         and nonassessable.

7.       When (i) the terms, and the execution and delivery, of the Warrants and
         any Warrant Agreement or Agreements relating to the Warrants and the
         terms of the issuance and sale of the Warrants and related matters have
         been duly authorized and approved by all necessary action of the Board
         of Directors, (ii) the Warrant Agreement or Agreements relating to the
         Warrants have been duly executed and delivered by the Company and such
         warrant agent as shall have been duly appointed by the Company, (iii)
         the terms of the Warrants have been established in accordance with the
         applicable Warrant Agreement and so as not to violate any applicable
         law, rule or regulation or result in a default under or a breach of any
         agreement or instrument binding upon the Company and so as to comply
         with any requirement or restriction imposed by any court or
         governmental body having jurisdiction over the Company and (iv) the
         Warrants or certificates representing the Warrants have been duly
         executed, authenticated, issued and delivered as contemplated by the
         Registration Statement and any prospectus supplement relating thereto,
         and in accordance with the terms of any Warrant Agreement and
         underwriting agreement relating to such issuance, against payment of
         the consideration fixed therefor by the Board of Directors, the
         Warrants will constitute valid and legally binding obligations of the
         Company enforceable against the Company in accordance with their terms.

8.       When (i) the terms, and the execution and delivery, of the Purchase
         Contracts and the terms of the issuance and sale thereof and related
         matters have been duly authorized and approved by all necessary action
         of the Board of Directors, (ii) the terms of the Purchase Contracts
         have been established so as not to violate any applicable law, rule or
         regulation or result in a default under or a breach of any agreement or
         instrument binding upon the Company and so as to comply with any
         requirement or restriction imposed by any court or governmental body
         having jurisdiction over the Company and (iii) the Purchase Contracts
         have been duly executed and delivered by the Company and such contract
         agent as shall have been duly appointed by the Company and any
         certificates representing Purchase Contracts have been duly executed,
         authenticated, if required, issued and delivered, in each case, as
         contemplated by the Registration Statement and any prospectus
         supplement relating thereto, and in accordance with any Purchase
         Contract and underwriting agreement related to such issuance, against
         payment of the consideration fixed therefor by the Board of Directors,
         the Purchase Contracts will constitute valid and legally binding
         obligations of the Company enforceable against the Company in
         accordance with their terms.

9.       When (i) the terms of the Purchase Units and the terms of the issuance
         and sale thereof and related matters have been duly authorized and
         approved by all necessary action of the Board of Directors, (ii) the
         terms of the Purchase Units have been established so as not to violate
         any applicable law, rule or regulation or result in a default under or
         a breach of any agreement or instrument binding upon

                                       5

         the Company and so as to comply with any requirement or restriction
         imposed by any court or governmental body having jurisdiction over the
         Company, (iii) the Purchase Contracts that form a part of the Purchase
         Units have been duly authorized, executed, authenticated (if required),
         issued and delivered as contemplated in paragraph 8 above, (iv) (a) (1)
         the Indenture relating to the Debt Securities (or undivided beneficial
         interests therein) that form a part of the Purchase Units or that are
         deposited under the Deposit Agreement referred to below has been duly
         authorized, executed and delivered by the Company and the Senior
         Trustee or the Subordinated Trustee, as the case may be, as
         contemplated in paragraph 1 or 2 above, as the case may be, and (2) the
         Debt Securities (or undivided beneficial interests therein) that form a
         part of the Purchase Units or that have been deposited under the
         Deposit Agreement referred to below have been duly authorized,
         executed, authenticated, issued and delivered as contemplated in
         paragraph 1 or 2 above, as the case may be, (b) the Preferred Stock
         that form a part of the Purchase Units have been duly authorized,
         executed, authenticated, issued and delivered as contemplated in
         paragraph 4 above, (c) (1) the Depositary Agreement or Agreements
         relating to the Depositary Shares that form a part of the Purchase
         Units, the related Depositary Shares and the Depositary Receipts
         evidencing such Depositary Shares have been duly authorized, executed,
         authenticated, if required, and delivered as contemplated by paragraph
         5 above and (3) either (A) the Indentures have been duly authorized,
         executed and delivered by the Senior Trustee or the Subordinated
         Trustee, as the case may be, as contemplated in paragraph 1 or 2 above,
         as the case may be, and the Debt Securities relating to the Depositary
         Shares that form a part of the Purchase Units have been duly
         authorized, executed, authenticated, issued and delivered as
         contemplated in paragraph 1 or 2 above, as the case may be, (d) the
         debt obligations, including U.S. Treasury Securities, of third parties
         that form a part of the Purchase Units have been duly authorized,
         issued and delivered in accordance with their terms or (e) the
         preferred securities of the Trusts that form part of the Purchase Units
         have been duly authorized, issued and delivered in accordance with
         their terms, and (v) the certificates representing the Purchase Units
         have been duly executed, authenticated, if required, issued and
         delivered as contemplated by the Registration Statement and any
         prospectus supplement relating thereto, and in accordance with any
         Purchase Contract and underwriting agreement relating to such issuance,
         against payment of the consideration fixed therefor by the Board of
         Directors, the Purchase Units will be duly authorized and validly
         issued.

10.      When (i) the terms of a Principal Guarantee have been duly authorized
         and approved by all necessary action of the Board of Directors so as
         not to violate any applicable law, rule or regulation or result in a
         default under or a breach of any agreement or instrument binding upon
         the Company and so as to comply with any requirement or restriction
         imposed by any court or governmental body having jurisdiction over the
         Company and (ii) such Principal Guarantee has been validly executed and
         delivered by the Company, such Principal Guarantee will constitute a
         valid and legally binding obligation of the Company enforceable against
         the Company in accordance with its terms.

                                       6

11.      If the Debt Securities are exchangeable or convertible into Common
         Stock, when (i) the terms of the issuance of the Common Stock have been
         duly authorized and approved by all necessary action of the Board of
         Directors, and (ii) the shares of Common Stock have been issued in
         exchange for or upon conversion of such Debt Securities as contemplated
         by the Registration Statement and any prospectus supplement relating
         thereto, in accordance with the terms of the Debt Securities and the
         applicable Senior Indenture or Subordinated Indenture, as the case may
         be, so as not to violate any applicable law, rule or regulation or
         result in a default under or a violation of any agreement or instrument
         binding upon the Company, and so as to comply with any applicable
         requirement or restriction imposed by any court or governmental
         authority having jurisdiction over the Company, the shares of Common
         Stock so issued will be duly authorized, validly issued, fully paid and
         non-assessable.

12.      When (i) the terms of a PFSI Guarantee have been duly authorized and
         approved by all necessary action of the board of directors of PFSI so
         as not to violate any applicable law, rule or regulation or result in a
         default under or a breach of any agreement or instrument binding upon
         PFSI and so as to comply with any requirement or restriction imposed by
         any court or governmental body having jurisdiction over PFSI and (ii)
         such PFSI Guarantee has been validly executed and delivered by PFSI,
         such PFSI Guarantee will constitute a valid and legally binding
         obligation of PFSI enforceable against PFSI in accordance with its
         terms.

         The opinions set forth above are subject to the following additional
qualifications:

         (a) Our opinions in paragraphs 1, 2, 3, 7, 8, 10 and 12 above are
subject to the effects of (i) bankruptcy, insolvency, fraudulent conveyance,
fraudulent transfer, reorganization, moratorium or other similar laws relating
to or affecting enforcement of creditors' rights or remedies generally, (ii)
general principles of equity, whether such principles are considered in a
proceeding of law or in equity, and (iii) an implied covenant of good faith,
reasonableness and fair dealing, and standards of materiality.

         (b) With respect to the opinions set forth in paragraphs 1 through 12,
we express no opinion as to (1) any waiver of inconvenient forum set forth in
any agreement or (2) any provision relating to judgments in currencies other
than United States dollars. We express no opinion concerning whether a United
States Federal court would accept jurisdiction in any dispute, action, suit or
proceeding arising out of or relating to any agreement or the transactions
contemplated thereby.

         (c) The opinions expressed in paragraphs 1 through 12 above are limited
to the laws of the State of New York and the General Corporation Law of the
State of Delaware, including the applicable provisions of the Delaware
Constitution and the reported cases interpreting those laws.

         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the heading "Legal
Opinions" in the Prospectus forming a part thereof and to the incorporation by
reference of this opinion

                                       7

and consent as exhibits to any registration statement filed in accordance with
Rule 462(b) under the Act relating to the Securities. In giving such consent, we
do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.

                                           Very truly yours,

                                           /s/ Debevoise & Plimpton LLP

                                       8

                                                                               .
                                                                               .
                                                                               .

                                                                   EXHIBIT 12.01

                         PRINCIPAL FINANCIAL GROUP, INC.

                 COMPUTATION OF EARNINGS TO FIXED CHARGES RATIO

                                                  For the
                                                Nine Months
                                                   Ended                                 For the
                                               September 30,                     Year Ended December 31,
                                           --------------------   -------------------------------------------------------
                                             2003        2002       2002       2001        2000        1999        1998
                                           --------    --------   --------   --------    --------    --------    --------
                                                                           ($ in millions)
                                                                                          
1. Income from continuing operations
      before income taxes ............   $    741.9  $    543.3 $    665.8 $    464.1  $    840.2  $  1,069.1  $    735.2
2. Interest expense ..................         77.4        71.8       99.2       96.7       116.8       145.4        96.9
3. Interest factor of rental expense .          6.7         7.7        8.9       10.3        16.1        10.5        10.7
4. Net (undistributed) distributed
      income from equity investees ...        (19.0)        3.5        4.3      (17.4)      (27.1)      (99.7)      (12.9)
                                           --------    --------   --------   --------    --------    --------    --------
5. Earnings before interest credited
      on investment products .........        807.0       626.3      778.2      553.7       946.0     1,125.3       829.9
6. Interest credited on investment
      products .......................        551.4       558.8      743.4      773.1       723.5       709.5       582.7
                                           --------    --------   --------   --------    --------    --------    --------
7. Earnings ..........................   $  1,358.4  $  1,185.1 $  1,521.6 $  1,326.8  $  1,669.5  $  1,834.8  $  1,412.6
                                           ========    ========   ========   ========    ========    ========    ========
8.  Interest expense .................   $     77.4  $     71.8 $     99.2 $     96.7  $    116.8  $    145.4  $     96.9
9.  Interest factor of rental expense           6.7         7.7        8.9       10.3        16.1        10.5        10.7
10. Preferred stock dividend
       requirements of majority-owned
       subsidiaries (non-intercompany)          0.6         0.2        0.4         --          --          --          --
                                           --------    --------   --------   --------    --------    --------    --------
11. Fixed charges before interest
       credited on investment products         84.7        79.7      108.5      107.0       132.9       155.9       107.6
12. Interest credited on investment
       products ......................        551.4       558.8      743.4      773.1       723.5       709.5       582.7
                                           --------    --------   --------   --------    --------    --------    --------
13. Fixed charges ....................   $    636.1  $    638.5 $    851.9 $    880.1  $    856.4  $    865.4  $    690.3
                                           ========    ========   ========   ========    ========    ========    ========
14. Ratio of earnings to fixed charges
       before interest credited on
       investment products (Line item
       5/Line item 11) ...............          9.5         7.9        7.2        5.2         7.1         7.2         7.7
15. Ratio of earnings to fixed charges
       (Line item 7/Line item 13) ....          2.1         1.9        1.8        1.5         1.9         2.1         2.0

                                                                   EXHIBIT 23.01

                         CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement on Form S-3 (No. 333-111352) and related
Prospectus of Principal Financial Group, Inc. for the registration of its debt
securities, junior subordinated debentures, preferred stock, common stock,
depositary shares, warrants, purchase contracts and purchase units with a total
initial offering price of up to $3,000,000,000 and to the incorporation by
reference therein of our reports dated January 31, 2003, with respect to the
consolidated financial statements and schedules of Principal Financial Group,
Inc. included in its Annual Report (Form 10-K) for the year ended December 31,
2002, filed with the Securities and Exchange Commission on March 5, 2003.

/s/ Ernst & Young LLP

Des Moines, Iowa
February 17, 2004

                                                                   EXHIBIT 25.08

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =

                                    FORM T-1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|

                           ---------------------------
                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                     13-5160382
(State of incorporation                                      (I.R.S. employer
if not a U.S. national bank)                                 identification no.)

One Wall Street, New York, N.Y.                              10286
(Address of principal executive offices)                     (Zip code)

                           ---------------------------
                         Principal Financial Group, Inc.
              (Exact name of obligor as specified in its charter)

Delaware                                                     42-1520346
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                       Principal Financial Services, Inc.
               (Exact name of obligor as specified in its charter)

Iowa                                                         42-1520348
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

711 High Street
Des Moines, Iowa                                             50392
(Address of principal executive offices)                     (Zip code)

                           ---------------------------
                             Senior Debt Securities
                       (Title of the indenture securities)

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =

1.       GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
         TRUSTEE:

         (A)      NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
                  WHICH IT IS SUBJECT.

- --------------------------------------------------------------------------------
                          Name                                    Address
- --------------------------------------------------------------------------------
                                                 
         Superintendent of Banks of the State of    2 Rector Street, New York, N.Y.
         New York                                   10006, and Albany, N.Y. 12203

         Federal Reserve Bank of New York           33 Liberty Plaza, New York, N.Y.
                                                    10045

         Federal Deposit Insurance Corporation      Washington, D.C. 20429

         New York Clearing House Association        New York, New York 10005

         (B)      WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

         Yes.

2.       AFFILIATIONS WITH OBLIGOR.

         IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
         AFFILIATION.

         None.

16.      LIST OF EXHIBITS.

         EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
         ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
         RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
         C.F.R. 229.10(D).

         1.       A copy of the Organization Certificate of The Bank of New York
                  (formerly Irving Trust Company) as now in effect, which
                  contains the authority to commence business and a grant of
                  powers to exercise corporate trust powers. (Exhibit 1 to
                  Amendment No. 1 to Form T-1 filed with Registration Statement
                  No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
                  Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
                  filed with Registration Statement No. 33-29637.)

         4.       A copy of the existing By-laws of the Trustee. (Exhibit 4 to
                  Form T-1 filed with Registration Statement No. 33-31019.)

         6.       The consent of the Trustee required by Section 321(b) of the
                  Act. (Exhibit 6 to Form T-1 filed with Registration Statement
                  No. 33-44051.)

         7.       A copy of the latest report of condition of the Trustee
                  published pursuant to law or to the requirements of its
                  supervising or examining authority.

                                      -2-

                                    SIGNATURE

         Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 12th day of February, 2004.

                                            THE BANK OF NEW YORK

                                            By:  /S/      ROBERT A. MASSIMILO
                                                 -------------------------------
                                                  Name:   ROBERT A. MASSIMILO
                                                  Title:  VICE PRESIDENT

                                      -3-

                                                                       EXHIBIT 7

- --------------------------------------------------------------------------------
                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
2003, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.

                                                               

                                                                  Dollar Amounts
ASSETS                                                              In Thousands
Cash and balances due from depository institutions:
   Noninterest-bearing balances and currency and coin..               $3,688,426
   Interest-bearing balances...........................                4,380,259
Securities:
   Held-to-maturity securities.........................                  270,396
   Available-for-sale securities.......................               21,509,356
Federal funds sold in domestic offices.................                1,269,945
Securities purchased under agreements to
   resell..............................................                5,320,737
Loans and lease financing receivables:
   Loans and leases held for sale......................                  629,178
   Loans and leases, net of unearned
     income...............38,241,326
   LESS: Allowance for loan and
     lease losses............813,502
   Loans and leases, net of unearned
     income and allowance..............................               37,427,824
Trading Assets.........................................                6,323,529
Premises and fixed assets (including capitalized
   leases).............................................                  938,488
Other real estate owned................................                      431
Investments in unconsolidated subsidiaries and
   associated companies................................                  256,230
Customers' liability to this bank on acceptances
   outstanding.........................................                  191,307
Intangible assets......................................
   Goodwill............................................                2,562,478
   Other intangible assets.............................                  798,536
Other assets...........................................                6,636,012
                                                                     -----------

                                                                  
Total assets...........................................              $92,203,132
                                                                     ===========
LIABILITIES
Deposits:
   In domestic offices.................................              $35,637,801
   Noninterest-bearing.......................15,795,823
   Interest-bearing..........................19,841,978
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs............................               23,759,599
   Noninterest-bearing..........................599,397
   Interest-bearing..........................23,160,202
Federal funds purchased in domestic
  offices...........................................                     464,907
Securities sold under agreements to repurchase.........                  693,638
Trading liabilities....................................                2,634,445
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases).......                                   11,168,402
Bank's liability on acceptances executed and
   outstanding.........................................                  193,690
Subordinated notes and debentures......................                2,390,000
Other liabilities......................................                6,573,955
                                                                     -----------
Total liabilities......................................              $83,516,437
Minority interest in consolidated                                    ===========
   subsidiaries......................................                    519,418

EQUITY CAPITAL
Perpetual preferred stock and related
   surplus...........................................                          0
Common stock...........................................                1,135,284
Surplus................................................                2,057,234
Retained earnings......................................                4,892,597
Accumulated other comprehensive income.........                           82,162
Other equity capital components.....................                           0
- --------------------------------------------------------------------------------
Total equity capital...................................                8,167,277
                                                                     -----------
Total liabilities minority interest and equity capital...            $92,203,132
                                                                     ===========

        I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.

                                                               Thomas J. Mastro,
                                           Senior Vice President and Comptroller

        We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has been examined by
us, and to the best of our knowledge and belief has been prepared in conformance
with the instructions and is true and correct.

Thomas A. Renyi
Gerald L. Hassell              Directors
Alan R. Griffith

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

                                                                  EXHIBIT 25.09

 = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
                                    FORM T-1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|

                           ---------------------------
                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                     13-5160382
(State of incorporation                                      (I.R.S. employer
if not a U.S. national bank)                                 identification no.)

One Wall Street, New York, N.Y.                              10286
(Address of principal executive offices)                     (Zip code)

                           ---------------------------
                         Principal Financial Group, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     42-1520346
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

                       Principal Financial Services, Inc.
               (Exact name of obligor as specified in its charter)

Iowa                                                         42-1520348
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)

711 High Street
Des Moines, Iowa                                             50392
(Address of principal executive offices)                     (Zip code)

                           ---------------------------
                          Subordinated Debt Securities
                       (Title of the indenture securities)

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =

1.  GENERAL INFORMATION.  FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

    (A)  NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
         IS SUBJECT.

    ----------------------------------------------------------------------------
                Name                                    Address
    ----------------------------------------------------------------------------

    Superintendent of Banks of the State of   2 Rector Street, New York, N.Y.
    New York                                  10006, and Albany, N.Y. 12203

    Federal Reserve Bank of New York          33 Liberty Plaza, New York, N.Y.
                                              10045

    Federal Deposit Insurance Corporation     Washington, D.C.  20429

    New York Clearing House Association       New York, New York   10005

    (B)  WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

    Yes.

2.  AFFILIATIONS WITH OBLIGOR.

    IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
    AFFILIATION.

    None.

16. LIST OF EXHIBITS.

    EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
    INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
    7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
    229.10(D).

    1.    A copy of the Organization Certificate of The Bank of New York
          (formerly Irving Trust Company) as now in effect, which
          contains the authority to commence business and a grant of
          powers to exercise corporate trust powers. (Exhibit 1 to
          Amendment No. 1 to Form T-1 filed with Registration Statement
          No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
          Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
          filed with Registration Statement No. 33-29637.)

    4.    A copy  of the  existing  By-laws  of the  Trustee.  (Exhibit  4 to
          Form  T-1  filed  with  Registration Statement No. 33-31019.)

    6.    The consent of the  Trustee  required  by Section  321(b) of the Act.
          (Exhibit 6 to Form T-1 filed with Registration Statement
          No. 33-44051.)

    7.    A  copy  of  the  latest  report  of  condition  of  the  Trustee
          published  pursuant  to law or to the requirements of its supervising
          or examining authority.

                                       -2-

                                    SIGNATURE

         Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 12th day of February, 2004

                                   THE BANK OF NEW YORK

                                   By:  /s/     ROBERT A. MASSIMILO
                                        ----------------------------------------
                                        Name:   ROBERT A. MASSIMILO
                                        Title:  VICE PRESIDENT

                                       -3-

                                                                       EXHIBIT 7

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

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
2003, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.

                                                                                   Dollar Amounts
ASSETS                                                                              In Thousands
                                                                                 
Cash and balances due from depository
   institutions:
   Noninterest-bearing balances and currency and coin .........................     $ 3,688,426
   Interest-bearing balances ..................................................       4,380,259
Securities:
   Held-to-maturity securities ................................................         270,396
   Available-for-sale securities ..............................................      21,509,356
Federal funds sold in domestic offices ........................................       1,269,945
Securities purchased under agreements to
   resell .....................................................................       5,320,737
Loans and lease financing receivables:
   Loans and leases held for sale .............................................         629,178
   Loans and leases, net of unearned
     income ...................................................................      38,241,326
   LESS: Allowance for loan and
     lease losses .............................................................         813,502
   Loans and leases, net of unearned
     income and allowance .....................................................      37,427,824
Trading Assets ................................................................       6,323,529
Premises and fixed assets (including capitalized
   leases) ....................................................................         938,488
Other real estate owned .......................................................             431
Investments in unconsolidated subsidiaries and
   associated companies .......................................................         256,230
Customers' liability to this bank on acceptances
   outstanding ................................................................         191,307
Intangible assets
   Goodwill ...................................................................       2,562,478
   Other intangible assets ....................................................         798,536
Other assets ..................................................................       6,636,012
                                                                                    -----------

                                                                                 
Total assets ..................................................................     $92,203,132
                                                                                    ===========
LIABILITIES
Deposits:
   In domestic offices ........................................................     $35,637,801
   Noninterest-bearing ........................................................      15,795,823
   Interest-bearing ...........................................................      19,841,978
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs ...................................................      23,759,599
   Noninterest-bearing ........................................................         599,397
   Interest-bearing ...........................................................      23,160,202
Federal funds purchased in domestic
  offices .....................................................................         464,907
Securities sold under agreements to repurchase ................................         693,638
Trading liabilities ...........................................................       2,634,445
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases) ..................................................      11,168,402
Bank's liability on acceptances executed and
   outstanding ................................................................         193,690
Subordinated notes and debentures .............................................       2,390,000
Other liabilities .............................................................       6,573,955
                                                                                    -----------
Total liabilities .............................................................     $83,516,437
                                                                                    ===========
Minority interest in consolidated
   subsidiaries ...............................................................         519,418

EQUITY CAPITAL
Perpetual preferred stock and related
   surplus ....................................................................               0
Common stock ..................................................................       1,135,284
Surplus .......................................................................       2,057,234
Retained earnings .............................................................       4,892,597
Accumulated other comprehensive income ........................................          82,162
Other equity capital components ...............................................               0
- -----------------------------------------------------------------------------------------------
Total equity capital ..........................................................       8,167,277
                                                                                    -----------
Total liabilities minority interest and equity capital ........................     $92,203,132
                                                                                    ===========

         I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.

                                                               Thomas J. Mastro,
                                           Senior Vice President and Comptroller

         We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has been examined by
us, and to the best of our knowledge and belief has been prepared in conformance
with the instructions and is true and correct.

Thomas A. Renyi
Gerald L. Hassell
Alan R. Griffith                                       Directors

                                                                   Exhibit 25.10

                                                                Registration No.

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM T-1

         STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
                  OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)

                            WILMINGTON TRUST COMPANY
               (Exact name of trustee as specified in its charter)

        Delaware                                       51-0055023
(State of incorporation)                    (I.R.S. employer identification no.)

                               Rodney Square North
                            1100 North Market Street
                           Wilmington, Delaware 19890
                    (Address of principal executive offices)

                               Cynthia L. Corliss
                        Vice President and Trust Counsel
                            Wilmington Trust Company
                               Rodney Square North
                           Wilmington, Delaware 19890
                                 (302) 651-8516
            (Name, address and telephone number of agent for service)

                       PRINCIPAL FINANCIAL SERVICES, INC.
               (Exact name of obligor as specified in its charter)

          Iowa                                           42-1520348
(State of incorporation)                    (I.R.S. employer identification no.)

           711 High Street
          Des Moines, Iowa                                          50392
(Address of principal executive offices)                          (Zip Code)

               Guarantee by Principal Financial Services, Inc. of
        Junior Subordinated Debentures of Principal Financial Group, Inc.
                       (Title of the indenture securities)

ITEM 1.  GENERAL INFORMATION.

                  Furnish the following information as to the trustee:

         (a)      Name and address of each examining or supervising authority to
                  which it is subject.

                  Federal Deposit Insurance Co.         State Bank Commissioner
                  Five Penn Center                      Dover, Delaware
                  Suite #2901
                  Philadelphia, PA

         (b)      Whether it is authorized to exercise corporate trust powers.

                  The trustee is authorized to exercise corporate trust powers.

ITEM 2.  AFFILIATIONS WITH THE OBLIGOR.

                  If the obligor is an affiliate of the trustee, describe each
                  affiliation:

                  Based upon an examination of the books and records of the
         trustee and upon information furnished by the obligor, the obligor is
         not an affiliate of the trustee.

ITEM 16. LIST OF EXHIBITS.

         List below all exhibits filed as part of this Statement of Eligibility
         and Qualification.

         A.       Copy of the Charter of Wilmington Trust Company, which
                  includes the certificate of authority of Wilmington Trust
                  Company to commence business and the authorization of
                  Wilmington Trust Company to exercise corporate trust powers.

         B.       Copy of By-Laws of Wilmington Trust Company.

         C.       Consent of Wilmington Trust Company required by Section 321(b)
                  of Trust Indenture Act.

         D.       Copy of most recent Report of Condition of Wilmington Trust
                  Company.

         Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 13th day
of February, 2004.

                                             WILMINGTON TRUST COMPANY

[SEAL]

Attest:/s/ Janel Havrilla                      By /s/ Donald G. MacKelcan
       ----------------------                  ---------------------------------
       Assistant Secretary                     Name: Donald G. MacKelcan
                                               Title:  Vice President

                                       2

                                    EXHIBIT A

                                 AMENDED CHARTER

                            WILMINGTON TRUST COMPANY

                              WILMINGTON, DELAWARE

                           AS EXISTING ON MAY 9, 1987

                                 AMENDED CHARTER
                                       OR
                              ACT OF INCORPORATION
                                       OF
                            WILMINGTON TRUST COMPANY

       WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:

            FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.

            SECOND: - The location of its principal office in the State of
            Delaware is at Rodney Square North, in the City of Wilmington,
            County of New Castle; the name of its resident agent is WILMINGTON
            TRUST COMPANY whose address is Rodney Square North, in said City. In
            addition to such principal office, the said corporation maintains
            and operates branch offices in the City of Newark, New Castle
            County, Delaware, the Town of Newport, New Castle County, Delaware,
            at Claymont, New Castle County, Delaware, at Greenville, New Castle
            County Delaware, and at Milford Cross Roads, New Castle County,
            Delaware, and shall be empowered to open, maintain and operate
            branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
            2120 Market Street, and 3605 Market Street, all in the City of
            Wilmington, New Castle County, Delaware, and such other branch
            offices or places of business as may be authorized from time to time
            by the agency or agencies of the government of the State of Delaware
            empowered to confer such authority.

            THIRD: - (a) The nature of the business and the objects and purposes
            proposed to be transacted, promoted or carried on by this
            Corporation are to do any or all of the things herein mentioned as
            fully and to the same extent as natural persons might or could do
            and in any part of the world, viz.:

                    (1) To sue and be sued, complain and defend in any Court of
                    law or equity and to make and use a common seal, and alter
                    the seal at pleasure, to hold, purchase, convey, mortgage or
                    otherwise deal in real and personal estate and property, and
                    to appoint such officers and agents as the business of the
                    Corporation shall require, to make by-laws not inconsistent
                    with the Constitution or laws of the United States or of
                    this State, to discount bills, notes or other evidences of
                    debt, to receive deposits of money, or securities for money,
                    to buy gold and silver bullion and foreign coins, to buy and
                    sell bills of exchange, and generally to use, exercise and
                    enjoy all the powers, rights, privileges and franchises
                    incident to a corporation which are proper or necessary for
                    the transaction of the business of the Corporation hereby
                    created.

                    (2) To insure titles to real and personal property, or any
                    estate or interests therein, and to guarantee the holder of
                    such property, real or personal, against any claim or
                    claims, adverse to his interest therein, and to prepare and
                    give certificates of title for any lands or premises in the
                    State of Delaware, or elsewhere.

                    (3) To act as factor, agent, broker or attorney in the
                    receipt, collection, custody, investment and management of
                    funds, and the purchase, sale, management and disposal of
                    property of all descriptions, and to prepare and execute all
                    papers which may be necessary or proper in such business.

                    (4) To prepare and draw agreements, contracts, deeds,
                    leases, conveyances, mortgages, bonds

                    and legal papers of every description, and to carry on the
                    business of conveyancing in all its branches.

                    (5) To receive upon deposit for safekeeping money, jewelry,
                    plate, deeds, bonds and any and all other personal property
                    of every sort and kind, from executors, administrators,
                    guardians, public officers, courts, receivers, assignees,
                    trustees, and from all fiduciaries, and from all other
                    persons and individuals, and from all corporations whether
                    state, municipal, corporate or private, and to rent boxes,
                    safes, vaults and other receptacles for such property.

                    (6) To act as agent or otherwise for the purpose of
                    registering, issuing, certificating, countersigning,
                    transferring or underwriting the stock, bonds or other
                    obligations of any corporation, association, state or
                    municipality, and may receive and manage any sinking fund
                    therefor on such terms as may be agreed upon between the two
                    parties, and in like manner may act as Treasurer of any
                    corporation or municipality.

                    (7) To act as Trustee under any deed of trust, mortgage,
                    bond or other instrument issued by any state, municipality,
                    body politic, corporation, association or person, either
                    alone or in conjunction with any other person or persons,
                    corporation or corporations.

                    (8) To guarantee the validity, performance or effect of any
                    contract or agreement, and the fidelity of persons holding
                    places of responsibility or trust; to become surety for any
                    person, or persons, for the faithful performance of any
                    trust, office, duty, contract or agreement, either by itself
                    or in conjunction with any other person, or persons,
                    corporation, or corporations, or in like manner become
                    surety upon any bond, recognizance, obligation, judgment,
                    suit, order, or decree to be entered in any court of record
                    within the State of Delaware or elsewhere, or which may now
                    or hereafter be required by any law, judge, officer or court
                    in the State of Delaware or elsewhere.

                    (9) To act by any and every method of appointment as
                    trustee, trustee in bankruptcy, receiver, assignee, assignee
                    in bankruptcy, executor, administrator, guardian, bailee, or
                    in any other trust capacity in the receiving, holding,
                    managing, and disposing of any and all estates and property,
                    real, personal or mixed, and to be appointed as such
                    trustee, trustee in bankruptcy, receiver, assignee, assignee
                    in bankruptcy, executor, administrator, guardian or bailee
                    by any persons, corporations, court, officer, or authority,
                    in the State of Delaware or elsewhere; and whenever this
                    Corporation is so appointed by any person, corporation,
                    court, officer or authority such trustee, trustee in
                    bankruptcy, receiver, assignee, assignee in bankruptcy,
                    executor, administrator, guardian, bailee, or in any other
                    trust capacity, it shall not be required to give bond with
                    surety, but its capital stock shall be taken and held as
                    security for the performance of the duties devolving upon it
                    by such appointment.

                    (10) And for its care, management and trouble, and the
                    exercise of any of its powers hereby given, or for the
                    performance of any of the duties which it may undertake or
                    be called upon to perform, or for the assumption of any
                    responsibility the said Corporation may be entitled to
                    receive a proper compensation.

                    (11) To purchase, receive, hold and own bonds, mortgages,
                    debentures, shares of capital stock, and other securities,
                    obligations, contracts and evidences of indebtedness, of any
                    private, public or municipal corporation within and without
                    the State of Delaware, or of the Government of the United
                    States, or of any state, territory, colony, or possession
                    thereof, or of any foreign government or country; to
                    receive, collect, receipt for, and dispose of interest,
                    dividends and income upon and from any of the bonds,
                    mortgages, debentures, notes, shares of capital

                                       2

                    stock, securities, obligations, contracts, evidences of
                    indebtedness and other property held and owned by it, and to
                    exercise in respect of all such bonds, mortgages,
                    debentures, notes, shares of capital stock, securities,
                    obligations, contracts, evidences of indebtedness and other
                    property, any and all the rights, powers and privileges of
                    individual owners thereof, including the right to vote
                    thereon; to invest and deal in and with any of the moneys of
                    the Corporation upon such securities and in such manner as
                    it may think fit and proper, and from time to time to vary
                    or realize such investments; to issue bonds and secure the
                    same by pledges or deeds of trust or mortgages of or upon
                    the whole or any part of the property held or owned by the
                    Corporation, and to sell and pledge such bonds, as and when
                    the Board of Directors shall determine, and in the promotion
                    of its said corporate business of investment and to the
                    extent authorized by law, to lease, purchase, hold, sell,
                    assign, transfer, pledge, mortgage and convey real and
                    personal property of any name and nature and any estate or
                    interest therein.

            (b) In furtherance of, and not in limitation, of the powers
            conferred by the laws of the State of Delaware, it is hereby
            expressly provided that the said Corporation shall also have the
            following powers:

                    (1) To do any or all of the things herein set forth, to the
                    same extent as natural persons might or could do, and in any
                    part of the world.

                    (2) To acquire the good will, rights, property and
                    franchises and to undertake the whole or any part of the
                    assets and liabilities of any person, firm, association or
                    corporation, and to pay for the same in cash, stock of this
                    Corporation, bonds or otherwise; to hold or in any manner to
                    dispose of the whole or any part of the property so
                    purchased; to conduct in any lawful manner the whole or any
                    part of any business so acquired, and to exercise all the
                    powers necessary or convenient in and about the conduct and
                    management of such business.

                    (3) To take, hold, own, deal in, mortgage or otherwise lien,
                    and to lease, sell, exchange, transfer, or in any manner
                    whatever dispose of property, real, personal or mixed,
                    wherever situated.

                    (4) To enter into, make, perform and carry out contracts of
                    every kind with any person, firm, association or
                    corporation, and, without limit as to amount, to draw, make,
                    accept, endorse, discount, execute and issue promissory
                    notes, drafts, bills of exchange, warrants, bonds,
                    debentures, and other negotiable or transferable
                    instruments.

                    (5) To have one or more offices, to carry on all or any of
                    its operations and businesses, without restriction to the
                    same extent as natural persons might or could do, to
                    purchase or otherwise acquire, to hold, own, to mortgage,
                    sell, convey or otherwise dispose of, real and personal
                    property, of every class and description, in any State,
                    District, Territory or Colony of the United States, and in
                    any foreign country or place.

                    (6) It is the intention that the objects, purposes and
                    powers specified and clauses contained in this paragraph
                    shall (except where otherwise expressed in said paragraph)
                    be nowise limited or restricted by reference to or inference
                    from the terms of any other clause of this or any other
                    paragraph in this charter, but that the objects, purposes
                    and powers specified in each of the clauses of this
                    paragraph shall be regarded as independent objects, purposes
                    and powers.

            FOURTH: - (a) The total number of shares of all classes of stock
            which the Corporation shall have authority to issue is forty-one
            million (41,000,000) shares, consisting of:

                    (1) One million (1,000,000) shares of Preferred stock, par
                    value $10.00 per share (hereinafter referred to as
                    "Preferred Stock"); and

                    (2) Forty million (40,000,000) shares of Common Stock, par
                    value $1.00 per share (hereinafter referred to as "Common
                    Stock").

                                       3

            (b) Shares of Preferred Stock may be issued from time to time in one
            or more series as may from time to time be determined by the Board
            of Directors each of said series to be distinctly designated. All
            shares of any one series of Preferred Stock shall be alike in every
            particular, except that there may be different dates from which
            dividends, if any, thereon shall be cumulative, if made cumulative.
            The voting powers and the preferences and relative, participating,
            optional and other special rights of each such series, and the
            qualifications, limitations or restrictions thereof, if any, may
            differ from those of any and all other series at any time
            outstanding; and, subject to the provisions of subparagraph 1 of
            Paragraph (c) of this Article FOURTH, the Board of Directors of the
            Corporation is hereby expressly granted authority to fix by
            resolution or resolutions adopted prior to the issuance of any
            shares of a particular series of Preferred Stock, the voting powers
            and the designations, preferences and relative, optional and other
            special rights, and the qualifications, limitations and restrictions
            of such series, including, but without limiting the generality of
            the foregoing, the following:

                    (1) The distinctive designation of, and the number of shares
                    of Preferred Stock which shall constitute such series, which
                    number may be increased (except where otherwise provided by
                    the Board of Directors) or decreased (but not below the
                    number of shares thereof then outstanding) from time to time
                    by like action of the Board of Directors;

                    (2) The rate and times at which, and the terms and
                    conditions on which, dividends, if any, on Preferred Stock
                    of such series shall be paid, the extent of the preference
                    or relation, if any, of such dividends to the dividends
                    payable on any other class or classes, or series of the same
                    or other class of stock and whether such dividends shall be
                    cumulative or non-cumulative;

                    (3) The right, if any, of the holders of Preferred Stock of
                    such series to convert the same into or exchange the same
                    for, shares of any other class or classes or of any series
                    of the same or any other class or classes of stock of the
                    Corporation and the terms and conditions of such conversion
                    or exchange;

                    (4) Whether or not Preferred Stock of such series shall be
                    subject to redemption, and the redemption price or prices
                    and the time or times at which, and the terms and conditions
                    on which, Preferred Stock of such series may be redeemed.

                    (5) The rights, if any, of the holders of Preferred Stock of
                    such series upon the voluntary or involuntary liquidation,
                    merger, consolidation, distribution or sale of assets,
                    dissolution or winding-up, of the Corporation.

                    (6) The terms of the sinking fund or redemption or purchase
                    account, if any, to be provided for the Preferred Stock of
                    such series; and

                    (7) The voting powers, if any, of the holders of such series
                    of Preferred Stock which may, without limiting the
                    generality of the foregoing include the right, voting as a
                    series or by itself or together with other series of
                    Preferred Stock or all series of Preferred Stock as a class,
                    to elect one or more directors of the Corporation if there
                    shall have been a default in the payment of dividends on any
                    one or more series of Preferred Stock or under such
                    circumstances and on such conditions as the Board of
                    Directors may determine.

            (c) (1) After the requirements with respect to preferential
            dividends on the Preferred Stock (fixed in accordance with the
            provisions of section (b) of this Article FOURTH), if any, shall
            have been met and after the Corporation shall have complied with all
            the requirements, if any, with respect to the setting aside of sums
            as sinking funds or redemption or purchase accounts (fixed in
            accordance with the provisions of section (b) of this Article
            FOURTH), and subject further to any conditions which may be fixed in
            accordance with the provisions of section (b) of this Article
            FOURTH, then and not otherwise the holders of Common Stock shall be
            entitled to receive such dividends as may be declared from time to

                                       4

            time by the Board of Directors.

                    (2) After distribution in full of the preferential amount,
                    if any, (fixed in accordance with the provisions of section
                    (b) of this Article FOURTH), to be distributed to the
                    holders of Preferred Stock in the event of voluntary or
                    involuntary liquidation, distribution or sale of assets,
                    dissolution or winding-up, of the Corporation, the holders
                    of the Common Stock shall be entitled to receive all of the
                    remaining assets of the Corporation, tangible and
                    intangible, of whatever kind available for distribution to
                    stockholders ratably in proportion to the number of shares
                    of Common Stock held by them respectively.

                    (3) Except as may otherwise be required by law or by the
                    provisions of such resolution or resolutions as may be
                    adopted by the Board of Directors pursuant to section (b) of
                    this Article FOURTH, each holder of Common Stock shall have
                    one vote in respect of each share of Common Stock held on
                    all matters voted upon by the stockholders.

            (d) No holder of any of the shares of any class or series of stock
            or of options, warrants or other rights to purchase shares of any
            class or series of stock or of other securities of the Corporation
            shall have any preemptive right to purchase or subscribe for any
            unissued stock of any class or series or any additional shares of
            any class or series to be issued by reason of any increase of the
            authorized capital stock of the Corporation of any class or series,
            or bonds, certificates of indebtedness, debentures or other
            securities convertible into or exchangeable for stock of the
            Corporation of any class or series, or carrying any right to
            purchase stock of any class or series, but any such unissued stock,
            additional authorized issue of shares of any class or series of
            stock or securities convertible into or exchangeable for stock, or
            carrying any right to purchase stock, may be issued and disposed of
            pursuant to resolution of the Board of Directors to such persons,
            firms, corporations or associations, whether such holders or others,
            and upon such terms as may be deemed advisable by the Board of
            Directors in the exercise of its sole discretion.

            (e) The relative powers, preferences and rights of each series of
            Preferred Stock in relation to the relative powers, preferences and
            rights of each other series of Preferred Stock shall, in each case,
            be as fixed from time to time by the Board of Directors in the
            resolution or resolutions adopted pursuant to authority granted in
            section (b) of this Article FOURTH and the consent, by class or
            series vote or otherwise, of the holders of such of the series of
            Preferred Stock as are from time to time outstanding shall not be
            required for the issuance by the Board of Directors of any other
            series of Preferred Stock whether or not the powers, preferences and
            rights of such other series shall be fixed by the Board of Directors
            as senior to, or on a parity with, the powers, preferences and
            rights of such outstanding series, or any of them; provided,
            however, that the Board of Directors may provide in the resolution
            or resolutions as to any series of Preferred Stock adopted pursuant
            to section (b) of this Article FOURTH that the consent of the
            holders of a majority (or such greater proportion as shall be
            therein fixed) of the outstanding shares of such series voting
            thereon shall be required for the issuance of any or all other
            series of Preferred Stock.

            (f) Subject to the provisions of section (e), shares of any series
            of Preferred Stock may be issued from time to time as the Board of
            Directors of the Corporation shall determine and on such terms and
            for such consideration as shall be fixed by the Board of Directors.

            (g) Shares of Common Stock may be issued from time to time as the
            Board of Directors of the Corporation shall determine and on such
            terms and for such consideration as shall be fixed by the Board of
            Directors.

            (h) The authorized amount of shares of Common Stock and of Preferred
            Stock may, without a class or series vote, be increased or decreased
            from time to time by the affirmative vote of the holders of a
            majority of the stock of the Corporation entitled to vote thereon.

                                       5

            FIFTH: - (a) The business and affairs of the Corporation shall be
            conducted and managed by a Board of Directors. The number of
            directors constituting the entire Board shall be not less than five
            nor more than twenty-five as fixed from time to time by vote of a
            majority of the whole Board, provided, however, that the number of
            directors shall not be reduced so as to shorten the term of any
            director at the time in office, and provided further, that the
            number of directors constituting the whole Board shall be
            twenty-four until otherwise fixed by a majority of the whole Board.

            (b) The Board of Directors shall be divided into three classes, as
            nearly equal in number as the then total number of directors
            constituting the whole Board permits, with the term of office of one
            class expiring each year. At the annual meeting of stockholders in
            1982, directors of the first class shall be elected to hold office
            for a term expiring at the next succeeding annual meeting, directors
            of the second class shall be elected to hold office for a term
            expiring at the second succeeding annual meeting and directors of
            the third class shall be elected to hold office for a term expiring
            at the third succeeding annual meeting. Any vacancies in the Board
            of Directors for any reason, and any newly created directorships
            resulting from any increase in the directors, may be filled by the
            Board of Directors, acting by a majority of the directors then in
            office, although less than a quorum, and any directors so chosen
            shall hold office until the next annual election of directors. At
            such election, the stockholders shall elect a successor to such
            director to hold office until the next election of the class for
            which such director shall have been chosen and until his successor
            shall be elected and qualified. No decrease in the number of
            directors shall shorten the term of any incumbent director.

            (c) Notwithstanding any other provisions of this Charter or Act of
            Incorporation or the By-Laws of the Corporation (and notwithstanding
            the fact that some lesser percentage may be specified by law, this
            Charter or Act of Incorporation or the By-Laws of the Corporation),
            any director or the entire Board of Directors of the Corporation may
            be removed at any time without cause, but only by the affirmative
            vote of the holders of two-thirds or more of the outstanding shares
            of capital stock of the Corporation entitled to vote generally in
            the election of directors (considered for this purpose as one class)
            cast at a meeting of the stockholders called for that purpose.

            (d) Nominations for the election of directors may be made by the
            Board of Directors or by any stockholder entitled to vote for the
            election of directors. Such nominations shall be made by notice in
            writing, delivered or mailed by first class United States mail,
            postage prepaid, to the Secretary of the Corporation not less than
            14 days nor more than 50 days prior to any meeting of the
            stockholders called for the election of directors; provided,
            however, that if less than 21 days' notice of the meeting is given
            to stockholders, such written notice shall be delivered or mailed,
            as prescribed, to the Secretary of the Corporation not later than
            the close of the seventh day following the day on which notice of
            the meeting was mailed to stockholders. Notice of nominations which
            are proposed by the Board of Directors shall be given by the
            Chairman on behalf of the Board.

            (e) Each notice under subsection (d) shall set forth (i) the name,
            age, business address and, if known, residence address of each
            nominee proposed in such notice, (ii) the principal occupation or
            employment of such nominee and (iii) the number of shares of stock
            of the Corporation which are beneficially owned by each such
            nominee.

            (f) The Chairman of the meeting may, if the facts warrant, determine
            and declare to the meeting that a nomination was not made in
            accordance with the foregoing procedure, and if he should so
            determine, he shall so declare to the meeting and the defective
            nomination shall be disregarded.

            (g) No action required to be taken or which may be taken at any
            annual or special meeting of stockholders of the Corporation may be
            taken without a meeting, and the power of stockholders to consent in
            writing, without a meeting, to the taking of any action is
            specifically denied.

            SIXTH: - The Directors shall choose such officers, agents and
            servants as may be provided in the By-

                                       6

            Laws as they may from time to time find necessary or proper.

            SEVENTH: - The Corporation hereby created is hereby given the same
            powers, rights and privileges as may be conferred upon corporations
            organized under the Act entitled "An Act Providing a General
            Corporation Law", approved March 10, 1899, as from time to time
            amended.

            EIGHTH: - This Act shall be deemed and taken to be a private Act.

            NINTH: - This Corporation is to have perpetual existence.

            TENTH: - The Board of Directors, by resolution passed by a majority
            of the whole Board, may designate any of their number to constitute
            an Executive Committee, which Committee, to the extent provided in
            said resolution, or in the By-Laws of the Company, shall have and
            may exercise all of the powers of the Board of Directors in the
            management of the business and affairs of the Corporation, and shall
            have power to authorize the seal of the Corporation to be affixed to
            all papers which may require it.

            ELEVENTH: - The private property of the stockholders shall not be
            liable for the payment of corporate debts to any extent whatever.

            TWELFTH: - The Corporation may transact business in any part of the
            world.

            THIRTEENTH: - The Board of Directors of the Corporation is expressly
            authorized to make, alter or repeal the By-Laws of the Corporation
            by a vote of the majority of the entire Board. The stockholders may
            make, alter or repeal any By-Law whether or not adopted by them,
            provided however, that any such additional By-Laws, alterations or
            repeal may be adopted only by the affirmative vote of the holders of
            two-thirds or more of the outstanding shares of capital stock of the
            Corporation entitled to vote generally in the election of directors
            (considered for this purpose as one class).

            FOURTEENTH: - Meetings of the Directors may be held outside of the
            State of Delaware at such places as may be from time to time
            designated by the Board, and the Directors may keep the books of the
            Company outside of the State of Delaware at such places as may be
            from time to time designated by them.

            FIFTEENTH: - (a) (1)  In addition to any affirmative vote required
            by law, and except as otherwise expressly provided in sections (b)
            and (c) of this Article FIFTEENTH:

                    (A) any merger or consolidation of the Corporation or any
                    Subsidiary (as hereinafter defined) with or into (i) any
                    Interested Stockholder (as hereinafter defined) or (ii) any
                    other corporation (whether or not itself an Interested
                    Stockholder), which, after such merger or consolidation,
                    would be an Affiliate (as hereinafter defined) of an
                    Interested Stockholder, or

                    (B) any sale, lease, exchange, mortgage, pledge, transfer or
                    other disposition (in one transaction or a series of related
                    transactions) to or with any Interested Stockholder or any
                    Affiliate of any Interested Stockholder of any assets of the
                    Corporation or any Subsidiary having an aggregate fair
                    market value of $1,000,000 or more, or

                    (C) the issuance or transfer by the Corporation or any
                    Subsidiary (in one transaction or a series of related
                    transactions) of any securities of the Corporation or any
                    Subsidiary to any Interested Stockholder or any Affiliate of
                    any Interested Stockholder in exchange for cash, securities
                    or other property (or a combination thereof) having an
                    aggregate fair market value of $1,000,000 or more, or

                    (D) the adoption of any plan or proposal for the liquidation
                    or dissolution of the Corporation, or

                                       7

                    (E) any reclassification of securities (including any
                    reverse stock split), or recapitalization of the
                    Corporation, or any merger or consolidation of the
                    Corporation with any of its Subsidiaries or any similar
                    transaction (whether or not with or into or otherwise
                    involving an Interested Stockholder) which has the effect,
                    directly or indirectly, of increasing the proportionate
                    share of the outstanding shares of any class of equity or
                    convertible securities of the Corporation or any Subsidiary
                    which is directly or indirectly owned by any Interested
                    Stockholder, or any Affiliate of any Interested Stockholder,

shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.

                      (2) The term "business combination" as used in this
                      Article FIFTEENTH shall mean any transaction which is
                      referred to in any one or more of clauses (A) through (E)
                      of paragraph 1 of the section (a).

                    (b) The provisions of section (a) of this Article FIFTEENTH
                    shall not be applicable to any particular business
                    combination and such business combination shall require only
                    such affirmative vote as is required by law and any other
                    provisions of the Charter or Act of Incorporation or By-Laws
                    if such business combination has been approved by a majority
                    of the whole Board.

                    (c)  For the purposes of this Article FIFTEENTH:

            (1) A "person" shall mean any individual, firm, corporation or other
            entity.

            (2) "Interested Stockholder" shall mean, in respect of any business
            combination, any person (other than the Corporation or any
            Subsidiary) who or which as of the record date for the determination
            of stockholders entitled to notice of and to vote on such business
            combination, or immediately prior to the consummation of any such
            transaction:

                    (A) is the beneficial owner, directly or indirectly, of more
                    than 10% of the Voting Shares, or

                    (B) is an Affiliate of the Corporation and at any time
                    within two years prior thereto was the beneficial owner,
                    directly or indirectly, of not less than 10% of the then
                    outstanding voting Shares, or

                    (C) is an assignee of or has otherwise succeeded in any
                    share of capital stock of the Corporation which were at any
                    time within two years prior thereto beneficially owned by
                    any Interested Stockholder, and such assignment or
                    succession shall have occurred in the course of a
                    transaction or series of transactions not involving a public
                    offering within the meaning of the Securities Act of 1933.

            (3)  A person shall be the "beneficial owner" of any Voting Shares:

                    (A) which such person or any of its Affiliates and
                    Associates (as hereafter defined) beneficially own, directly
                    or indirectly, or

                    (B) which such person or any of its Affiliates or Associates
                    has (i) the right to acquire (whether such right is
                    exercisable immediately or only after the passage of time),
                    pursuant to any

                                       8

                    agreement, arrangement or understanding or upon the exercise
                    of conversion rights, exchange rights, warrants or options,
                    or otherwise, or (ii) the right to vote pursuant to any
                    agreement, arrangement or understanding, or

                    (C) which are beneficially owned, directly or indirectly, by
                    any other person with which such first mentioned person or
                    any of its Affiliates or Associates has any agreement,
                    arrangement or understanding for the purpose of acquiring,
                    holding, voting or disposing of any shares of capital stock
                    of the Corporation.

            (4) The outstanding Voting Shares shall include shares deemed owned
            through application of paragraph (3) above but shall not include any
            other Voting Shares which may be issuable pursuant to any agreement,
            or upon exercise of conversion rights, warrants or options or
            otherwise.

            (5) "Affiliate" and "Associate" shall have the respective meanings
            given those terms in Rule 12b-2 of the General Rules and Regulations
            under the Securities Exchange Act of 1934, as in effect on December
            31, 1981.

            (6) "Subsidiary" shall mean any corporation of which a majority of
            any class of equity security (as defined in Rule 3a11-1 of the
            General Rules and Regulations under the Securities Exchange Act of
            1934, as in effect on December 31, 1981) is owned, directly or
            indirectly, by the Corporation; provided, however, that for the
            purposes of the definition of Investment Stockholder set forth in
            paragraph (2) of this section (c), the term "Subsidiary" shall mean
            only a corporation of which a majority of each class of equity
            security is owned, directly or indirectly, by the Corporation.

                    (d) majority of the directors shall have the power and duty
                    to determine for the purposes of this Article FIFTEENTH on
                    the basis of information known to them, (1) the number of
                    Voting Shares beneficially owned by any person (2) whether a
                    person is an Affiliate or Associate of another, (3) whether
                    a person has an agreement, arrangement or understanding with
                    another as to the matters referred to in paragraph (3) of
                    section (c), or (4) whether the assets subject to any
                    business combination or the consideration received for the
                    issuance or transfer of securities by the Corporation, or
                    any Subsidiary has an aggregate fair market value of
                    $1,000,000 or more.

                    (e) Nothing contained in this Article FIFTEENTH shall be
                    construed to relieve any Interested Stockholder from any
                    fiduciary obligation imposed by law.

            SIXTEENTH: Notwithstanding any other provision of this Charter or
            Act of Incorporation or the By-Laws of the Corporation (and in
            addition to any other vote that may be required by law, this Charter
            or Act of Incorporation by the By-Laws), the affirmative vote of the
            holders of at least two-thirds of the outstanding shares of the
            capital stock of the Corporation entitled to vote generally in the
            election of directors (considered for this purpose as one class)
            shall be required to amend, alter or repeal any provision of
            Articles FIFTH, THIRTEENTH, FIFTEENTH or SIXTEENTH of this Charter
            or Act of Incorporation.

            SEVENTEENTH: (a) a Director of this Corporation shall not be liable
            to the Corporation or its stockholders for monetary damages for
            breach of fiduciary duty as a Director, except to the extent such
            exemption from liability or limitation thereof is not permitted
            under the Delaware General Corporation Laws as the same exists or
            may hereafter be amended.

                    (b) Any repeal or modification of the foregoing paragraph
                    shall not adversely affect any right or protection of a
                    Director of the Corporation existing hereunder with respect
                    to any act or omission occurring prior to the time of such
                    repeal or modification."

                                       9

                                    EXHIBIT B

                                     BY-LAWS

                            WILMINGTON TRUST COMPANY

                              WILMINGTON, DELAWARE

                         AS EXISTING ON JANUARY 16, 2003

                       BY-LAWS OF WILMINGTON TRUST COMPANY

                                    ARTICLE I
                             STOCKHOLDERS' MEETINGS

         Section 1. Annual Meeting. The annual meeting of stockholders shall be
held on the third Thursday in April each year at the principal office at the
Company or at such other date, time or place as may be designated by resolution
by the Board of Directors.

         Section 2. Special Meetings. Special meetings of stockholders may be
called at any time by the Board of Directors, the Chairman of the Board, the
Chief Executive Officer or the President.

         Section 3. Notice. Notice of all meetings of the stockholders shall be
given by mailing to each stockholder at least ten (10) days before said meeting,
at his last known address, a written or printed notice fixing the time and place
of such meeting.

         Section 4. Quorum. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a smaller number of shares may adjourn from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.

                                    ARTICLE 2
                                    DIRECTORS

         Section 1. Management. The affairs and business of the Company shall be
managed by or under the direction of the Board of Directors.

         Section 2. Number. The authorized number of directors that shall
constitute the Board of Directors shall be fixed from time to time by or
pursuant to a resolution passed by a majority of the Board of Directors within
the parameters set by the Charter of the Company. No more than two directors may
also be employees of the Company or any affiliate thereof.

         Section 3. Qualification. In addition to any other provisions of these
Bylaws, to be qualified for nomination for election or appointment to the Board
of Directors, a person must have not attained the age of sixty-nine years at the
time of such election or appointment, provided however, the Nominating and
Corporate Governance Committee may waive such qualification as to a particular
candidate otherwise qualified to serve as a director upon a good faith
determination by such committee that such a waiver is in the best interests of
the Company

and its stockholders. The Chairman of the Board and the Chief Executive Officer
shall not be qualified to continue to serve as directors upon the termination of
their service in those offices for any reason.

         Section 4. Meetings. The Board of Directors shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of the
Board of Directors, the Chief Executive Officer or the President.

         Section 5. Special Meetings. Special meetings of the Board of Directors
may be called at any time by the Chairman of the Board, the Chief Executive
Officer or the President, and shall be called upon the written request of a
majority of the directors.

         Section 6. Quorum. A majority of the directors elected and qualified
shall be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.

         Section 7. Notice. Written notice shall be sent by mail to each
director of any special meeting of the Board of Directors, and of any change in
the time or place of any regular meeting, stating the time and place of such
meeting, which shall be mailed not less than two days before the time of holding
such meeting.

         Section 8. Vacancies. In the event of the death, resignation, removal,
inability to act or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.

         Section 9. Organization Meeting. The Board of Directors at its first
meeting after its election by the stockholders shall appoint an Executive
Committee, an Audit Committee, a Compensation Committee and a Nominating and
Corporate Governance Committee, and shall elect from its own members a Chairman
of the Board, a Chief Executive Officer and a President, who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Chief Financial Officer, who may be the same person, and may appoint at any
time such committees as it may deem advisable. The Board of Directors may also
elect at such meeting one or more Associate Directors. The Board of Directors,
the Executive Committee or another committee designated by the Board of
Directors may elect or appoint such other officers as they may deem advisable.

         Section 10. Removal. The Board of Directors may at any time remove,
with or without cause, any member of any committee appointed by it or any
associate director or officer elected by it and may appoint or elect his
successor.

         Section 11. Responsibility of Officers. The Board of Directors may
designate an officer to be in charge of such departments or divisions of the
Company as it may deem advisable.

         Section 12. Participation in Meetings. The Board of Directors or any
committee of the Board of Directors may participate in a meeting of the Board of
Directors or such committee, as the case may be, by conference telephone, video
facilities or other communications equipment. Any action required or permitted
to be taken at any meeting of the Board of Directors or any committee thereof
may be taken without a meeting if all of the members of the Board of Directors
or the committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of the Board of Directors or such
committee.

                                    ARTICLE 3
                      COMMITTEES OF THE BOARD OF DIRECTORS

         Section 1. Executive Committee.

                  (A) The Executive Committee shall be composed of not more than
nine (9) members, who shall be selected by the Board of Directors from its own
members, and who shall hold office at the pleasure of the Board of Directors.

                  (B) The Executive Committee shall have and may exercise, to
the fullest extent permitted by law, all of the powers of the Board of Directors
when it is not in session to transact all business for and on behalf of the
Company that may be brought before it.

                  (C) The Executive Committee shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Executive
Committee, the Chairman of the Board, the Chief Executive Officer or the
President. The majority of its members shall be necessary to constitute a quorum
for the transaction of business. Special meetings of the Executive Committee may
be held at any time when a quorum is present.

                  (D) Minutes of each meeting of the Executive Committee shall
be kept and submitted to the Board of Directors at its next meeting.

                  (E) In the event of an emergency of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these Bylaws, any two available
members of the Executive Committee as constituted immediately prior to such
emergency shall constitute a quorum of that Committee for the full conduct and
management of the affairs and

business of the Company in accordance with the provisions of Article 3 of these
Bylaws. In the event of the unavailability, at such time, of a minimum of two
members of the Executive Committee, any three available directors shall
constitute the Executive Committee for the full conduct and management of the
affairs and business of the Company in accordance with the foregoing provisions
of this Section. This Bylaw shall be subject to implementation by resolutions of
the Board of Directors presently existing or hereafter passed from time to time
for that purpose, and any provisions of these Bylaws (other than this Section)
and any resolutions which are contrary to the provisions of this Section or to
the provisions of any such implementing resolutions shall be suspended during
such a disaster period until it shall be determined by any interim Executive
Committee acting under this Section that it shall be to the advantage of the
Company to resume the conduct and management of its affairs and business under
all of the other provisions of these Bylaws.

         Section 2.  Audit Committee.

                  (A) The Audit Committee shall be composed of not more than
five (5) members, who shall be selected by the Board of Directors from its own
members, none of whom shall be an officer or employee of the Company, and shall
hold office at the pleasure of the Board.

                  (B) The Audit Committee shall have general supervision over
the Audit Services Division in all matters however subject to the approval of
the Board of Directors; it shall consider all matters brought to its attention
by the officer in charge of the Audit Services Division, review all reports of
examination of the Company made by any governmental agency or such independent
auditor employed for that purpose, and make such recommendations to the Board of
Directors with respect thereto or with respect to any other matters pertaining
to auditing the Company as it shall deem desirable.

                  (C) The Audit Committee shall meet whenever and wherever its
Chairperson, the Chairman of the Board, the Chief Executive Officer, the
President or a majority of the Committee's members shall deem it to be proper
for the transaction of its business. A majority of the Committee's members shall
constitute a quorum for the transaction of business. The acts of the majority at
a meeting at which a quorum is present shall constitute action by the Committee.

         Section 3. Compensation Committee.

                  (A) The Compensation Committee shall be composed of not more
than five (5) members, who shall be selected by the Board of Directors from its
own members, none of whom shall be an officer or employee of the Company, and
shall hold office at the pleasure of the Board of Directors.

                  (B) The Compensation Committee shall in general advise upon
all matters of policy concerning compensation, including salaries and employee
benefits.

                  (C) The Compensation Committee shall meet whenever and
wherever its Chairperson, the Chairman of the Board, the Chief Executive
Officer, the President or a majority of the Committee's members shall deem it to
be proper for the transaction of its business. A majority of the Committee's
members shall constitute a quorum for the transaction of business. The acts of
the majority at a meeting at which a quorum is present shall

constitute action by the Committee.

         SECTION 4. Nominating and Corporate Governance Committee.

                  (A) The Nominating and Corporate Governance Committee shall be
composed of not more than five members, who shall be selected by the Board of
Directors from its own members, none of whom shall be an officer or employee of
the Company, and shall hold office at the pleasure of the Board of Directors.

                  (B) The Nominating and Corporate Governance Committee shall
provide counsel and make recommendations to the Chairman of the Board and the
full Board with respect to the performance of the Chairman of the Board and the
Chief Executive Officer, candidates for membership on the Board of Directors and
its committees, matters of corporate governance, succession planning for the
Company's executive management and significant shareholder relations issues.

                  (C) The Nominating and Corporate Governance Committee shall
meet whenever and wherever its Chairperson, the Chairman of the Board, the Chief
Executive Officer, the President, or a majority of the Committee's members shall
deem it to be proper for the transaction of its business. A majority of the
Committee's members shall constitute a quorum for the transaction of business.
The acts of the majority at a meeting at which a quorum is present shall
constitute action by the Committee.

         Section 5. Other Committees. The Company may have such other committees
with such powers as the Board may designate from time to time by resolution or
by an amendment to these Bylaws.

         Section 6. Associate Directors.

                  (A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve at the pleasure of the
Board of Directors.

                  (B) Associate directors shall be entitled to attend all
meetings of directors and participate in the discussion of all matters brought
to the Board of Directors, but will not have a right to vote.

         Section 7. Absence or Disqualification of Any Member of a Committee. In
the absence or disqualification of any member of any committee created under
Article III of these Bylaws, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member.

                                    ARTICLE 4
                                    OFFICERS

         Section 1. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the Board of Directors and shall have such further
authority and powers and shall perform such duties the Board of Directors may
assign to him from time to time.

         Section 2. Chief Executive Officer. The Chief Executive Officer shall
have the powers and duties pertaining to the office of Chief Executive Officer
conferred or imposed upon him by statute, incident to his office or as the Board
of Directors may assign to him from time to time. In the absence of the Chairman
of the Board, the Chief Executive Officer shall have the powers and duties of
the Chairman of the Board.

         Section 3. President. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed upon him by
statute, incident to his office or as the Board of Directors may assign to him
from time to time. In the absence of the Chairman of the Board and the Chief
Executive Officer, the President shall have the powers and duties of the
Chairman of the Board.

         Section 4. Duties. The Chairman of the Board, the Chief Executive
Officer or the President, as designated by the Board of Directors, shall carry
into effect all legal directions of the Executive Committee and of the Board of
Directors and shall at all times exercise general supervision over the interest,
affairs and operations of the Company and perform all duties incident to his
office.

         Section 5. Vice Presidents. There may be one or more Vice Presidents,
however denominated by the Board of Directors, who may at any time perform all
of the duties of the Chairman of the Board, the Chief Executive Officer and/or
the President and such other powers and duties incident to their respective
offices or as the Board of Directors, the Executive Committee, the Chairman of
the Board, the Chief Executive Officer or the President or the officer in charge
of the department or division to which they are assigned may assign to them from
time to time.

         Section 6. Secretary. The Secretary shall attend to the giving of
notice of meetings of the stockholders and the Board of Directors, as well as
the committees thereof, to the keeping of accurate minutes of all such meetings,
recording the same in the minute books of the Company and in general notifying
the Board of Directors of material matters affecting the Company on a timely
basis. In addition to the other notice requirements of these Bylaws and as may
be practicable under the circumstances, all such notices shall be in writing and
mailed well in advance of the scheduled date of any such meeting. He shall have
custody of the corporate seal, affix the same to any documents requiring such
corporate seal, attest the same and perform other duties incident to his office.

         Section 7. Chief Financial Officer. The Chief Financial Officer shall
have general supervision over all assets and liabilities of the Company. He
shall be custodian of and responsible for all monies, funds and valuables of the
Company and for the keeping of proper

records of the evidence of property or indebtedness and of all transactions of
the Company. He shall have general supervision of the expenditures of the
Company and periodically shall report to the Board of Directors the condition of
the Company, and perform such other duties incident to his office or as the
Board of Directors, the Executive Committee, the Chairman of the Board, the
Chief Executive Officer or the President may assign to him from time to time.

         Section 8. Controller. There may be a Controller who shall exercise
general supervision over the internal operations of the Company, including
accounting, and shall render to the Board of Directors or the Audit Committee at
appropriate times a report relating to the general condition and internal
operations of the Company and perform other duties incident to his office.

         There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.

         Section 9. Audit Officers. The officer designated by the Board of
Directors to be in charge of the Audit Services Division of the Company, with
such title as the Board of Directors shall prescribe, shall report to and be
directly responsible to the Audit Committee and the Board of Directors.

         There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Services
Division.

         Section 10. Other Officers. There may be one or more officers,
subordinate in rank to all Vice Presidents with such functional titles as shall
be determined from time to time by the Board of Directors, who shall ex officio
hold the office of Assistant Secretary of the Company and who may perform such
duties as may be prescribed by the officer in charge of the department or
division to which they are assigned.

         Section 11. Powers and Duties of Other Officers. The powers and duties
of all other officers of the Company shall be those usually pertaining to their
respective offices, subject to the direction of the Board of Directors, the
Executive Committee, the Chairman of the Board, the Chief Executive Officer or
the President and the officer in charge of the department or division to which
they are assigned.

         Section 12. Number of Offices. Any one or more offices of the Company
may be held by the same person, except that (A) no individual may hold more than
one of the offices of Chief Financial Officer, Controller or Audit Officer and
(B) none of the Chairman of the Board, the Chief Executive Officer or the
President may hold any office mentioned in Section 12(A).

                                    ARTICLE 5

                          STOCK AND STOCK CERTIFICATES

         Section 1. Transfer. Shares of stock shall be transferable on the books
of the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.

         Section 2. Certificates. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the Company by the Chairman of
the Board, the Chief Executive Officer or the President or a Vice President, and
by the Secretary or an Assistant Secretary, of the Company, certifying the
number of shares owned by him in the Company. The corporate seal affixed
thereto, and any of or all the signatures on the certificate, may be a
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Company with the same effect as if he were such
officer, transfer agent or registrar at the date of issue. Duplicate
certificates of stock shall be issued only upon giving such security as may be
satisfactory to the Board of Directors or the Executive Committee.

         Section 3. Record Date. The Board of Directors is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment of
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days preceding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.

                                    ARTICLE 6
                                      SEAL

         The corporate seal of the Company shall be in the following form:

                  Between two concentric circles the words "Wilmington Trust
                  Company" within the inner circle the words "Wilmington,
                  Delaware."

                                    ARTICLE 7
                                   FISCAL YEAR

         The fiscal year of the Company shall be the calendar year.

                                    ARTICLE 8
                     EXECUTION OF INSTRUMENTS OF THE COMPANY

         The Chairman of the Board, the Chief Executive Officer, the President
or any Vice President, however denominated by the Board of Directors, shall have
full power and authority to enter into, make, sign, execute, acknowledge and/or
deliver and the Secretary or any Assistant Secretary shall have full power and
authority to attest and affix the corporate seal of the Company to any and all
deeds, conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.

                                    ARTICLE 9
               COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES

         Directors and associate directors of the Company, other than salaried
officers of the Company, shall be paid such reasonable honoraria or fees for
attending meetings of the Board of Directors as the Board of Directors may from
time to time determine. Directors and associate directors who serve as members
of committees, other than salaried employees of the Company, shall be paid such
reasonable honoraria or fees for services as members of committees as the Board
of Directors shall from time to time determine and directors and associate
directors may be authorized by the Company to perform such special services as
the Board of Directors may from time to time determine in accordance with any
guidelines the Board of Directors may adopt for such services, and shall be paid
for such special services so performed reasonable compensation as may be
determined by the Board of Directors.

                                   ARTICLE 10
                                 INDEMNIFICATION

         Section 1. Persons Covered. The Company shall indemnify and hold
harmless, to the fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any person who was or is made or is
threatened to be made a party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"proceeding") by reason of the fact that he, or a person for whom he is the
legal representative, is or was a director of the Company or is or was serving
at the request of the Company as a director, officer, employee, fiduciary or
agent of another corporation, partnership, limited

liability company, joint venture, trust, enterprise or non-profit entity that is
not a subsidiary or affiliate of the Company, including service with respect to
employee benefit plans, against all liability and loss suffered and expenses
reasonably incurred by such person. The Company shall be required to indemnify
such a person in connection with a proceeding initiated by such person only if
the proceeding was authorized by the Board of Directors.

         The Company may indemnify and hold harmless, to the fullest extent
permitted by applicable law as it presently exists or may hereafter be amended,
any person who was or is made or threatened to be made a party or is otherwise
involved in any proceeding by reason of the fact that he, or a person for whom
he is the legal representative, is or was an officer, employee or agent of the
Company or a director, officer, employee or agent of a subsidiary or affiliate
of the Company, against all liability and loss suffered and expenses reasonably
incurred by such person. The Company may indemnify any such person in connection
with a proceeding (or part thereof) initiated by such person only if such
proceeding (or part thereof) was authorized by the Board of Directors.

         Section 2. Advance of Expenses. The Company shall pay the expenses
incurred in defending any proceeding involving a person who is or may be
indemnified pursuant to Section 1 in advance of its final disposition, provided,
however, that the payment of expenses incurred by such a person in advance of
the final disposition of the proceeding shall be made only upon receipt of an
undertaking by that person to repay all amounts advanced if it should be
ultimately determined that the person is not entitled to be indemnified under
this Article 10 or otherwise.

         Section 3. Certain Rights. If a claim under this Article 10 for (A)
payment of expenses or (B) indemnification by a director or person who is or was
serving at the request of the Company as a director, officer, employee,
fiduciary or agent of another corporation, partnership, limited liability
company, joint venture, trust, enterprise or nonprofit entity that is not a
subsidiary or affiliate of the Company, including service with respect to
employee benefit plans, is not paid in full within sixty days after a written
claim therefor has been received by the Company, the claimant may file suit to
recover the unpaid amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim. In any such
action, the Company shall have the burden of proving that the claimant was not
entitled to the requested indemnification or payment of expenses under
applicable law.

         Section 4. Non-Exclusive. The rights conferred on any person by this
Article 10 shall not be exclusive of any other rights which such person may have
or hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these Bylaws, agreement, vote of stockholders or disinterested
directors or otherwise.

         Section 5. Reduction of Amount. The Company's obligation, if any, to
indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, enterprise or nonprofit entity shall be reduced by

any amount such person may collect as indemnification from such other
corporation, partnership, joint venture, trust, enterprise or nonprofit entity.

         Section 6. Effect of Modification. Any amendment, repeal or
modification of the foregoing provisions of this Article 10 shall not adversely
affect any right or protection hereunder of any person in respect of any act or
omission occurring prior to the time of such amendment, repeal or modification.

                                   ARTICLE 11
                            AMENDMENTS TO THE BYLAWS

         These Bylaws may be altered, amended or repealed, in whole or in part,
and any new Bylaw or Bylaws adopted at any regular or special meeting of the
Board of Directors by a vote of a majority of all the members of the Board of
Directors then in office.

                                   ARTICLE 12
                                  MISCELLANEOUS

         Whenever used in these Bylaws, the singular shall include the plural,
the plural shall include the singular unless the context requires otherwise and
the use of either gender shall include both genders.

                                    EXHIBIT C

                             SECTION 321(b) CONSENT

            Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.

                                         WILMINGTON TRUST COMPANY

Dated: February 13, 2004                 By:/s/ Donald G. MacKelcan
                                            ------------------------------------
                                         Name: Donald G. MacKelcan
                                         Title:  Vice President

                                    EXHIBIT D

                                     NOTICE

                  This form is intended to assist state nonmember banks and
                  savings banks with state publication requirements. It has not
                  been approved by any state banking authorities. Refer to your
                  appropriate state banking authorities for your state
                  publication requirements.

R E P O R T   O F   C O N D I T I O N

Consolidating domestic subsidiaries of the

           WILMINGTON TRUST COMPANY                        of     WILMINGTON
- ----------------------------------------------------------    ------------------
                 Name of Bank                                        City

in the State of   DELAWARE  , at the close of business on June 30, 2003.

                                                                                                     Thousands of dollars
                                                                                                     --------------------
                                                                                                  
ASSETS

Cash and balances due from depository institutions:

         Noninterest-bearing balances and currency and coins................................................221,573
         Interest-bearing balances ...............................................................................0
Held-to-maturity securities ..................................................................................3,777
Available-for-sale securities.............................................................................1,684,467
Federal funds sold in domestic offices......................................................................465,275
Securities purchased under agreements to resell..............................................................18,800
Loans and lease financing receivables:
         Loans and leases held for sale ............................0
         Loans and leases, net of unearned income...........5,598,733
         LESS:  Allowance for loan and lease losses ...........77,873
         Loans and leases, net of unearned income, allowance, and reserve.................................5,520,860
Assets held in trading accounts...................................................................................0
Premises and fixed assets (including capitalized leases)....................................................142,672
Other real estate owned ......................................................................................2,986
Investments in unconsolidated subsidiaries and associated companies...........................................2,496
Customers' liability to this bank on acceptances outstanding......................................................0
Intangible assets:
         a.  Goodwill ..........................................................................................157
         b.  Other intangible assets ........................................................................11,897
Other assets ...............................................................................................171,667
Total assets..............................................................................................8,246,627

                                                          CONTINUED ON NEXT PAGE

                                                                                                     Thousands of dollars
                                                                                                     --------------------
                                                                                                  
LIABILITIES

Deposits:
In domestic offices.......................................................................................6,415,199
         Noninterest-bearing.......................1,011,850
         Interest-bearing..........................5,403,349
Federal funds purchased in domestic offices...............................................................  286,799
Securities sold under agreements to repurchase............................................................. 207,308
Trading liabilities (from Schedule RC-D)..........................................................................0
Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases:..............597,518
Bank's liability on acceptances executed and outstanding..........................................................0
Subordinated notes and debentures.................................................................................0
Other liabilities (from Schedule RC-G).......................................................................98,337
Total liabilities.........................................................................................7,605,161

EQUITY CAPITAL

Perpetual preferred stock and related surplus.....................................................................0
Common Stock....................................................................................................500
Surplus (exclude all surplus related to preferred stock)....................................................112,358
a.  Retained earnings.......................................................................................526,582
b.  Accumulated other comprehensive income....................................................................2,026
Total equity capital........................................................................................641,466
Total liabilities, limited-life preferred stock, and equity capital.......................................8,246,627

                                       23