SEC Filing | White Mountains Insurance Group

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As filed with the Securities and Exchange Commission on June 27, 2003

Registration No. 333-88352

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 4
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

WHITE MOUNTAINS INSURANCE GROUP, LTD. (Exact Name of Registrant as Specified in its Charter)	FUND AMERICAN COMPANIES, INC. (Exact Name of Registrant as Specified in its Charter)
Bermuda (State or other jurisdiction of incorporation or organization)	Delaware (State or other jurisdiction of incorporation or organization)
94-2708455 (I.R.S. Employer Identification Number)	52-2272489 (I.R.S. Employer Identification Number)
80 South Main Street Hanover, New Hampshire 03755-2053 (603) 640-2200 (Address, including zip code, and telephone number, including area code, of registrant's principal executive office)	370 Church Street Guilford, Connecticut 06437 (203) 458-2380 (Address, including zip code, and telephone number, including area code, of registrant's principal executive office)

FUND AMERICAN TRUST I
FUND AMERICAN TRUST II
FUND AMERICAN TRUST III
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

04-6954892
04-6954893
04-6954894
(I.R.S. Employer Identification Number)

370 Church Street
Guilford, Connecticut 06437
(203) 458-2380
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive office)

J. Brian Palmer
White Mountains Insurance Group, Ltd.
80 South Main Street
Hanover, New Hampshire 03755-2053
(603) 640-2200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copy to:

William J. Whelan, III, Esq.
Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, New York 10019-7475
(212) 474-1000

Approximate date of commencement of proposed sale to public:
From time to time after the 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. / /

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. /X/

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. / /

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. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / /

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered(1)	Proposed Maximum Aggregate Offering Price(2)(3)(5)	Amount of Registration Fee(4)


Primary Offering:
Debt Securities of White Mountains Insurance Group, Ltd.
Preference Shares of White Mountains Insurance Group, Ltd.
Common Shares of White Mountains Insurance Group, Ltd. (5)
Debt Securities and Junior Subordinated Debt Securities of Fund American Companies, Inc.
Preferred Stock of Fund American Companies, Inc.
Preferred Securities of Fund American Trust I, Fund American Trust II and Fund American Trust III (collectively, the "Fund American Trusts")
Guarantees of Debt Securities and Junior Subordinated Debt Securities of Fund American Companies, Inc. by White Mountains Insurance Group, Ltd.
Guarantees of Preferred Securities of the Fund American Trusts by White Mountains Insurance Group, Ltd. or Fund American Companies, Inc.
Total for sale by Registrants	$2,000,000,000	$161,800
Secondary Offering: (6)
Common shares of White Mountains Insurance Group Ltd. (7)	$305,156,858	$24,688

Total	$2,305,156,858	$186,488

(1): There are being registered under this registration statement such indeterminate number of shares of common stock and preferred stock of the registrants and such indeterminate principal amount of debt securities of the registrants, as shall have an aggregate initial offering price not to exceed $2,305,156,858. If any debt securities are issued at an original issue discount, then the debt securities registered shall include such additional debt securities as may be necessary such that the aggregate initial public offering price of all securities issued pursuant to this registration statement will not exceed $2,305,156,858. This registration statement also covers such indeterminate amount of securities as may be issued upon conversion of the securities registered hereunder. Any securities registered under this registration statement may be sold separately or as units with other securities registered under this registration statement. The proposed maximum initial offering prices per unit will be determined, from time to time, by the registrant in connection with the issuance by the registrant of the securities registered under this registration statement.
(2): Not specified with respect to each class of securities being registered under this registration statement pursuant to General Instruction II.D. of Form S-3 under the Securities Act of 1933.
(3): Estimated solely for the purpose of calculating the registration fee, pursuant to Rule 457(o) under the Securities Act of 1933. Any offering of debt securities denominated in any foreign or composite currency will be treated as the equivalent in U.S. dollars based on the exchange rate applicable to the purchase of such debt securities from the registrant. No additional consideration will be received for common stock, preferred stock or debt securities that are issued upon conversion into or exchange for preferred stock or debt securities registered hereunder.
(4): Pursuant to Rule 457(o) under the Securities Act of 1933, the registration fee is calculated on the maximum offering price of all securities listed, and the table does not specify information by each class about the amount to be registered. A filing fee of $250,000 was previously paid in connection with $1,000,000,000 of securities registered under a registration statement on Form S-3 (Registration No. 333-73012) initially filed by the registrant on November 8, 2001. An aggregate amount of $300,000,000 of securities remain unsold under registration statement No. 333-73012. Accordingly, pursuant to Rule 457(p) under the Securities Act of 1933, the registrant is offsetting $75,000 of the previously paid filing fees against the total filing fee of $186,488 due in connection with this registration statement. In addition, $45,675 has previously been paid in connection with this registration statement. Accordingly, the remaining filing fee payable with respect to this registration statement is $65,813.
(5): Including such indeterminate number of shares of common stock as the registrants may elect from time to time to issue in connection with the conversion or exchange of securities registered hereunder.
(6): Up to 762,711 shares of White Mountains Insurance Group, Ltd. may be sold by selling shareholders from time to time pursuant to this registration statement.
(7): Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(c) of the Securities Act on the basis of the average of the high and low sales price of White Mountains' common shares on June 25, 2003.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant 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 the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

PROSPECTUS

Subject to completion, dated June 27, 2003

The information in this preliminary prospectus is not complete and may be changed. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

$2,000,000,000

WHITE MOUNTAINS INSURANCE GROUP, LTD.

DEBT SECURITIES, PREFERENCE SHARES AND COMMON SHARES

FUND AMERICAN COMPANIES, INC.
DEBT SECURITIES, JUNIOR SUBORDINATED DEBT SECURITIES
(IRREVOCABLY AND UNCONDITIONALLY GUARANTEED
TO THE EXTENT PROVIDED IN THIS PROSPECTUS
AND IN ANY PROSPECTUS SUPPLEMENT BY
WHITE MOUNTAINS INSURANCE GROUP, LTD.)
PREFERRED STOCK

FUND AMERICAN TRUST I
FUND AMERICAN TRUST II
FUND AMERICAN TRUST III
PREFERRED SECURITIES
(IRREVOCABLY AND UNCONDITIONALLY GUARANTEED
TO THE EXTENT PROVIDED IN THIS PROSPECTUS
AND IN ANY PROSPECTUS SUPPLEMENT
BY WHITE MOUNTAINS INSURANCE GROUP, LTD.
AND FUND AMERICAN COMPANIES)

762,711 COMMON SHARES OF WHITE MOUNTAINS INSURANCE GROUP, LTD. OFFERED BY SELLING SHAREHOLDERS

We may offer these securities in one or more offerings having an aggregate initial public offering price of up to $2,000,000,000. In addition, the selling shareholders named in this prospectus may sell up to 762,711 of our common shares. We will not receive any of the proceeds from the sale of our commmon shares by selling shareholders. When we decide to sell a particular series of securities, we will prepare a prospectus supplement describing those securities and our plan of distribution. If we decide to sell our common shares, a prospectus supplement will identify any of our shareholders that may also offer common shares for sale in such an offering. You should read this prospectus and any prospectus supplement carefully.

White Mountains Insurance Group, Ltd.'s common shares are listed on the New York Stock Exchange under the symbol "WTM".

See "Risk Factors" in any prospectus supplement to read about factors you should consider before investing in the securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined whether this prospectus is truthful or complete. any representation to the contrary is a criminal offense.

THE DATE OF THIS PROSPECTUS IS JUNE , 2003

TABLE OF CONTENTS

		Page
About this Prospectus		i
Prospectus Summary		1
Special Note on Forward-Looking Statements		3
Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends		4
Use of Proceeds		4
Business		4
Selling Shareholders		5
General Description of Securities		6
Plan of Distribution		38
Legal Matters		39
Experts		39
Where You Can Find More Information		39
Enforcement of Judgments and Other Matters		40

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that White Mountains Insurance Group, Ltd. ("White Mountains"), Fund American Companies, Inc. ("Fund American") and Fund American Trusts I, II and III (each a "Fund American Trust") filed with the Securities and Exchange Commission (the "SEC") utilizing a "shelf" registration process. Each of White Mountains, Fund American and each Fund American Trust is an issuer under the shelf. Under this shelf process, White Mountains, Fund American, each Fund American Trust and, in the case of an offering of our common shares, any selling shareholder (a "Selling Shareholder") may, from time to time sell any combination of the securities described in this prospectus in one or more offerings up to $2,305,156,858 or the equivalent of this amount in foreign currencies or foreign currency units.

This prospectus provides you with a general description of the securities that White Mountains, Fund American, each Fund American Trust or a Selling Shareholders may offer. Each time White Mountains, Fund American, a Fund American Trust or a Selling Shareholder sells securities registered under the registration statement to which this prospectus is part, the issuer will provide a prospectus supplement that will contain specific information about the terms of that offering. The issuer will file each prospectus supplement with the SEC. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described under the heading "Where You Can Find More Information". Neither White Mountains, Fund American, the Fund American Trusts nor any Selling Shareholder has authorized anyone to provide you with different information.

This prospectus does not contain separate financial statements for the Fund American Trusts. We believe these financial statements would be unnecessary pursuant to Rule 3-10(b) of Regulation S-X ("Rule 3-10(b)") since each trust is an indirect wholly-owned subsidiary of White Mountains, and we file consolidated financial information under the Exchange Act. The Fund American Trusts will be "finance subsidiaries" under Rule 3-10(b) with no independent function other than to issue common and trust preferred securities and to purchase junior subordinated debt securities of Fund American. White Mountains will provide a full, unconditional guarantee of each trust's obligations under their respective common and trust preferred securities and no other subsidiary of White Mountains guarantees these obligations.

Neither White Mountains, Fund American, the Fund American Trusts nor any Selling Shareholder is offering the securities in any state where the offer is not permitted. You should not assume that the information in this prospectus, or any supplement to this prospectus, is accurate at any date other than the date indicated on the cover page of these documents.

PROSPECTUS SUMMARY

This summary highlights selected information about White Mountains, Fund American and the Fund American Trusts and may not contain all the information that may be important to you. You should read the entire prospectus, our consolidated financial statements and the related notes and other information included in or incorporated by reference in this prospectus. You should also carefully read the prospectus supplement relating to the securities that you propose to buy before making an investment decision. Unless otherwise indicated or the context otherwise requires, references in this prospectus to "White Mountains," "we," "our," "us" or the "company" refer to White Mountains Insurance Group, Ltd. and its direct and indirect subsidiaries, including Fund American Companies, Inc., and references to "common shares" refers to common shares of White Mountains Insurance Group, Ltd., par value $1.00 per share.

White Mountains Insurance Group, Ltd.

White Mountains Insurance Group, Ltd. was originally formed as a Delaware corporation in 1980 and became a Bermuda limited liability company during 1999. The company is a holding company for its property and casualty insurance and reinsurance operations.

Fund American Companies, Inc.

Fund American is a Delaware corporation and an intermediate holding company for all of White Mountains' property and casualty insurance and reinsurance operations. OneBeacon Insurance Group LLC ("OneBeacon"), a wholly-owned subsidiary of Fund American, owns and controls several property and casualty insurance companies and Folksamerica Holding Company, Inc. ("Folksamerica"), a wholly-owned subsidiary of OneBeacon, owns and controls several property and casualty insurance and reinsurance companies.

White Mountains indirectly owns all the outstanding shares of Fund American common stock.

The Fund American Trusts

Each of Fund American Trusts I, II and III is a Delaware statutory trust that will offer and sell trust preferred securities from time to time in one or more offerings. Each Fund American Trust will use all of the proceeds from the sale of its trust preferred securities to buy junior subordinated debt securities of Fund American. The Fund American Trusts will receive cash payments from the junior subordinated debt securities, and will distribute these payments to the holders of their respective trust preferred and common securities.

Fund American will own all of the common securities of the Fund American Trusts.

THE OFFERING

The following securities may be offered from time to time:

•: common shares of White Mountains (including common shares offered by a Selling Shareholder);
•: preference shares of White Mountains;
•: preferred stock of Fund American;
•: debt securities of White Mountains or Fund American;
•: guarantees of White Mountains; and/or
•: trust preferred securities.

This prospectus describes the general terms that may apply to the securities; the specific terms of any particular securities that we may offer will be described in a separate supplement to this prospectus.

RISK FACTORS

Prospective purchasers of the securities should consider carefully all the information set forth in this prospectus and in any prospectus supplement. In particular, prospective purchasers of securities should evaluate the specific factors under the section "Risk Factors" in any prospectus supplement for considerations relevant to an investment in an offering.

OUR EXECUTIVE OFFICES

The principal executive offices of White Mountains is located at 80 South Main Street, Hanover, New Hampshire 03755-2053, and our telephone number is (603) 640-2200. Our headquarters are located at Crawford House, 23 Church Street, Hamilton, Bermuda HM 11 and our registered office is located at Clarendon House, 2 Church Street, Hamilton, Bermuda HM 11.

The principal executive offices of Fund American and the Fund American Trusts is located at 370 Church Street, Guilford, Connecticut 06437, and the telephone number for each entity is (203) 458-2380. The registered office for Fund American and the Fund American Trusts is located in Delaware at 1209 Orange Street, Wilmington, Delaware 19801.

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

This prospectus includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or incorporated by reference in this prospectus which address activities, events or developments which we expect or anticipate will or may occur in the future are forward-looking statements. The words "believe," "intend," "expect," "anticipate," "project," "estimate," "predict" and similar expressions are also intended to identify forward-looking statements. These forward-looking statements include, among others, statements with respect to our:

•: growth in book value per share or return on equity;
•: business strategy;
•: financial and operating targets or plans;
•: the adequacy of our loss and loss adjustment expense reserves;
•: projections of revenues, income (or loss), earnings (or loss) per share, dividends, market share or other financial forecasts;
•: expansion and growth of our business and operations; and
•: future capital expenditures.

These statements are based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties that could cause actual results to differ materially from our expectations, including:

•: the risk factors discussed in any prospectus supplement and in the documents we incorporate by reference;
•: the continued availability of capital and financing;
•: general economic, market or business conditions;
•: business opportunities (or lack thereof) that may be presented to and pursued by us;
•: competitive forces, including the conduct of other property and casualty insurers and reinsurers;
•: changes in domestic or foreign laws or regulations applicable to us, our competitors or our clients;
•: an economic downturn or other economic conditions adversely affecting our financial position;
•: loss reserves established by us subsequently proving to have been inadequate; and
•: other factors, most of which are beyond our control.

Consequently, all of the forward-looking statements made in this prospectus, in any accompanying prospectus supplement and in any document we incorporate by reference are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us or our business or operations. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.

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

The following table sets forth our ratio of earnings to fixed charges and the ratio of earnings to combined fixed charges and preferred stock dividends for White Mountains for the periods indicated.

	Year Ended December 31,						Three Months Ended March 31,
	1998	1999	2000	2001		2002	2002	2003
Ratio of earnings to fixed charges(1)	5.4	9.6	21.8	—	(2)	2.5	0.6	10.3
Ratio of earnings to combined fixed charges and preferred stock dividends	5.4	9.6	21.8	—	(3)	1.8	0.4	6.0

(1): For purposes of this computation, earnings are defined as earnings from continuing operations before income taxes plus fixed charges excluding capitalized interest. Fixed charges are the sum of interest expense and interest expense inherent in lease obligations.
(2): Fixed charges exceeded earnings by $427.5 million in 2001. This included $130 million of pre-tax charges in connection with the terrorist attacks of September 11, 2001.
(3): Combined fixed charges and preferred stock dividends exceeded earnings by $445.6 million in 2001. This included $130 million of pre-tax charges in connection with the terrorist attacks of September 11, 2001.

USE OF PROCEEDS

Unless indicated otherwise in a prospectus supplement, we expect to use the net proceeds from the sale of the securities for general corporate purposes, including repayment of borrowings, working capital, capital expenditures, share repurchase programs and acquisitions. Unless otherwise specified in the accompanying prospectus supplement, the Fund American Trusts will use all proceeds received from the sale of their trust preferred securities to purchase junior subordinated debt securities of Fund American.

If we offer common shares, we will not receive any proceeds from the sale of our common shares by a Selling Shareholder in such an offering.

BUSINESS

White Mountains Insurance Group, Ltd. was originally formed as a Delaware corporation in 1980. In October 1999, we completed a corporate reorganization that changed our domicile from Delaware to Bermuda (the "Redomestication"). Our principal businesses are conducted through our subsidiaries and affiliates in the businesses of property and casualty insurance and reinsurance.

Our business segments are OneBeacon, reinsurance and other operations. The OneBeacon Insurance Group LLC family of companies are U.S.-based property and casualty insurance writers including, among several others, OneBeacon Insurance Company, Pennsylvania General Insurance Company and Camden Fire Insurance Association (collectively "OneBeacon"). We acquired OneBeacon on June 1, 2001 (the "Acquisition").

Our reinsurance operations are conducted primarily through Folksamerica Holding Company Inc. (together with its reinsurance subsidiary, Folksamerica Reinsurance Company, "Folksamerica"). In connection with the Acquisition, we contributed Folksamerica to OneBeacon. OneBeacon and Folksamerica are run as separate entities, with distinct operations, management and business strategies. Our reinsurance operations also include our wholly owned subsidiaries, Fund American Reinsurance Company Ltd. ("Fund American Re") and White Mountains Underwriting Limited ("WMU"), as well as our investment in Montpelier Re Holdings Ltd. ("Montpelier"), a Bermuda-domiciled reinsurance holding company. Fund American Re is commercially domiciled in Bermuda but maintains its executive office and an operating branch in Stockholm, Sweden, and operates through an additional branch in Singapore. WMU is an Ireland-domiciled consulting services provider specializing in international property excess reinsurance.

Our other operations consist of the International American Group, Esurance Inc. ("Esurance") and our intermediate holding companies. The International American Group consists of Peninsula Insurance Company ("Peninsula"), American Centennial Insurance Company ("American Centennial") and British Insurance Company of Cayman ("British Insurance Company"), which we purchased in 1999. In 2000, we contributed American Centennial and British Insurance Company to Folksamerica. In 2001, in conjunction with the Acquisition, we contributed Peninsula to Folksamerica.

SELLING SHAREHOLDERS

Two of our shareholders, Franklin Mutual Advisers LLC ("Franklin") and Highfields Capital Management LP ("Highfields"), have elected to register common shares held by them in this prospectus. Common shares held by both Franklin and Highfields are beneficially owned by a number of managed accounts which are advised by Franklin and Highfields, respectively. Franklin is registering 677,966 common shares and Highfields is registering 84,745 common shares. Franklin and Highfields may only elect to sell all or part of their common shares at such time as White Mountains commits to an underwritten public offering of its common shares and such a decision by Franklin and Highfields will depend on the market price of our common shares at that time and other factors deemed relevant by Franklin and Highfields.

GENERAL DESCRIPTION OF SECURITIES

The issuers may offer common shares, preference shares, preferred stock, debt securities, trust preferred securities or any combination of them either individually or as units consisting of one or more securities under this prospectus.

The securities to be offered may involve a high degree of risk. You should consider the Risk Factors set forth in any prospectus supplement before investing in the securities.

DESCRIPTION OF OUR COMMON SHARES

The following description of White Mountains' common shares, together with the additional information included in any prospectus supplement, summarizes the material terms and provisions of White Mountains' common shares. The summary of the terms of our common shares set forth below does not purport to be complete and is qualified in its entirety by reference to our memorandum of continuance and bye-laws.

Authorized Share Capital

White Mountains' memorandum of continuance and the bye-laws provide that its authorized share capital is limited to 50,000,000 common shares, par value U.S. $1.00 per share. As of June 2, 2003, 9,002,395 common shares were issued and outstanding.

Voting

The holders of common shares are entitled to one vote per share except as restricted by the voting limitation described below (subject to the rights of the holders of any other class of shares that may be issued). All actions submitted to a vote of shareholders shall be voted on by the holders of common shares, voting together as a single class, except as provided by law.

With respect to the election of directors, each holder of common shares entitled to vote at the election has the right to vote, in person or by proxy, the number of shares held by him or her for as many persons as there are directors to be elected and for whose election that holder has a right to vote. The directors are divided into three classes with staggered terms, with only one class standing for election each year. Each nominee receiving the majority of the votes cast at a meeting duly called and constituted shall be elected a director of the company.

The bye-laws contain a provision limiting the voting rights of any person who beneficially holds (directly, indirectly or constructively under the Internal Revenue Code) 10% or more of the votes conferred by the issued shares of White Mountains to 9.9% of the votes conferred by the issued shares of White Mountains. This 9.9% voting limitation provision will not be applicable to John J. Byrne, any foundation or trust established by John J. Byrne, Patrick M. Byrne (his son) and/or any affiliate or associate of any of them or any group of which any of them is a part (each of them, a "Byrne Entity") with respect to any matter submitted to shareholders other than with respect to the election of directors.

In addition, the bye-laws contain a provision limiting the voting rights of any group (defined as two or more persons acting as a partnership, syndicate or other group for the purpose of acquiring, holding or disposition of the relevant securities) which beneficially holds 10% or more of the votes conferred by the issued shares of White Mountains to 9.9% of the votes conferred by the issued shares of White Mountains, except that this provision will not restrict (a) any Byrne Entity or (b) any person or group that the board of directors, by the affirmative vote of at least 75% of the entire board of directors, may exempt from this provision.

The bye-laws also contain a provision limiting the voting rights of any person to a reduced percentage who, at his or her election, notifies the board of directors to the percentage designated by such person (subject to acceptance of such cut-back by the board in its sole discretion) so that (and to the extent) such person may meet any applicable insurance or other regulatory requirement or voting threshold or

limitation that may be applicable to such person or to evidence that such person's voting power is no greater than such threshold.

Dividends

Holders of common shares are entitled to participate, on a share-for-share basis, with the holders of any other common shares outstanding, with respect to any dividends declared by the board of directors of White Mountains. Dividends will generally be payable in U.S. dollars.

Liquidation

On a liquidation of White Mountains, holders of common shares are entitled to receive any assets remaining after the payment of our debts and the expenses of the liquidation, subject to such special rights as may be attached to any other class of shares.

Redemption

White Mountains is entitled to redeem common shares from a shareholder at fair market value if its board of directors determines that common share ownership by that shareholder may result in adverse tax, regulatory or legal consequences to White Mountains, any of its subsidiaries or any of the holders of common shares.

Variation Of Rights

Under the bye-laws, if at any time White Mountains' share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of the issue of the shares of that class) may be varied with the consent in writing of the holders of a majority of the issued shares of that class or with the sanction of a resolution passed at a separate general meeting of the holders of the shares of that class.

Change of Control

Bermuda law permits an amalgamation between two or more Bermuda companies, or between one or more Bermuda exempted companies and one or more foreign corporations, subject, unless the bye-laws otherwise provide, to obtaining a majority vote of three-fourths of the shareholders of each of the companies, and of each class of shares entitled to vote separately as a class at such a meeting, present and voting in person or by proxy at a meeting called for that purpose. Unless the bye-laws otherwise provide, Bermuda law also requires that the quorum at the meetings be at least two persons holding or representing by proxy one-third of the issued shares of the company or the class. Each share carries the right to vote in respect of an amalgamation, whether or not it otherwise carries the right to vote.

Except as set forth in the next paragraph, the bye-laws provide that any amalgamation approved by two-thirds of White Mountains' board of directors shall only require approval by a majority of the voting power held by the shareholders present at a meeting of the shareholders where a quorum is present.

White Mountains' bye-laws generally prohibit us from engaging in a "business combination" with an "interested shareholder" for a period of three years after the time of the transaction in which the person became an interested shareholder, unless:

(1): prior to that time, the board of directors approves the transaction or the business combination;
(2): upon consummation of the transaction which resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the outstanding voting stock, excluding for purposes of determining the number of shares outstanding, shares owned by directors who are also officers and by certain employee plans; or
(3): on or after that time the board of directors and the shareholders by an affirmative vote of at least 66²/3% of the outstanding voting stock which is not owned by the interested shareholder approve the transaction.

The definition of "business combinations" includes mergers, asset sales and other transactions resulting in a financial benefit to the interested shareholder. An "interested shareholder" is a person who, together with affiliates and associates, owns or, within three years, did own 15% or more of White Mountains' voting stock. However, the bye-laws provide that each Byrne Entity is excepted from being an "interested shareholder".

Bermuda law also provides that where an offer is made for shares in a company by another company and, within four months of the offer, the holders of at least 90% in value of the shares which are the subject of the offer (other than shares already held by or on behalf of the offeror) accept, the offeror may by notice, given within two months after such approval is obtained, require any non-tendering shareholder to transfer their shares on the terms of the offer. Dissenting shareholders may apply to a court within one month of notice objecting to the transfer and the court may make any order it thinks fit. The burden is on the dissenting shareholders to show that the court should exercise its discretion to enjoin the required transfer, which the court will be unlikely to do unless there is evidence of fraud or bad faith or collusion between the offeror and the holders of the shares who have accepted the offer as a means of unfairly forcing out minority shareholders.

DESCRIPTION OF PREFERENCE SHARES AND PREFERRED STOCK

White Mountains' Preference Shares

The following description of White Mountains' preference shares, together with the additional information included in any prospectus supplement, summarizes the material terms and provisions of these types of securities. If we issue preference shares, the certificate of designation for the preference shares will be filed with the SEC as an exhibit to a Current Report on Form 8-K and a prospectus supplement will contain a full description of the terms thereof. We encourage you to read the Memorandum of Continuance and the Bye-laws of White Mountains, referred to below, which have been filed with the SEC and which are incorporated herein by reference.

The Memorandum of Continuance and the Bye-Laws of White Mountains provide that the authorized share capital of White Mountains is limited to 20,000,000 preference shares having a par value of U.S. $1.00 per share ("Preference Shares"). As of June 2, 2003, no Preference Shares were issued and outstanding.

Under White Mountains' Bye-Laws and pursuant to authority delegated by its shareholders, the board of directors of White Mountains has the full power to issue any unissued Preference Shares of White Mountains on such terms and conditions as it may, in its absolute discretion, determine. The board of directors may authorize the issue of Preference Shares in one or more series, may establish from time to time the number of shares to be included in each such series and may fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof.

The authority of the board of directors with respect to each such series shall include, but not be limited to, determination of the following:

•: the number of shares constituting that series and the distinctive designation of that series;
•: the dividend rate on the shares of that series, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;
•: whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights;
•: whether that series shall have conversion or exchange privileges (including conversion into common shares), and, if so, the terms and conditions of such conversion or exchange, including provision for adjustment of the conversion or exchange rate in such events as the board of directors shall determine;

•: whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the manner of selecting shares for redemption if less than all shares are to be redeemed, the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;
•: whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;
•: the right of the shares of that series to the benefit of conditions and restrictions upon the creation of indebtedness of White Mountains or any subsidiary, upon the issue of any additional shares (including additional shares of such series or any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by White Mountains or any subsidiary of any outstanding shares of White Mountains;
•: the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of White Mountains, and the relative rights of priority, if any, of payment of shares of that series; and
•: any other relative participating, optional or other special rights, qualifications, limitations or restrictions of that series.

Any Preference Shares of any series which have been redeemed (whether through the operation of a sinking fund or otherwise) or which, if convertible or exchangeable, have been converted into or exchanged for shares of any other class or classes shall have the status of authorized and unissued Preference Shares of the same series and may be reissued as a part of the series of which they were originally a part or may be reclassified and reissued as part of a new series of Preference Shares to be created by resolution or resolutions of the Board of Directors or as part of any other series of Preference Shares, all subject to the conditions and the restrictions on issuance set forth in the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of Preference Shares.

Fund American Preferred Stock

The following description of Fund American's preferred stock, together with the additional information included in any prospectus supplement, summarizes the material terms and provisions of these types of securities. If Fund American issues preferred stock, the certificate of designation for the preferred stock will be filed with the SEC as an exhibit to a Current Report on Form 8-K and a prospectus supplement will contain a full description of the terms thereof. We encourage you to read the certificate of incorporation, as amended, the Certificate of Designation of Fund American's Series A Preferred Stock and the Bye-laws of Fund American, referred to below, which have been filed with the SEC and which are incorporated herein by reference.

The certificate of incorporation, as amended, and the By-Laws of Fund American provide that the authorized common share capital of Fund American is currently limited to 1,000 shares of common stock, par value U.S. $1.00 per share and 300,000 shares of preferred stock having a par value of U.S. $1.00 per share. As of June 2, 2003, 500 shares of common stock and 300,000 shares of preferred stock were issued and outstanding. Before issuing preferred stock, Fund American will be required to effect an amendment to its certificate of incorporation to permit the issuance of additional preferred stock. Details of such an amendment will be included in any prospectus supplement relating to the issuance of Fund American's preferred stock.

Under Fund American's By-Laws, the board of directors of Fund American has the full power to issue any unissued shares of Fund American. The board of directors may authorize the issue of preferred stock in one or more series, may establish from time to time the number of stock to be included in each such series and may fix the designation, powers, preferences and rights of the stock of each such series and the qualifications, limitations or restrictions thereof, provided that, any such issuance is made in accordance with the Certificate of Designation of Fund American's Series A Preferred Stock. All of the Series A

Preferred Stock (300,000 shares) was issued to Berkshire Hathaway Inc. on June 1, 2001 in connection with the acquisition of OneBeacon (the "FAC Preferred Stock"). The FAC Preferred Stock is entitled to a dividend of no less than 2.35% per quarter and is mandatorily redeemable on May 31, 2008. The FAC Preferred Stock is senior to any shares of any other class or series of capital stock of Fund American ("Junior Stock") and is entitled to receive dividends in preference to any Junior Stock. The Certificate of Designation under which the FAC Preferred Stock was issued restricts the ability of Fund American to declare or pay dividends on Junior Stock, to repurchase Junior Stock and to make loans or guarantee indebtedness of White Mountains. The FAC Preferred Stock does not have voting rights. A copy of the Certificate of Designation under which the FAC Preferred Stock was issued is incorporated by reference into this Registration Statement.

Subject to compliance with the terms under which the FAC Preferred Stock was issued, the authority of the board of directors with respect to each such series shall include, but not be limited to, determination of the following:

•: the number of shares constituting that series and the distinctive designation of that series;
•: the dividend rate on the shares of that series, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;
•: whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights;
•: whether that series shall have conversion or exchange privileges (including conversion into the common shares of White Mountains), and, if so, the terms and conditions of such conversion
or exchange, including provision for adjustment of the conversion or exchange rate in such events as the board of directors shall determine;
•: whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the manner of selecting shares for redemption if less than all shares are to be redeemed, the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;
•: whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;
•: the right of the shares of that series to the benefit of conditions and restrictions upon the creation of indebtedness of Fund American or any subsidiary, upon the issue of any additional shares (including additional shares of such series or any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by Fund American or any subsidiary of any outstanding shares of Fund American;
•: the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of Fund American, and the relative rights of priority, if any, of payment of shares of that series; and
•: any other relative participating, optional or other special rights, qualifications, limitations or restrictions of that series.

DESCRIPTION OF DEBT SECURITIES

White Mountains and Fund American (each, an "Issuer") may offer, from time to time, unsecured general obligations, which may be senior (the "Senior Debt Securities") or subordinated (the "Subordinated Debt Securities" and, together with the Senior Debt Securities, the "Debt Securities"). The following description summarizes the general terms and provisions of the Debt Securities to which any prospectus supplement may relate. We will describe the specific terms of the Debt Securities and the

extent, if any, to which the general provisions summarized below may apply to any series of the Debt Securities in the prospectus supplement relating to the series.

The Issuer may issue Senior Debt Securities from time to time, in one or more series under a senior indenture (the "Senior Indenture"), between White Mountains (if an issuer or guarantor), Fund American and Bank One, National Association, as senior trustee, or another senior trustee named in a prospectus supplement (the "Senior Trustee"). The form of Senior Indenture is filed as an exhibit to this registration statement. The Issuer may issue Subordinated Debt Securities from time to time, in one or more series under a subordinated indenture (the "Subordinated Indenture"), between White Mountains (if an issuer or guarantor), Fund American and Bank One, National Association, as subordinated trustee, or another subordinated trustee named in a prospectus supplement (the "Subordinated Trustee"). The form of Subordinated Indenture is filed as an exhibit to this registration statement. Together, the Senior Indenture and the Subordinated Indenture are referred to as the "Indentures" and, together, the Senior Trustee and the Subordinated Trustee are referred to as the "Debt Trustees". None of the Indentures will limit the amount of Debt Securities that may be issued. The applicable Indenture will provide that Debt Securities may be issued up to an aggregate principal amount authorized by the Issuer and may be payable in any currency or currency unit designated by the Issuer or in amounts determined by reference to an index.

General

The Senior Debt Securities will be unsecured and will rank equally with the Issuer's other unsecured and unsubordinated debt, if any, unless the Issuer is required to secure the Senior Debt Securities as described below under "—Senior Debt Securities". The Issuer's obligations under any Subordinated Debt Securities will be subordinate in right of payment to all of its senior indebtedness and will be described in an accompanying prospectus supplement. The Issuer will issue Debt Securities from time to time and offer the Debt Securities on terms determined by market conditions at the time of sale.

The Issuer may issue the Debt Securities in one or more series with the same or various maturities, at par, at a premium, or at a discount. Any Debt Securities bearing no interest or interest at a rate which at the time of issuance is below market rates will be sold at a discount, which may be substantial, from their stated principal amount. We will describe the Federal income tax consequences and other special considerations applicable to any substantially discounted Debt Securities in the related prospectus supplement.

You should refer to the prospectus supplement for the following terms of the Debt Securities offered hereby:

•: the designation, aggregate principal amount and authorized denominations of the Debt Securities;
•: the percentage of the principal amount at which the Issuer will issue the Debt Securities;
•: the date or dates on which the Debt Securities will mature;
•: the annual interest rate or rates of the Debt Securities, or the method of determining the rate or rates;
•: the date or dates on which any interest will be payable, the date or dates on which payment of any interest will commence and the regular record dates for the interest payment dates;
•: the terms of any mandatory or optional redemption, including any provisions for any sinking, purchase or other similar funds, or repayment options;
•: the currency, currencies or currency units for which the Debt Securities may be purchased and in which the principal, any premium and any interest may be payable;
•: if the currency, currencies or currency units for which the Debt Securities may be purchased or in which the principal, any premium and any interest may be payable is at the Issuer's election or the purchaser's election, the manner in which the election may be made;

•: if the amount of payments on the Debt Securities is determined by an index based on one or more currencies or currency units, or changes in the price of one or more securities or commodities, the manner in which the amounts may be determined;
•: the extent to which any of the Debt Securities will be issuable in temporary or permanent global form, and the manner in which any interest payable on a temporary or permanent global security will be paid;
•: the terms and conditions upon which the Debt Securities may be convertible into or exchanged for common shares, Preference Shares, or indebtedness or other securities of any kind;
•: information with respect to book-entry procedures, if any;
•: a discussion of the Federal income tax, accounting and other special considerations, procedures and limitations with respect to the Debt Securities; and
•: any other specific terms of the Debt Securities not inconsistent with the applicable Indenture.

If the Issuer sells any of the Debt Securities for one or more foreign currencies or foreign currency units or if the principal of, premium on, if any, or interest on any series of Debt Securities will be payable in one or more foreign currencies or foreign currency units, it will describe the restrictions, elections, Federal income tax consequences, specific terms and other information with respect to the issue of Debt Securities and the currencies or currency units in the related prospectus supplement.

Unless specified otherwise in a prospectus supplement, the principal of, premium on, and interest on the Debt Securities will be payable, and the Debt Securities will be transferable, at the corporate trust office of the applicable Debt Trustee in New York, New York. However, the Issuer may make payment of interest at its option by check mailed on or before the payment date to the address of the person entitled to the interest payment as it appears on the registry books of the Issuer or its agents.

Unless specified otherwise in a prospectus supplement, the Issuer will issue the Debt Securities only in fully registered form and in denominations of $1,000 and any integral multiple of $1,000. No service charge will be made for any transfer or exchange of any Debt Securities, but the Issuer may, except in specific cases not involving any transfer, require payment of a sufficient amount to cover any tax or other governmental charge payable in connection with the transfer or exchange. Unless we specify otherwise in the prospectus supplement, the Issuer will pay interest on outstanding Debt Securities to holders of record on the date 15 days immediately prior to the date the interest is to be paid.

The Issuer's rights and the rights of its creditors, including holders of Debt Securities, to participate in any distribution of assets of any of the Issuer's subsidiaries upon its liquidation or reorganization or otherwise is subject to the prior claims of creditors of the subsidiary, except to the extent that the Issuer's claims as a creditor of the subsidiary may be recognized. The Issuer's operations are conducted through subsidiaries and its only significant assets are the capital stock of its subsidiaries. Therefore, the Issuer is dependent upon the earnings and cash flow and dividend paying ability of its subsidiaries to meet its obligations, including obligations under the Debt Securities. The Debt Securities will be effectively subordinated to all existing and future indebtedness, preferred stock and other liabilities of the Issuer's subsidiaries.

White Mountains Guarantee

White Mountains may guarantee to each holder of Debt Securities issued by Fund American the due and punctual payment of the principal of, and any premium and any interest on, those Debt Securities, when and as the same becomes due and payable, whether at maturity, upon acceleration or otherwise. The related prospectus supplement will describe whether White Mountains will provide such a guarantee, and if so, the terms under which such guarantee will be provided.

Global Securities

The Issuer may issue Debt Securities of a series in whole or in part in the form of one or more global securities and will deposit them with or on behalf of a depositary identified in the prospectus supplement relating to that series. The Issuer may issue global securities only in fully registered form and in either temporary or permanent form. Unless and until it is exchanged in whole or in part for the individual Debt Securities represented thereby, a global security may not be transferred except as a whole by the depositary for the global security to a nominee of the depositary or by a nominee of the depositary to the depositary or another nominee of the depositary or by the depositary or any nominee of the depositary to a successor or any nominee of such successor.

The specific terms of the depositary arrangement relating to a series of Debt Securities will be described in the prospectus supplement relating to that series. It is anticipated that the following provisions will generally apply to depositary arrangements.

Upon the issuance of 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 the depositary. The accounts will be designated by the dealers, underwriters or agents with respect to the Debt Securities or by the Issuer if the Debt Securities are offered and sold directly by it. Ownership of beneficial interests in a global security will be limited to persons that have accounts with the applicable depositary participants or persons that hold interests through participants. Ownership of beneficial interests in the global security will be shown on, and the transfer of that ownership will be effected only through, records maintained by:

•: the applicable depositary or its nominee, with respect to interests of participants, and
•: the records of participants, with respect to interests of persons other than participants.

The laws of some states require that purchasers of securities take physical delivery of the securities in definitive form. These limits and laws may impair the ability to transfer beneficial interests in a global security.

So long as the depositary for a global security or its nominee is the registered owner of the global security, the depositary or the nominee will be considered the sole owner or holder of the Debt Securities represented by the global security for all purposes under the applicable Indenture. Except as provided below, owners of beneficial interests in a global security will:

•: not be entitled to have any of the individual Debt Securities of the series represented by the global security registered in their names;
•: not receive or be entitled to receive physical delivery of any Debt Security of that series in definitive form;
•: not be considered the owners or holders thereof under the applicable Indenture governing the Debt Securities.

Payments of principal of, any premium on and any interest on individual Debt Securities represented by a global security registered in the name of a depositary or its nominee will be made to the depositary or its nominee as the registered owner of the global security representing the Debt Securities. Neither the Issuer, the applicable Debt Trustee for the Debt Securities, any paying agent, nor the security registrar for the Debt Securities will have any responsibility or liability for the records relating to or payments made on account of beneficial ownership interests of the global security for the Debt Securities or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests.

The Issuer expects that the depositary for a series of Debt Securities or its nominee, upon receipt of any payment of principal, premium or interest in respect of a permanent global security representing any of the Debt Securities, will immediately credit participants' accounts with payments in amounts proportionate to their beneficial interests in the principal amount of the global security for the Debt Securities as shown on the records of the depositary or its nominee. The Issuer also expects that payments by

participants to owners of beneficial interests in the global security held through the 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". The payments will be the responsibility of those participants.

If the depositary for a series of Debt Securities is at any time unwilling, unable or ineligible to continue as depositary and a successor depositary is not appointed by the Issuer within 90 days, the Issuer will issue individual Debt Securities of that series in exchange for the global security representing that series of Debt Securities. In addition, the Issuer may at any time and in its sole discretion, subject to any limitations described in the prospectus supplement relating to the Debt Securities, determine not to have any Debt Securities of a series represented by one or more global securities. In that event, the Issuer will issue individual Debt Securities of that series in exchange for the global security or Securities representing that series of Debt Securities. Further, if the Issuer so specifies with respect to the Debt Securities of a series, an owner of a beneficial interest in a global security representing Debt Securities of that series may, on terms acceptable to the Issuer, the applicable Debt Trustee and the depositary for such global security, receive individual Debt Securities of that series in exchange for the beneficial interests, subject to any limitations described in the prospectus supplement relating to the Debt Securities. In any such instance, an owner of a beneficial interest in a global security will be entitled to physical delivery of individual Debt Securities of the series represented by the global security equal in principal amount to the beneficial interest and to have the Debt Securities registered in its name. Individual Debt Securities of the series so issued will be issued in denominations, unless otherwise specified by the Issuer, of $1,000 and integral multiples of $1,000.

Amalgamation, Consolidation, Merger and Sale of Assets

If Fund American is the Issuer, the applicable Indentures prohibit Fund American's amalgamation, consolidation with or merger into any other entity or the transfer of Fund American's properties and assets substantially as an entirety to any other entity, unless:

•: the successor entity is organized and existing under the laws of the United States, any State thereof, the District of Columbia or Bermuda, and expressly assumes by a supplemental indenture the punctual payment of the principal of, premium on and interest on all the outstanding Debt Securities and the performance of every covenant in the applicable Indenture to be performed or observed on Fund American's part;
•: immediately after giving effect to the transaction, no event of default has happened and is continuing; and
•: Fund American or the successor entity has delivered to the applicable Debt Trustee an officers' certificate stating that the amalgamation, consolidation, merger, conveyance or transfer and the supplemental indenture comply with the foregoing provisions relating to the transaction.

In case of any amalgamation, consolidation, merger, conveyance or transfer of the Issuer, the successor corporation will succeed to and be substituted for the Issuer as obligor on the Debt Securities, with the same effect as if it had been named as the Issuer in the applicable Indenture. If White Mountains is the Issuer or guarantor of Debt Securities, White Mountains' violation of the conditions relating to amalgamation, consolidation, merger, conveyance or transfer stated above (as applied to White Mountains rather than Fund American), and the continuance of such violation for 90 days after notice is given to White Mountains as provided in the applicable Indenture, will constitute an event of default under the applicable Indenture. Unless otherwise specified in a prospectus supplement, other than the restrictions on liens described below, the Indentures and the Debt Securities do not contain any covenants or other provisions designed to protect holders of Debt Securities in the event of a highly leveraged transaction involving the Issuer or any Subsidiary.

Events of Default; Waiver and Notice of Default; Debt Securities in Foreign Currencies

An event of default when used in an Indenture will mean any of the following as to any series of Debt Securities:

•: default for 30 days in payment of any interest, or, in the case of the Subordinated Indenture, for a period of 90 days;
•: default in payment of principal of or any premium at maturity;
•: default in payment of any sinking or purchase fund or similar obligation;
•: default by the Issuer in the performance of any other covenant or warranty contained in the applicable Indenture for the benefit of that series which has not been remedied for a period of 90 days after notice is given;
•: with respect to any Debt Securities issued or guaranteed by White Mountains, White Mountains' violation of the conditions relating to amalgamation and other transactions, and the continuance of such violation, in each case as described above under "—Amalgamation, Consolidation, Merger and Sale of Assets"; or
•: events of the Issuer's bankruptcy, insolvency and reorganization.

A default under the Issuer's other indebtedness will not be a default under the Indentures and a default under one series of Debt Securities will not necessarily be a default under another series.

Each Indenture provides that if an event of default described in the first five bullet points above has occurred and is continuing with respect to any series, and the event of default under the fourth or fifth bullet point is with respect to less than all series of Debt Securities then outstanding, either the applicable Debt Trustee or the holders of not less than 25% in aggregate principal amount of the Debt Securities of the series then outstanding, each series acting as a separate class, may declare the principal or, in the case of original issue discount securities, the portion specified in the terms thereof, of all outstanding Debt Securities of the series and the accrued interest to be due and payable immediately. Each Indenture further provides that if an event of default described in the fourth, fifth or sixth bullet point above has occurred and is continuing, and the event of default under the fourth or fifth bullet point is with respect to all series of Debt Securities then outstanding, either the applicable Debt Trustee or the holders of at least 25% in aggregate principal amount of all Debt Securities then outstanding, treated as one class, may declare the principal or, in the case of original issue discount securities, the portion specified in the terms thereof, of all Debt Securities then outstanding and the accrued interest to be due and payable immediately. However, upon certain conditions the declarations may be annulled and past defaults, except for defaults in the payment of principal of, premium on, or interest on, the Debt Securities or in the payment of any sinking or purchase fund or analogous obligations with respect to the Debt Securities of such series and in compliance with certain covenants, may be waived by the holders of a majority in aggregate principal amount of the Debt Securities of the series then outstanding.

Under each Indenture the applicable Debt Trustee must give notice to the holders of each series of Debt Securities of all uncured defaults known to it with respect to that series within 90 days after a default occurs. The term "default" includes the events specified above without notice or grace periods. However, in the case of any default of the type described in the fourth or fifth bullet point above, no notice may be given until at least 90 days after the occurrence of the event. The Debt Trustee will be protected in withholding notice if it in good faith determines that the withholding of notice is in the interests of the holders of the Debt Securities, except in the case of default in the payment of principal of, premium on, or interest on any of the Debt Securities, or default in the payment of any sinking or purchase fund installment or analogous obligations.

No holder of any Debt Securities of any series may institute any action under either Indenture unless:

•: the holder has given the Debt Trustee written notice of a continuing event of default with respect to that series;
•: the holders of not less than 25% in aggregate principal amount of the Debt Securities of the series then outstanding have requested the Debt Trustee to institute proceedings in respect of the event of default;
•: the holder or holders have offered the Debt Trustee reasonable indemnity as the Debt Trustee may require;
•: the Debt Trustee has failed to institute an action for 60 days; and
•: no inconsistent direction has been given to the Debt Trustee during the 60-day period by the holders of a majority in aggregate principal amount of Debt Securities of the series then outstanding.

The holders of a majority in aggregate principal amount of the Debt Securities of any series affected and then outstanding will have the right, subject to limitations, to direct the time, method and place of conducting any proceeding for any remedy available to the applicable Debt Trustee or exercising any trust or power conferred on the Debt Trustee with respect to a series of Debt Securities. Each Indenture provides that if an event of default occurs and is continuing, the Debt Trustee will be required to use the degree of care of a prudent person in the conduct of that person's own affairs in exercising its rights and powers under the Indenture. Each Indenture further provides that the Debt Trustee will not be required to expend or risk its own funds in the performance of any of its duties under the Indenture unless it has reasonable grounds for believing that repayment of the funds or adequate indemnity against the risk or liability is reasonably assured to it.

The Issuer must furnish to the Debt Trustees within 120 days after the end of each fiscal year a statement signed by one of its officers to the effect that a review of its activities during the year and of its performance under the applicable Indenture and the terms of the Debt Securities has been made under his supervision, and, to the knowledge of the signatories based on the review, the Issuer has complied with all conditions and covenants of the Indenture through the year or, if the Issuer is in default, specifying the default.

To determine whether the holders of the requisite principal amount of Debt Securities have taken action as described above when the Debt Securities are denominated in a foreign currency, the principal amount of the Debt Securities will be deemed to be that amount of United States dollars that could be obtained for the principal amount based on the applicable spot rate of exchange as of the date the action is taken as evidenced to the Debt Trustee as provided in the Indenture.

To determine whether the holders of the requisite principal amount of Debt Securities have taken action as described above when the Debt Securities are original issue discount securities, the principal amount of the Debt Securities will be deemed to be the portion of the principal amount that would be due and payable at the time the action is taken upon a declaration of acceleration of maturity.

Modification of the Indentures

The Indentures provide that the Issuer and the applicable Debt Trustee may, without the consent of any holders of Debt Securities, enter into supplemental indentures for the purposes, among other things, of:

•: adding to the Issuer's covenants;
•: adding additional events of default;
•: establishing the form or terms of any series of Debt Securities; or

•: curing ambiguities or inconsistencies in the Indenture or making other provisions.

With specific exceptions, the applicable Indenture or the rights of the holders of the Debt Securities may be modified by the Issuer and the applicable Debt Trustee with the consent of the holders of not less than a majority in aggregate principal amount of the Debt Securities of each series affected by the modification then outstanding, but no modification may be made without the consent of the holder of each outstanding Debt Security affected which would:

•: change the maturity of any payment of principal of, or any premium on, or any installment of interest on any Debt Security;
•: reduce the principal amount of or the interest or any premium on any Debt Security;
•: change the method of computing the amount of principal of or interest on any date;
•: change any place of payment where, or the currency in which, any Debt Security or any premium or interest is payable;
•: impair the right to sue for the enforcement of any payment on or after the maturity thereof, or, in the case of redemption or repayment, on or after the redemption date or the repayment date;
•: reduce the percentage in principal amount of the outstanding Debt Securities of any series, the consent of the holders of which is required for any modification of, or waiver of compliance with provisions of, the applicable Indenture or specific defaults and their consequences provided for in the Indenture; or
•: modify any of the provisions of specific sections of the applicable Indenture, including the provisions summarized in this section, except to increase any required consent percentage or to provide that other provisions of the Indenture cannot be modified or waived without the consent of the holder of each outstanding Debt Security affected thereby.

Satisfaction and Discharge of the Indentures; Defeasance

The Indentures will generally cease to be of any further effect with respect to a series of Debt Securities if the Issuer delivers all Debt Securities of that series, with limited exceptions, for cancellation to the applicable Debt Trustee or all Debt Securities of that series not previously delivered for cancellation to the applicable Debt Trustee have become due and payable or will become due and payable or called for redemption within one year, and the Issuer has deposited with the applicable Debt Trustee as trust funds the entire amount sufficient to pay at maturity or upon redemption all the Debt Securities, no default with respect to the Debt Securities has occurred and is continuing on the date of the deposit, and the deposit does not result in a breach or violation of, or default under, the applicable Indenture or any other agreement or instrument to which the Issuer is a party.

The Issuer has a "legal defeasance option" under which it may terminate, with respect to the Debt Securities of a particular series, all of its obligations under the Debt Securities and the applicable Indenture. In addition, the Issuer has a "covenant defeasance option" under which it may terminate, with respect to the Debt Securities of a particular series, the Issuer's obligations with respect to the Debt Securities under specified covenants contained in the applicable Indenture. If the Issuer exercises its legal defeasance option with respect to a series of Debt Securities, payment of the Debt Securities may not be accelerated because of an event of default. If the Issuer exercises its covenant defeasance option with respect to a series of Debt Securities, payment of the Debt Securities may not be accelerated because of an event of default related to the specified covenants.

The Issuer may exercise its legal defeasance option or its covenant defeasance option with respect to the Debt Securities of a series only if:

•: the Issuer irrevocably deposits in trust with the applicable Debt Trustee cash or debt obligations of the United States of America or its agencies or instrumentalities for the payment of principal, premium and interest with respect to the Debt Securities to maturity or redemption;
•: the Issuer delivers to the applicable Debt Trustee a certificate from a nationally recognized firm of independent public accountants expressing their opinion that the cash or debt obligations described above on deposit with the applicable Debt Trustee will provide cash sufficient to pay the principal, premium, and interest when due with respect to all the Debt Securities of that series to maturity or redemption;
•: 91 days pass after the deposit is made and during the 91-day period no default described in the fifth bullet point under "—Events of Default, Waiver and Notice Of Default; Debt Securities in Foreign Currencies" above with respect to the Issuer occurs that is continuing at the end of the period;
•: no default has occurred and is continuing on the date of the deposit;
•: the deposit does not constitute a default under any other agreement binding on the Issuer;
•: the Issuer delivers to the applicable Debt Trustee an opinion of counsel to the effect that the trust resulting from the deposit does not constitute a regulated investment company under the Investment Company Act of 1940;
•: the Issuer has delivered to the applicable Debt Trustee an opinion of counsel addressing specific Federal income tax matters relating to the defeasance; and
•: the Issuer delivers to the applicable Debt Trustee an officers' certificate and an opinion of counsel stating that all conditions to the defeasance and discharge of the Debt Securities of that series have been complied with.

The applicable Debt Trustee will hold in trust cash or debt obligations of the United States of America or its agencies or instrumentalities deposited with it as described above and will apply the deposited cash and the proceeds from deposited debt obligations of the United States of America or its agencies or instrumentalities to the payment of principal, premium, and interest with respect to the Debt Securities of the defeased series.

Concerning the Debt Trustees

The Issuer will identify the Debt Trustee for the Senior Debt Securities and for the Subordinated Debt Securities in the relevant prospectus supplement. The Issuer or the holders of a majority of the then outstanding principal amount of the Debt Securities issued under an Indenture and, in specific instances, the issuer and any owner who has been bona fide holder of a Security of such series for at least 6 months, may remove the Debt Trustee and appoint a successor Debt Trustee. The Debt Trustee may become the owner or pledgee of any of the Debt Securities with the same rights, subject to conflict of interest and certain other restrictions, it would have if it were not the Debt Trustee. The Debt Trustee and any successor trustee must be a corporation organized and doing business under the laws of the United States or of any state thereof, authorized under those laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to examination by Federal or state authority. Subject to applicable law relating to conflicts of interest, the Debt Trustee may also serve as trustee under other indentures relating to debt securities issued by the Issuer or its affiliated companies and may engage in commercial transactions with the Issuer and its affiliated companies. The initial Debt Trustee under each Indenture is Bank One, National Association.

Senior Debt Securities

In addition to the provisions previously described in this prospectus and applicable to all Debt Securities, the following description of the Senior Debt Securities summarizes the general terms and provisions of the Senior Debt Securities to which any prospectus supplement may relate. The Issuer will describe the specific terms of the Senior Debt Securities offered by any prospectus supplement and the extent, if any, to which the general provisions summarized below may apply to any series of its Senior Debt Securities in the prospectus supplement relating to that series.

Ranking of Senior Debt Securities

Unless we specify otherwise in a prospectus supplement for a particular series of Debt Securities, all series of Senior Debt Securities will be the Issuer's senior indebtedness and will be direct, unsecured obligations of the Issuer ranking equally with all of the Issuer's other unsecured and unsubordinated indebtedness. Because the Issuer is a holding company, the Debt Securities will be effectively subordinated to all existing and future liabilities, including indebtedness, of the Issuer's subsidiaries.

Covenants

The Senior Indenture contains the covenants summarized below, which will apply to the Issuer and, in the case of issuances of Senior Debt Securities by Fund American that are guaranteed by White Mountains, will also apply to White Mountains as guarantor of Fund American's obligations. The covenants will be applicable, unless waived or amended, so long as any of the Senior Debt Securities are outstanding, unless stated otherwise in the prospectus supplement.

Limitations On Liens

The Issuer will not, and will not permit any subsidiary to, create, incur, assume or permit to exist any lien on any stock or indebtedness of a subsidiary or property of the Issuer or any subsidiary, to secure any debt of the Issuer or any subsidiary or any other person, or permit any subsidiary to do so, without securing the Senior Debt Securities equally and ratably with such debt for so long as such debt shall be so secured, subject to certain exceptions. Exceptions include:

•: existing liens, including the existing pledge of the capital stock of substantially all of our operating subsidiaries pursuant to the credit facility, and including additional liens to secure the obligations under the credit facility, including any extension, renewal or amendment thereof, so long as the amount of such Bank Debt (as defined in the indenture) outstanding from time to time does not exceed an amount to be specified in a prospectus supplement relating to Senior Debt Securities;
•: liens on stock or indebtedness of entities at the time they become subsidiaries or existing upon stock or indebtedness of a subsidiary at the time of acquisition of such stock or indebtedness;
•: liens upon property of entities existing at the time they become subsidiaries;
•: liens existing on properties when acquired, or incurred to finance the purchase price or construction thereof;
•: liens to extend, renew or replace any liens referred to above, except as limited above with respect to the credit facility;
•: certain liens relating to certain permitted sale and leaseback transactions;
•: liens in favor of the Issuer or one or more subsidiaries granted by the Issuer or a subsidiary to secure any intercompany obligations;
•: mechanics', landlords' and similar liens;

•: liens arising out of legal proceedings being contested;
•: liens for taxes not yet due, or being contested;
•: easements and similar liens not materially impairing the use or value of the property involved;
•: pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation;
•: deposits to secure performance of letters of credit, bids, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;
•: any interest or title of a lessor under any lease entered into in the ordinary course of business;
•: liens on assets of any subsidiary which is required to be licensed as an insurer or reinsurer (or any subsidiary of such subsidiary) securing (a) indebtedness of such subsidiary to any other such subsidiary, (b) short-term indebtedness incurred to provide short-term liquidity to facilitate claims payments in the event of catastrophes, (c) indebtedness incurred in the ordinary course of its business or in securing insurance-related obligations (that do not constitute indebtedness) and letters of credit issued for the account of any such subsidiary in the ordinary course of its business or in securing insurance-related obligations (that do not constitute indebtedness) or (d) insurance-related obligations (that do not constitute indebtedness); and
•: liens otherwise prohibited by this covenant, securing indebtedness, if the aggregate amount of all debt then outstanding secured by such lien and all similar liens (excluding liens otherwise permitted under the indenture) does not exceed 15% of the total consolidated stockholders' equity of White Mountains.

Limitation on Sale and Leasebacks

The Issuer will not, and will not permit any subsidiary to, enter into any arrangement with any person pursuant to which the Issuer or any subsidiary leases any property that has been or is to be sold or transferred by the Issuer or the subsidiary to such person (a "sale and leaseback transaction"), except that a sale and leaseback transaction is permitted if the Issuer or such subsidiary would be entitled to secure the property to be leased (without equally and ratably securing the outstanding Senior Debt Securities) in an amount equal to the present value of the lease payments with respect to the term of the lease remaining on the date as of which the amount is being determined under the provisions described in "Limitation on Liens" above.

In addition, permitted sale and leaseback transactions not subject to the limitation above and the provisions described in "Limitations on Liens" above include:

•: leases for a term, including renewals at the option of the lessee, of not more than five years;
•: leases between the Issuer and a subsidiary or between subsidiaries; and
•: leases of property executed by the time of, or within 12 months after the latest of, the acquisition, the completion of construction or improvement, or the commencement of commercial operation of the property.

Subordinated Debt Securities

In addition to the provisions previously described in this prospectus and applicable to all Debt Securities, the following description of the Subordinated Debt Securities summarizes the general terms and provisions of its Subordinated Debt Securities to which any prospectus supplement may relate. We will describe the specific terms of the Subordinated Debt Securities offered by any prospectus supplement and

the extent, if any, to which the general provisions summarized below may apply to any series of Subordinated Debt Securities in the prospectus supplement relating to that series.

Ranking of Subordinated Debt Securities

The Subordinated Debt Securities will be subordinated in right of payment to the Issuer's other indebtedness to the extent set forth in the applicable prospectus supplement. If the Issuer of Subordinated Debt Securities is Fund American and White Mountains has guaranteed Fund American's obligations thereunder, such guarantee by White Mountains will be subordinated in right of payment to the same extent as Fund American's obligations thereunder.

The payment of the principal of, premium, if any, and interest on the Subordinated Debt Securities will be subordinated in right of payment to the prior payment in full of all of the Issuer's senior indebtedness and will rank equally with its trade creditors. The Issuer may not make payment of principal of, premium, if any, or interest on the Subordinated Debt Securities and may not acquire or make payment on account of any sinking fund for, the Subordinated Debt Securities unless full payment of amounts then due for principal, premium, if any, and interest then due on all senior indebtedness by reason of the maturity thereof has been made or duly provided for in cash or in a manner satisfactory to the holders of the senior indebtedness. Upon any distribution of assets in connection with the Issuer's dissolution, liquidation or reorganization, all senior indebtedness must be paid in full before the holders of the Subordinated Debt Securities are entitled to any payments whatsoever. As a result of these subordination provisions, in the event of the Issuer's insolvency, holders of the Subordinated Debt Securities may recover ratably less than the Issuer's senior creditors.

For purposes of the description of the Subordinated Debt Securities, the term "senior indebtedness" means the principal of and premium, if any, and interest on the following, whether outstanding on the date of execution of the Subordinated Indenture or incurred or created after the execution:

•: the Issuer's indebtedness for money borrowed by it, including purchase money obligations with an original maturity in excess of one year, or evidenced by securities, other than the Subordinated Debt Securities or Junior Subordinated Debt Securities, notes, bankers' acceptances or other corporate Debt Securities or similar instruments issued by the Issuer;
•: obligations with respect to letters of credit;
•: the Issuer's indebtedness constituting a guarantee of indebtedness of others of the type referred to in the preceding two bullet points; or
•: renewals, extensions or refundings of any of the indebtedness referred to in the preceding three bullet points unless, in the case of any particular indebtedness, renewal, extension or refunding, under the express provisions of the instrument creating or evidencing the same, or pursuant to which the same is outstanding, the indebtedness or the renewal, extension or refunding thereof is not superior in right of payment to the Subordinated Debt Securities.

DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES

Fund American may offer, from time to time, junior subordinated debt securities (the "Junior Subordinated Debt Securities"). The following description summarizes the general terms and provisions of the Junior Subordinated Debt Securities to which any prospectus supplement may relate. Fund American will describe the specific terms of the Junior Subordinated Debt Securities and the extent, if any, to which the general provisions summarized below may apply to any series of its Junior Subordinated Debt Securities in the prospectus supplement relating to that series.

Fund American may issue its Junior Subordinated Debt Securities from time to time in one or more series under a junior subordinated indenture (the "Junior Subordinated Indenture"), between Fund American, White Mountains (if a guarantor) and Bank One, National Association, as junior subordinated trustee, or another junior subordinated trustee named in a prospectus supplement (the "Junior Subordinated Trustee"). The form of Junior Subordinated Indenture is filed as an exhibit to the registration statement.

General

The Junior Subordinated Debt Securities will be unsecured, junior subordinated obligations of Fund American. The Junior Subordinated Indenture does not limit the amount of additional indebtedness Fund American or any of its subsidiaries may incur. Since Fund American is a holding company, Fund American's rights and the rights of its creditors, including the holders of Junior Subordinated Debt Securities, to participate in the assets of any subsidiary upon the latter's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors, except to the extent that Fund American may itself be a creditor with recognized claims against the subsidiary.

The Junior Subordinated Indenture does not limit the aggregate principal amount of indebtedness which may be issued thereunder and provides that Junior Subordinated Debt Securities may be issued thereunder from time to time in one or more series. The Junior Subordinated Debt Securities are issuable in one or more series pursuant to a board resolution or an indenture supplemental to the Junior Subordinated Indenture. Fund American will issue Junior Subordinated Debt Securities from time to time and offer its Junior Subordinated Debt Securities on terms determined by market conditions at the time of sale.

In the event Junior Subordinated Debt Securities are issued to any Fund American Trust or a trustee of the applicable Fund American Trust in connection with the issuance of preferred securities by the applicable Fund American Trust, the Junior Subordinated Debt Securities held by the applicable Fund American Trust subsequently may be distributed pro rata to the holders of the applicable preferred securities in connection with the dissolution of the applicable Fund American Trust upon the occurrence of the events described in the applicable prospectus supplement. Only one series of Junior Subordinated Debt Securities will be issued to each Fund American Trust or a trustee of such Fund American Trust in connection with the issuance of preferred securities by such Fund American Trust.

You should refer to the applicable prospectus supplement for the following terms of the Junior Subordinated Debt Securities offered hereby:

•: the designation, aggregate principal amount and authorized denominations of the Junior Subordinated Debt Securities;
•: the percentage of the principal amount at which Fund American will issue the Junior Subordinated Debt Securities;
•: the date or dates on which the Junior Subordinated Debt Securities will mature;
•: the annual interest rate or rates of the Junior Subordinated Debt Securities, or the method of determining the rate or rates;

•: the date or dates on which any interest will be payable, the date or dates on which payment of any interest will commence and the regular record dates for the interest payment dates;
•: the terms of any mandatory or optional redemption, including any provisions for any sinking, purchase or other similar funds or repayment options;
•: the currency, currencies or currency units for which the Junior Subordinated Debt Securities may be purchased and in which the principal, any premium and any interest may be payable;
•: the currency, currencies or currency units for which the Junior Subordinated Debt Securities may be purchased or in which the principal, any premium and any interest may be payable is at Fund American's election or the purchaser's election, the manner in which the election may be made;
•: if the amount of payments on the Junior Subordinated Debt Securities is determined by an index based on one or more currencies or currency units, or changes in the price of one or more securities or commodities, the manner in which the amounts may be determined;
•: the extent to which any of the Junior Subordinated Debt Securities will be issuable in temporary or permanent global form, or the manner in which any interest payable on a temporary or permanent global security will be paid;
•: the terms and conditions upon which the Junior Subordinated Debt Securities may be convertible into or exchanged for common shares, Preference Shares, or indebtedness or other securities of any kind;
•: information with respect to book-entry procedures, if any;
•: a discussion of the Federal income tax, accounting and other special considerations, procedures and limitations with respect to the Junior Subordinated Debt Securities; and
•: any other specific terms of the Junior Subordinated Debt Securities not inconsistent with the Junior Subordinated Indenture.

If Fund American sells any of the Junior Subordinated Debt Securities for one or more foreign currencies or foreign currency units or if the principal of, premium, if any, or interest on any series of Junior Subordinated Debt Securities will be payable in one or more foreign currencies or foreign currency units, we will describe the restrictions, elections, Federal income tax consequences, specific terms and other information with respect to the issue of Junior Subordinated Debt Securities and the currencies or currency units in the applicable prospectus supplement.

Unless specified otherwise in the prospectus supplement, the principal of, premium on, and interest on the Junior Subordinated Debt Securities will be payable, and the Junior Subordinated Debt Securities will be transferable, at the Corporate Trust Office of the Junior Subordinated Trustee in New York, New York. However, Fund American may make payment of interest at its option by check mailed on or before the payment date to the address of the person entitled to the interest payment as it appears on the registry books of Fund American or its agents.

Unless specified otherwise in the prospectus supplement, Fund American will issue the Junior Subordinated Debt Securities only in fully registered form and in denominations of $1,000 and any integral multiple of $1,000. No service charge will be made for any transfer or exchange of any Junior Subordinated Debt Securities, but Fund American may, except in specific cases not involving any transfer, require payment of a sufficient amount to cover any tax or other governmental charge payable in connection with the transfer or exchange. Unless specified otherwise in the prospectus supplement, Fund American will pay interest on outstanding Junior Subordinated Debt Securities to holders of record on the date 15 days immediately prior to the date the interest is to be paid.

Fund American rights and the rights of its creditors, including holders of Junior Subordinated Debt Securities, to participate in any distribution of assets of any of the its subsidiaries upon its liquidation or reorganization or otherwise is subject to the prior claims of creditors of the subsidiary, except to the extent

that Fund American's claims as a creditor of the subsidiary may be recognized. Fund American's operations are conducted through subsidiaries and, therefore, Fund American is dependent upon the earnings and cash flow of its subsidiaries to meet its obligations, including obligations under the Junior Subordinated Debt Securities. The Junior Subordinated Debt Securities will be effectively subordinated to all indebtedness of Fund American's subsidiaries.

White Mountains Guarantee

White Mountains may guarantee to each holder of Junior Subordinated Debt Securities issued by Fund American the due and punctual payment of the principal of, and any premium and any interest on, those Junior Subordinated Debt Securities, when and as the same becomes due and payable, whether at maturity, upon acceleration or otherwise. The related prospectus supplement will describe whether White Mountains will provide such a guarantee and if so, the terms under which such guarantee will be provided.

Global Securities

Fund American may issue Junior Subordinated Debt Securities of a series in whole or in part in the form of one or more global securities that will be deposited with or on behalf of a depositary identified in the prospectus supplement relating to that series. Fund American may issue global securities only in fully registered form and in either temporary or permanent form. Unless and until it is exchanged in whole or in part for the individual Junior Subordinated Debt Securities represented thereby, a global security may not be transferred except as a whole by the depositary for the global security to a nominee of the depositary or by a nominee of the depositary to the depositary or another nominee of the depositary or by the depositary or any nominee of the depositary to a successor or any nominee.

The specific terms of the depositary arrangement relating to a series of Junior Subordinated Debt Securities will be described in the prospectus supplement relating to that series.

Amalgamation, Consolidation, Merger, Conveyance or Transfer

The Junior Subordinated Indenture prohibits Fund American's amalgamation or consolidation with or merger into any other entity or the transfer of its properties and assets substantially as an entirety to any entity, unless:

•: the successor entity is organized and existing under the laws of the United States, any State thereof, the District of Columbia or Bermuda, and expressly assumes by a supplemental indenture the punctual payment of the principal of, premium on and interest on, all the outstanding Junior Subordinated Debt Securities and the performance of every covenant in the Junior Subordinated Indenture to be performed or observed on Fund American's part;
•: immediately after giving effect to the transaction, no event of default has happened and is continuing; and
•: Fund American or the successor entity has delivered to the Junior Subordinated Trustee an officers' certificate stating that the amalgamation, consolidation, merger, conveyance or transfer and the supplemental indenture comply with the foregoing provisions relating to the transaction.

In case of any amalgamation, consolidation, merger, conveyance or transfer with respect to Fund American or White Mountains (if White Mountains is a guarantor of Junior Subordinated Debt Securities), the successor entity will succeed to and be substituted for Fund American or White Mountains, as applicable, as obligor or guarantor, as applicable, on the Junior Subordinated Debt Securities, with the same effect as if it had been named as the obligor or the guarantor, as applicable, in the Junior Subordinated Indenture. If White Mountains is the guarantor of Junior Subordinated Debt Securities, White Mountains' violation of the conditions relating to amalgamation, consolidation, merger, conveyance or transfer stated above (as applied to White Mountains rather than Fund American), and the continuance of such violation for 90 days after notice is given to White Mountains as provided in the Junior

Subordinated Indenture, will constitute an event of default under the Junior Subordinated Indenture. Unless the prospectus supplement states otherwise, the Junior Subordinated Indenture and the Junior Subordinated Debt Securities do not contain any covenants or other provisions designed to protect holders of Junior Subordinated Debt Securities in the event of a highly leveraged transaction involving White Mountains, Fund American or any of their subsidiaries.

Events of Default; Waiver and Notice of Default; Junior Subordinated Debt Securities in Foreign Currencies

An event of default when used in the Junior Subordinated Indenture will mean any of the following as to any series of Junior Subordinated Debt Securities:

•: default for 90 days in payment of any interest on the Junior Subordinated Debt Securities;
•: default in payment of principal or any premium at maturity;
•: default in payment of any sinking or purchase fund or similar obligation;
•: default by Fund American in the performance of any other covenant or warranty contained in the Junior Subordinated Indenture for the benefit of that series which has not been remedied for a period of 90 days after notice is given;
•: with respect to any Junior Subordinated Debt Securities guaranteed by White Mountains, White Mountains' violation of the conditions relating to amalgamation and the other transactions, and the continuance of such violation, in each case as described above under "Amalgamation, Consolidation, Merger, Conveyance or Transfer"; or
•: events of Fund American's bankruptcy, insolvency and reorganization.

A default under Fund American's other indebtedness will not be a default under the Junior Subordinated Indenture and a default under one series of Junior Subordinated Debt Securities will not necessarily be a default under another series.

The Junior Subordinated Indenture provides that if an event of default described in the first five bullet points above has occurred and is continuing with respect to any series, and the event of default under the fourth or fifth bullet point is with respect to less than all series of Junior Subordinated Debt Securities then outstanding, either the Junior Subordinated Trustee or the holders of not less than 25% in aggregate principal amount of the Junior Subordinated Debt Securities of the series then outstanding, each series acting as a separate class, may declare the principal or, in the case of original issue discount securities, the portion specified in the terms thereof, of all outstanding Junior Subordinated Debt Securities of that series and the accrued interest to be due and payable immediately. The Junior Subordinated Indenture further provides that if an event of default described in the fourth, fifth or sixth bullet point above has occurred and is continuing, and the event of default under the fourth or fifth bullet point is with respect to all series of Junior Subordinated Debt Securities then outstanding, either the Junior Subordinated Debt Trustee or the holders of at least 25% in aggregate principal amount of all Junior Subordinated Debt Securities then outstanding, treated as one class, may declare the principal or, in the case of original issue discount securities, the portion specified in the terms thereof, of all Junior Subordinated Debt Securities then outstanding and the accrued interest to be due and payable immediately. However, upon certain conditions the declarations may be annulled and past defaults, except for defaults in the payment of principal of, premium on, or interest on, the Junior Subordinated Debt Securities and in compliance with certain covenants, may be waived by the holders of a majority in aggregate principal amount of the Junior Subordinated Debt Securities of that series then outstanding, subject to the consent of the holders of the preferred securities and the common securities of any Fund American Trust as required by its declaration of trust in the event that the Junior Subordinated Debt Securities are held as assets of the applicable Fund American Trust prior to a security exchange.

When used with respect to the Junior Subordinated Debt Securities that are held as trust assets of any Fund American Trust pursuant to the declaration of trust of such Fund American Trust, the term "security exchange" means the distribution of the Junior Subordinated Debt Securities held by such Fund American Trust in exchange for the preferred securities and the common securities of such Fund American Trust in dissolution of such Fund American Trust pursuant to the declaration of trust of such Fund American Trust.

Under the Junior Subordinated Indenture, the Junior Subordinated Trustee must give notice to the holders of each series of Junior Subordinated Debt Securities of all uncured defaults known to it with respect to that series within 90 days after a default occurs. The term "default" includes the events specified above without notice or grace periods. However, in the case of any default of the type described in the fourth or fifth bullet point above, no notice may be given until at least 90 days after the occurrence of the event. The Junior Subordinated Debt Trustee will be protected in withholding notice if it in good faith determines that the withholding of notice is in the interests of the holders of the Junior Subordinated Debt Securities, except in the case of default in the payment of principal of, premium on, or interest on, any of the Junior Subordinated Debt Securities, or default in the payment of any sinking or purchase fund installment or analogous obligations.

No holder of any Junior Subordinated Debt Securities of any series may institute any action under the indenture unless:

•: the holder has given the Junior Subordinated Trustee written notice of a continuing event of default with respect to that series;
•: the holders of not less than 25% in aggregate principal amount of the Junior Subordinated Debt Securities of that series then outstanding have requested the Junior Subordinated Trustee to institute proceedings in respect of the event of default;
•: the holder or holders have offered the Junior Subordinated Trustee reasonable indemnity as the Junior Subordinated Trustee may require;
•: the Junior Subordinated Trustee has failed to institute an action for 60 days after the notice, request and indemnity have been made as described above; and
•: no inconsistent direction has been given to the Junior Subordinated Trustee during the 60-day period by the holders of a majority in aggregate principal amount of Junior Subordinated Debt Securities of the series then outstanding, subject to the consent of the holders of the preferred securities and the common securities of any Fund American Trust as required by its declaration of trust in the event that the Junior Subordinated Debt Securities are held as assets of the applicable Fund American Trust prior to a security exchange.

The Junior Subordinated Indenture provides that if an event of default occurs and is continuing, the Junior Subordinated Trustee will be required to use the degree of care of a prudent person in the conduct of the person's own affairs in exercising its rights and powers under the indenture. The Junior Subordinated Indenture further provides that the Junior Subordinated Trustee will not be required to expend or risk its own funds in the performance of any of its duties under the indenture unless it has reasonable grounds for believing that repayment of the funds or adequate indemnity against the risk or liability is reasonably assured to it.

Fund American must furnish to the Junior Subordinated Trustee within 120 days after the end of each fiscal year a statement signed by one of its officers to the effect that a review of its activities during the year and of its performance under the Junior Subordinated Indenture and the terms of the Junior Subordinated Debt Securities has been made, and, to the knowledge of the signatories based on the review, Fund American has complied with all conditions and covenants of the indenture through the year or, if Fund American is in default, specifying the default.

If any Junior Subordinated Debt Securities are denominated in a currency other than that of the United States, then for the purposes of determining whether the holders of the requisite principal amount

of Junior Subordinated Debt Securities have taken any action as described in this prospectus, the principal amount of the Junior Subordinated Debt Securities will be deemed to be that amount of United States dollars that could be obtained for the principal amount on the basis of the spot rate of exchange into United States dollars for the currency in which the Junior Subordinated Debt Securities are denominated as of the date the taking of the action by the holders of the requisite principal amount is evidenced to the Junior Subordinated Trustee as provided in the Junior Subordinated Indenture.

If any Junior Subordinated Debt Securities are original issue discount securities, then for the purposes of determining whether the holders of the requisite principal amount of Junior Subordinated Debt Securities have taken any action described in this prospectus, the principal amount of the Junior Subordinated Debt Securities will be deemed to be the portion of the principal amount that would be due and payable at the time of the taking of the action upon a declaration of acceleration of maturity thereof.

Modification of the Junior Subordinated Indenture

The Junior Subordinated Indenture provides that Fund American and the Junior Subordinated Trustee may, without the consent of any holders of Junior Subordinated Debt Securities, enter into supplemental indentures for the purposes, among other things, of adding to Fund American's covenants, adding additional events of default, establishing the form or terms of any series of Junior Subordinated Debt Securities or curing ambiguities or inconsistencies in the indenture or making other provisions.

With specific exceptions, the Junior Subordinated Indenture or the rights of the holders of the Junior Subordinated Debt Securities may be modified by Fund American and the Junior Subordinated Trustee with the consent of the holders of a majority in aggregate principal amount of the Junior Subordinated Debt Securities of each series affected by the modification then outstanding, subject to the consent of the holders of the preferred securities and the common securities of the Fund American Trust as required by its declaration of trust in the event that the Junior Subordinated Debt Securities are held as assets of the Fund American Trust prior to a security exchange, but no modification may be made without the consent of the holder of each outstanding Junior Subordinated Debt Security affected, subject to the consent of the holders of the preferred securities and the common securities of any Fund American Trust as required by its declaration of trust in the event that the Junior Subordinated Debt Securities are held as assets of the applicable Fund American Trust prior to a security exchange, which would:

•: change the maturity of any payment of principal of, or any premium on, or any installment of interest on any Junior Subordinated Debt Security;
•: reduce the principal amount of or the interest or any premium on any Junior Subordinated Debt Security;
•: change the method of computing the amount of principal of or interest on any date;
•: change any place of payment where, or the currency in which, any Junior Subordinated Debt Security or any premium or interest is payable;
•: impair the right to sue for the enforcement of any payment on or after the maturity thereof or, in the case of redemption or repayment, on or after the redemption date or the repayment date;
•: reduce the percentage in principal amount of the outstanding Junior Subordinated Debt Securities of any series, the consent of the holders of which is required for any modification of, or waiver of compliance with the provisions of, the Junior Subordinated Indenture or specific defaults and their consequences provided for in the indenture; or
•: modify any of the provisions of specific sections of the Junior Subordinated Indenture, including the provisions summarized in this section, except to increase any required consent percentage or to provide that other provisions of the indenture cannot be modified or waived without the consent of the holder of each outstanding Junior Subordinated Debt Security affected thereby.

Satisfaction and Discharge of the Junior Subordinated Indenture; Defeasance

The Junior Subordinated Indenture will generally cease to be of any further effect with respect to a series of Junior Subordinated Debt Securities if Fund American delivers all Junior Subordinated Debt Securities of that series, with limited exceptions, for cancellation to the Junior Subordinated Trustee or all Junior Subordinated Debt Securities of that series not previously delivered for cancellation to the Junior Subordinated Trustee have become due and payable or will become due and payable or called for redemption within one year, and Fund American has deposited with the Junior Subordinated Trustee as trust funds the entire amount sufficient to pay at maturity or upon redemption all the Junior Subordinated Debt Securities, no default with respect to the Junior Subordinated Debt Securities has occurred and is continuing on the date of the deposit, and the deposit does not result in a breach or violation of, or default under, the Junior Subordinated Indenture or any other agreement or instrument to which Fund American is a party.

Fund American has a "legal defeasance option" under which it may terminate, with respect to the Junior Subordinated Debt Securities of a particular series, all of its obligations under the Junior Subordinated Debt Securities and the Junior Subordinated Indenture. In addition, Fund American has a "covenant defeasance option" under which it may terminate, with respect to the Junior Subordinated Debt Securities of a particular series, its obligations with respect to the Junior Subordinated Debt Securities under specified covenants contained in the Junior Subordinated Indenture. If Fund American exercises its legal defeasance option with respect to a series of Junior Subordinated Debt Securities, payment of the Junior Subordinated Debt Securities may not be accelerated because of an event of default. If Fund American exercises its covenant defeasance option with respect to a series of Junior Subordinated Debt Securities, payment of the Junior Subordinated Debt Securities may not be accelerated because of an event of default related to the specified covenants.

Fund American may exercise its legal defeasance option or its covenant defeasance option with respect to the Junior Subordinated Debt Securities of a series only if:

•: Fund American deposits in trust with the Junior Subordinated Trustee cash or debt obligations of the United States of America or its agencies or instrumentalities for the payment of principal, premium and interest with respect to the Junior Subordinated Debt Securities to maturity or redemption;
•: Fund American delivers to the Junior Subordinated Trustee a certificate from a nationally recognized firm of independent public accountants expressing their opinion that the cash or debt obligations described above on deposit with the Junior Subordinated Trustee will provide cash sufficient to pay the principal, premium, and interest when due with respect to all the Junior Subordinated Debt Securities of that series to maturity or redemption;
•: 91 days pass after the deposit is made and during the 91-day period no default described in the fifth bullet point under "—Events of Default, Waiver and Notice of Default; Junior Subordinated Debt Securities in Foreign Currencies" above with respect to Fund American occurs that is continuing at the end of the period;
•: no default has occurred and is continuing on the date of the deposit;
•: the deposit does not constitute a default under any other agreement binding on Fund American;
•: Fund American delivers to the Junior Subordinated Trustee an opinion of counsel to the effect that the trust resulting from the deposit does not constitute a regulated investment company under the Investment Company Act of 1940;
•: Fund American has delivered to the Junior Subordinated Trustee an opinion of counsel addressing specific Federal income tax matters relating to the defeasance; and

•: Fund American delivers to the Junior Subordinated Trustee an officers' certificate and an opinion of counsel stating that all conditions to the defeasance and discharge of the Junior Subordinated Debt Securities of that series have been complied with.

The Junior Subordinated Trustee will hold in trust cash or debt obligations of the United States of America or its agencies or instrumentalities deposited with it as described above and will apply the deposited cash and the proceeds from deposited debt obligations of the United States of America or its agencies or instrumentalities to the payment of principal, premium, and interest with respect to the Junior Subordinated Debt Securities of the defeased series.

Concerning the Junior Subordinated Trustee

The Junior Subordinated Trustee for the Junior Subordinated Debt Securities will be identified in the relevant prospectus supplement. In specific instances, Fund American or the holders of a majority of the then outstanding principal amount of the Junior Subordinated Debt Securities issued under an indenture may remove the Junior Subordinated Trustee and appoint a successor Junior Subordinated Trustee. The Junior Subordinated Trustee may become the owner or pledgee of any of the Junior Subordinated Debt Securities with the same rights, subject to conflict of interest restrictions, it would have if it were not the Junior Subordinated Trustee. The Junior Subordinated Trustee and any successor trustee must be a corporation organized and doing business as a commercial bank or trust company under the laws of the United States or of any state thereof, authorized under those laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to examination by Federal or state authority. Subject to applicable law relating to conflicts of interest, the Junior Subordinated Trustee may also serve as trustee under other indentures relating to Debt Securities or Junior Subordinated Debt Securities issued by White Mountains or its affiliated companies and may engage in commercial transactions with White Mountains and its affiliated companies. The initial Junior Subordinated Trustee under the Junior Subordinated Indenture is Bank One, National Association.

Certain Covenants of White Mountains and Fund American Applicable to the Junior Subordinated Debt Securities

If Junior Subordinated Debt Securities are issued to a Fund American Trust in connection with the issuance of preferred securities by the Fund American Trust, each of White Mountains (if it is a guarantor of the Junior Subordinated Debt Securities) and Fund American covenants in the Junior Subordinated Indenture that, so long as the preferred securities of the Fund American Trust remain outstanding, it will not declare or pay any dividends on, or redeem, purchase, acquire or make a distribution or liquidation payment with respect to, any shares of its common stock or preferred stock if at the time:

•: an event of default with respect to the Junior Subordinated Debt Securities has occurred;
•: White Mountains is in default with respect to its payment of any obligations under its guarantee of the preferred securities of the Fund American Trust; or
•: Fund American has given notice of its election to defer payments of interest on the Junior Subordinated Debt Securities by extending the interest payment period as provided in the terms of the Junior Subordinated Debt Securities and the period, or any extension thereof, is continuing.

However, the foregoing restrictions will not apply to:

•: dividends, distributions, redemptions, purchases, acquisitions or payments made with capital stock;
•: any declaration or payment of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto;
•: payments of accrued dividends on preferred stock upon the redemption, exchange or conversion of any preferred stock as may be outstanding from time to time;

•: the purchase of fractional interests in shares of preferred stock upon the redemption, exchange or conversion of such preferred stock;
•: purchases or acquisitions of shares of common stock in connection with the satisfaction of obligations under any employee benefit plan or other contractual obligation; or
•: dividends, distributions, redemptions, purchases, acquisitions or payments as a result of a reclassification of capital stock or the exchange or conversion of one class or series capital stock for another class or series of capital stock.

In addition, if Junior Subordinated Debt Securities are issued to a Fund American Trust in connection with the issuance of preferred securities of the Fund American Trust, for so long as the preferred securities of the Fund American Trust remain outstanding, Fund American has agreed:

•: to maintain directly, or indirectly through a wholly owned subsidiary, 100% ownership of the common securities of such Fund American Trust, provided, however, that any permitted successor of Fund American under the Junior Subordinated Indenture may succeed to Fund American's ownership of such common securities;
•: not to voluntarily terminate, windup or liquidate such Fund American Trust, except in connection with a distribution of Junior Subordinated Debt Securities to the holders of the preferred securities in liquidation of such Fund American Trust or in connection with certain mergers, consolidations or amalgamations permitted by the declaration of trust of such Fund American Trust; and
•: to use its reasonable best efforts, consistent with the terms and provisions of the declaration of trust of such Fund American Trust, to cause such Fund American Trust to remain classified as a grantor trust and not as an association taxable as a corporation for United States Federal income tax purposes.

Subordination of the Junior Subordinated Debt Securities

The Junior Subordinated Debt Securities will be subordinated and junior in right of payment to Fund American's other indebtedness to the extent set forth in the applicable prospectus supplement.

The payment of the principal of, premium, if any, and interest on the Junior Subordinated Debt Securities will be subordinated in right of payment to the prior payment in full of all of Fund American's senior indebtedness and will rank equally with its trade creditors. No payment on account of principal of, premium, if any, or interest on the Junior Subordinated Debt Securities and no acquisition of, or payment on account of any sinking fund for, the Junior Subordinated Debt Securities may be made unless full payment of amounts then due for principal, premium, if any, and interest then due on all senior indebtedness by reason of the maturity thereof, by lapse of time, acceleration or otherwise, has been made or duly provided for in cash or in a manner satisfactory to the holders of the senior indebtedness. In addition, the Junior Subordinated Indenture provides that if a default has occurred giving the holders of the senior indebtedness the right to accelerate the maturity thereof, or an event has occurred which, with the giving of notice, or lapse of time, or both, would constitute an event of default, then unless and until that event has been cured or waived or has ceased to exist, no payment on account of principal, premium, if any, or interest on the Junior Subordinated Debt Securities and no acquisition of, or payment on account of a sinking fund for, the Junior Subordinated Debt Securities may be made. Fund American will give prompt written notice to the Junior Subordinated Trustee of any default under any senior indebtedness or under any agreement pursuant to which senior indebtedness may have been issued. Upon any distribution of Fund American's assets in connection with its dissolution, liquidation or reorganization, all senior indebtedness must be paid in full before the holders of the Junior Subordinated Debt Securities are entitled to any payments whatsoever. As a result of these subordination provisions, in the event of Fund American's insolvency, holders of the Junior Subordinated Debt Securities may recover ratably less than Fund American's senior creditors.

Subordination of White Mountains' Guarantee of the Junior Subordinated Debt Securities

If White Mountains guarantees the Junior Subordinated Debt Securities, such guarantee will be subordinated and junior in right of payment to White Mountains' other indebtedness to the extent set forth in the applicable prospectus supplement.

If White Mountains guarantees the Junior Subordinated Debt Securities, the payment of the principal of, premium, if any, and interest on the Junior Subordinated Debt Securities will be subordinated in right of payment to the prior payment in full of all of White Mountains' senior indebtedness and will rank equally with its trade creditors. No payment on account of principal of, premium, if any, or interest on the Junior Subordinated Debt Securities and no acquisition of, or payment on account of any sinking fund for, the Junior Subordinated Debt Securities may be made unless full payment of amounts then due for principal, premium, if any, and interest then due on all senior indebtedness by reason of the maturity thereof, by lapse of time, acceleration or otherwise, has been made or duly provided for in cash or in a manner satisfactory to the holders of the senior indebtedness. In addition, the Junior Subordinated Indenture provides that if a default has occurred giving the holders of the senior indebtedness the right to accelerate the maturity thereof, or an event has occurred which, with the giving of notice, or lapse of time, or both, would constitute an event of default, then unless and until that event has been cured or waived or has ceased to exist, no payment on account of principal, premium, if any, or interest on the Junior Subordinated Debt Securities and no acquisition of, or payment on account of a sinking fund for, the Junior Subordinated Debt Securities may be made. If White Mountains guarantees the Junior Subordinated Debt Securities, it will give prompt written notice to the Junior Subordinated Trustee of any default under any senior indebtedness or under any agreement pursuant to which senior indebtedness may have been issued. Upon any distribution of White Mountains' assets in connection with its dissolution, liquidation or reorganization, all senior indebtedness must be paid in full before the holders of the Junior Subordinated Debt Securities are entitled to any payments whatsoever. As a result of these subordination provisions, in the event of White Mountains' insolvency, holders of the Junior Subordinated Debt Securities may recover ratably less than White Mountains' senior creditors.

For purposes of the description of the Junior Subordinated Debt Securities, the term senior indebtedness with respect to Fund American or White Mountains (where White Mountains is a guarantor of Junior Subordinated Debt Securities), as applicable, means the principal of and premium, if any, and interest on the following, whether outstanding on the date of execution of the Junior Subordinated Indenture or incurred or created after the execution:

•: indebtedness for money borrowed including purchase money obligations with an original maturity in excess of one year, or evidenced by securities, notes, bankers' acceptances or other corporate Debt Securities or similar instruments other than the Junior Subordinated Debt Securities;
•: obligations with respect to letters of credit;
•: indebtedness constituting a guarantee of indebtedness of others of the type referred to in the preceding two bullet points; or
•: renewals, extensions or refundings of any of the indebtedness referred to in the preceding three bullet points unless, in the case of any particular indebtedness, renewal, extension or refunding, under the express provisions of the instrument creating or evidencing the same, or pursuant to which the same is outstanding, the indebtedness or the renewal, extension or refunding thereof is not superior in right of payment to the Junior Subordinated Debt Securities.

DESCRIPTION OF TRUST PREFERRED SECURITIES

Each Fund American Trust may issue, from time to time, only one series of preferred securities having terms described in the prospectus supplement relating thereto. The declaration of trust and amended and restated declaration of trust under which each Fund American Trust is formed will be replaced by a further amended and restated declaration of trust, which will authorize the regular trustees of the Fund American Trust to issue on behalf of the Fund American Trust one series of preferred securities. Each further amended and restated declaration of trust will be qualified as an indenture under the Trust Indenture Act. The preferred securities will have terms, including distributions, redemption, voting, liquidation rights and other preferred, deferred or other special rights or restrictions as will be set forth in the related amended and restated declaration of trust or made part of the declaration by the Trust Indenture Act. Reference is made to any prospectus supplement relating to the preferred securities of any Fund American Trust for specific terms, including:

•: the specific designation of the preferred securities;
•: the number of preferred securities issued by the Fund American Trust;
•: the annual distribution rate, or method of calculation of the rate, for preferred securities issued by the Fund American Trust, the date or dates upon which the distributions will be payable and the record date or dates for the payment of the distributions;
•: whether distributions on preferred securities issued by the Fund American Trust will be cumulative, and, in the case of preferred securities having cumulative distribution rights, the date or dates or method of determining the date or dates from which distributions on preferred securities issued by the Fund American Trust will be cumulative;
•: the amount or amounts which will be paid out of the assets of the Fund American Trust to the holders of preferred securities of the Fund American Trust upon voluntary or involuntary liquidation, dissolution, winding-up or termination of the Fund American Trust;
•: the obligation or right, if any, of the Fund American Trust to purchase or redeem preferred securities issued by the Fund American Trust and the price or prices at which, the period or periods within which and the terms and conditions upon which preferred securities issued by the Fund American Trust will or may be purchased or redeemed, in whole or in part, pursuant to an obligation or right;
•: the voting rights, if any, of preferred securities issued by the Fund American Trust in addition to those required by law, including the number of votes per preferred security and any requirement for the approval by the holders of preferred securities, or of preferred securities issued by one or more Fund American Trusts, or of both, as a condition to specified actions or amendments to the declaration of the Fund American Trust;
•: the terms and conditions upon which the preferred securities may be convertible into or exchanged for common shares, Preference Shares, Debt Securities, Junior Subordinated Debt Securities, or indebtedness or other securities of any kind of White Mountains or Fund American; and
•: any other relevant rights, preferences, privileges, limitations or restrictions of preferred securities issued by the Fund American Trust consistent with the declaration of the Fund American Trust or with applicable law.

White Mountains and/or Fund American may guarantee the preferred securities offered by each Fund American Trust. If White Mountains or Fund American does guarantee preferred securities, this will be disclosed in the related prospectus supplement and the terms of such guarantee will generally be on the terms set forth below under "Description of Trust Preferred Securities Guarantees". Federal income tax considerations applicable to any offering of preferred securities will be described in the applicable prospectus supplement.

In connection with any issuance of preferred securities, the applicable Fund American Trust will issue one series of common securities. The amended and restated declaration of the applicable Fund American

Trust will authorize the regular trustees of the Fund American Trust to issue one series of common securities having terms including distributions, redemption, voting, liquidation rights or restrictions as set forth in the amended and restated declaration. The terms of the common securities issued by the Fund American Trust will be substantially identical to the terms of the preferred securities issued by the Fund American Trust. The common securities will rank equally with the preferred securities and payments on the common securities will be made on a pro rata basis with the preferred securities. However, if an event of default under the applicable amended and restated declaration of trust occurs and is continuing, the rights of the holders of the common securities to payment in respect of distributions and payments upon liquidation, redemption and maturity will be subordinated to the rights of the holders of the preferred securities. Generally, the common securities issued by a Fund American Trust will also carry the right to vote and to appoint, remove or replace any of the trustees of the Fund American Trust. All the common securities of a Fund American Trust will be owned by Fund American or its subsidiary.

As long as payments of interest and other payments are made when due on the Junior Subordinated Debt Securities, the payments will be sufficient to cover distributions and other payments due on the preferred securities primarily because the aggregate principal amount of Junior Subordinated Debt Securities held as trust assets will be equal to the sum of the aggregate stated liquidation amount of the preferred securities, and the interest rate and interest and other payment dates on the Junior Subordinated Debt Securities will match the distribution rate and distribution and other payment dates for the preferred securities.

If an event of default with respect to the amended and restated declaration of any Fund American Trust occurs and is continuing, then the holders of preferred securities of the Fund American Trust would rely on the enforcement by the property trustee (the "Property Trustee") of its rights as a holder of the Junior Subordinated Debt Securities deposited in the Fund American Trust against Fund American. In addition, the holders of a majority in liquidation amount of the preferred securities will have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Property Trustee or to direct the exercise of any power conferred upon the Property Trustee under the amended and restated declaration of trust, including the right to direct the Property Trustee to exercise the remedies available to it as a holder of the Junior Subordinated Debt Securities. If the Property Trustee fails to enforce its rights under the Junior Subordinated Debt Securities deposited in the Fund American Trust, any holder of the preferred securities may, to the extent permitted by applicable law, after a period of 60 days has elapsed from the holder's written request, institute a legal proceeding against Fund American and White Mountains to enforce the Property Trustee's rights under the Junior Subordinated Debt Securities without first instituting any legal proceeding against the Property Trustee or any other person or entity. If an event of default with respect to the amended and restated declaration of the Fund American Trust occurs and is continuing and the event is attributable to the failure of Fund American to pay interest or principal on the Junior Subordinated Debt Securities on the date the interest or principal is otherwise payable, or in the case of redemption, on the redemption date, then a holder of preferred securities of the Fund American Trust may also directly institute a proceeding for enforcement of payment to the holder of the principal of or interest on the Junior Subordinated Debt Securities having a principal amount equal to the aggregate liquidation amount of the preferred securities held by the holder on or after the respective due date specified in the Junior Subordinated Debt Securities without first directing the Property Trustee to enforce the terms of the Junior Subordinated Debt Securities or instituting a legal proceeding against Fund American and White Mountains to enforce the Property Trustee's rights under the Junior Subordinated Debt Securities. In connection with a direct action, the rights of Fund American or White Mountains, as applicable, will be substituted for the rights of the holder of the preferred securities under the amended and restated declaration of trust to the extent of any payment made by Fund American or White Mountains, as applicable, to the holder of the preferred securities in a direct action. The holders of preferred securities of the Fund American Trust will not be able to exercise directly any other remedy available to the holders of the Junior Subordinated Debt Securities unless the Property Trustee first fails to do so.

Federal income tax considerations applicable to an investment in preferred securities will be described in the prospectus supplement relating thereto.

The Property Trustee and its affiliates may provide customary commercial banking services to White Mountains and its subsidiaries and participate in various financing agreements of White Mountains in the ordinary course of their business. Initially, the Property Trustee is Bank One, National Association.

DESCRIPTION OF TRUST PREFERRED SECURITIES GUARANTEES

Set forth below is a summary of information concerning the guarantees (the "Guarantees") that may be executed and delivered from time to time by White Mountains or Fund American for the benefit of the holders of preferred securities of the Fund American Trust. The terms of a guarantee provided by Fund American will be substantially similar to the terms of a guarantee provided by White Mountains as set forth below. The related prospectus supplement will disclose whether White Mountains or Fund American will guarantee the preferred securities. If either White Mountains or Fund American is a guarantor, each Guarantee will be separately qualified under the Trust Indenture Act and will be held by Bank One, National Association, acting in its capacity as guarantee trustee (the "Guarantee Trustee") with respect to the guarantee, for the benefit of holders of the preferred securities of the applicable Fund American Trust. The terms of each Guarantee will be set forth in the Guarantee or made part of the Guarantee by the Trust Indenture Act. If neither White Mountains nor Fund American will guarantee the preferred securities, this will be disclosed in the applicable prospectus supplement and the information described below may not be applicable to the preferred securities.

General

If White Mountains is a guarantor of the preferred securities, White Mountains will irrevocably and unconditionally agree, to the extent set forth in the guarantee, to pay in full, to the holders of the preferred securities issued by the applicable Fund American Trust, the guarantee payments, to the extent not paid by the Fund American Trust, regardless of any defense, right of set-off or counterclaim that the Fund American Trust may have or assert. The following distributions and other payments with respect to preferred securities issued by a Fund American Trust to the extent not made or paid by the Fund American Trust, will be subject to the Guarantee without duplication:

•

any accrued and unpaid distributions on the preferred securities, but only to the extent that in each case Fund American has made a payment to the Property Trustee of interest on the Junior Subordinated Debt Securities;

•

the redemption price, including all accrued and unpaid distributions to the date of redemption, with respect to any preferred securities called for redemption by the Fund American Trust, but only to the extent that in each case Fund American has made a payment to the Property Trustee of interest or principal on the Junior Subordinated Debt Securities deposited in the Fund American Trust as trust assets; and

•

upon a voluntary or involuntary liquidation, dissolution, winding-up or termination of the Fund American Trust, other than in connection with the distribution of related Junior Subordinated Debt Securities to the holders of the preferred securities or the redemption of all

the preferred securities upon the maturity or redemption of the Junior Subordinated Debt Securities, the lesser of:

(1): the aggregate of the liquidation amount and all accrued and unpaid distributions on the preferred securities to the date of payment, to the extent the Fund American Trust has funds available, and
(2): the amount of assets of the Fund American Trust remaining available for distribution to holders of the preferred securities upon liquidation of the Fund American Trust.

White Mountains' obligation to make a guarantee payment may be satisfied by direct payment of the required amounts by White Mountains to the holders of the applicable preferred securities or by causing the applicable Fund American Trust to pay the amounts to the holders.

The Guarantee is a full and unconditional guarantee from the time of issuance of the applicable preferred securities, but the Guarantee covers distributions and other payments on the preferred securities only if and to the extent that Fund American has made a payment to the Property Trustee of interest or principal on the Junior Subordinated Debt Securities deposited in the applicable Fund American Trust as trust assets. If Fund American does not make interest or principal payments on the Junior Subordinated Debt Securities deposited in the applicable Fund American Trust as trust assets, the Property Trustee will not make distributions on the preferred securities of the Fund American Trust and the Fund American Trust will not have the necessary funds available to make these payments.

Fund American's obligations under the declaration for each Fund American Trust, the Guarantee issued with respect to preferred securities issued by the Fund American Trust, the Junior Subordinated Debt Securities purchased by the Fund American Trust, the Junior Subordinated Indenture and the Guarantee issued with respect to the Junior Subordinated Debt Securities in the aggregate will provide a full, irrevocable and unconditional guarantee on a subordinated basis by White Mountains of payments due on the preferred securities issued by the Fund American Trust. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes such guarantee. It is only the combined operation of these documents that has the effect of providing a full, irrevocable and unconditional guarantee of the trust's obligations under the preferred securities.

Certain Covenants of White Mountains

In each Guarantee, White Mountains will covenant that, so long as any preferred securities issued by the applicable Fund American Trust remain outstanding, White Mountains will not declare or pay any dividends on, or redeem, purchase, acquire or make a distribution with respect to, any of its Common Shares or Preferred Shares, if at the time:

•: White Mountains will be in default with respect to its guarantee payments or other payment obligations under the Guarantee;
•: any event of default under the related amended and restated declaration of trust has occurred; or
•: Fund American has given notice of its election to defer payments of interest on the Junior Subordinated Debt Securities by extending the interest payment period as provided in the terms of the Junior Subordinated Debt Securities and the period, or any extension thereof, is continuing.

However, the foregoing restrictions will not apply to:

•: dividends, distributions, redemptions, purchases, acquisitions or payments made with its share capital;
•: any declaration or payment of a dividend in connection with the implementation of a shareholders' rights plan, or the issuance of shares under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto;
•: payments of accrued dividends on Preference Shares upon the redemption, exchange or conversion of any Preference Shares as may be outstanding from time to time;
•: the purchase of fractional interests in Preference Shares upon the redemption, exchange or conversion of such Preference Shares;
•: purchases or acquisitions of Common Shares in connection with the satisfaction of obligations under any employee benefit plan or other contractual obligation; or
•: dividends, distributions, redemptions, purchases, acquisitions or payments as a result of a reclassification of shares or the exchange or conversion of one class or series of shares for another class or series of shares.

Amendments and Assignment

Except with respect to any changes that do not adversely affect the rights of holders of the applicable preferred securities, in which case no consent will be required, each Guarantee may be amended only with

the prior approval of the holders of not less than 66²/3% in liquidation amount of the outstanding preferred securities issued by the applicable Fund American Trust. The manner of obtaining any such approval of holders of the preferred securities will be set forth in an accompanying prospectus supplement. All guarantees and agreements contained in a Guarantee will bind the successors, assignees, receivers, trustees and representatives of White Mountains and will inure to the benefit of the holders of the preferred securities of the applicable Fund American Trust then outstanding. Except in connection with a consolidation, merger, conveyance, or transfer of assets involving White Mountains that is permitted under the Junior Subordinated Indenture, White Mountains may not assign its obligations under any Guarantee.

Termination of the Guarantees

Each Guarantee will terminate and be of no further force and effect as to the preferred securities issued by the Fund American Trust upon full payment of the redemption price of all preferred securities of the Fund American Trust, or upon distribution of the Junior Subordinated Debt Securities to the holders of the preferred securities of the Fund American Trust in exchange for all the preferred securities issued by the Fund American Trust, or upon full payment of the amounts payable upon liquidation of the Fund American Trust. Nevertheless, each Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of preferred securities issued by the Fund American Trust must restore payment of any sums paid under the preferred securities or the Guarantee.

Status of the Guarantees

White Mountains' obligations to make the guarantee payments to the extent set forth in the applicable Guarantee will constitute an unsecured obligation of White Mountains and will rank subordinate and junior in right of payment to all other indebtedness, liabilities and obligations of White Mountains and any guarantees, endorsements or other contingent obligations of White Mountains, except those made on an equal basis or subordinate by their terms, and senior to all share capital issued by White Mountains and to any guarantee entered into by White Mountains in respect of any of its share capital. White Mountains' obligations under each Guarantee will rank equally with each other Guarantee. Because White Mountains is a holding company, White Mountains' obligations under each Guarantee are also effectively subordinated to all existing and future liabilities, including trade payables, of White Mountains' subsidiaries, except to the extent that White Mountains is a creditor of the subsidiaries recognized as such. Each amended and restated declaration of trust will provide that each holder of preferred securities issued by the applicable Fund American Trust, by acceptance thereof, agrees to the subordination provisions and other terms of the related Guarantee.

The guaranteed party may institute a legal proceeding directly against White Mountains to enforce its rights under a Guarantee without first instituting a legal proceeding against any other person or entity. Each Guarantee will be deposited with the Guarantee Trustee, to be held for the benefit of the holders of the preferred securities issued by the Fund American Trust. The Guarantee Trustee will enforce the Guarantee on behalf of the holders of the preferred securities. The holders of not less than a majority in aggregate liquidation amount of the preferred securities issued by the Fund American Trust have the right to direct the time, method and place of conducting any proceeding for any remedy available in respect of the related Guarantee, including the giving of directions to the Guarantee Trustee. If the Guarantee Trustee fails to enforce a Guarantee as above provided, any holder of preferred securities issued by the Fund American Trust may institute a legal proceeding directly against White Mountains to enforce its rights under the Guarantee, without first instituting a legal proceeding against the Fund American Trust, or any other person or entity. However, if White Mountains has failed to make a guarantee payment, a holder of preferred securities may directly institute a proceeding against White Mountains for enforcement of the holder's right to receive payment under the Guarantee. White Mountains waives any right or remedy to require that any action be brought first against the Fund American Trust or any other person or entity before proceeding directly against White Mountains.

Miscellaneous

White Mountains will be required to provide annually to the Guarantee Trustee a statement as to the performance by White Mountains of its obligations under each Guarantee and as to any default in the performance. White Mountains is required to file annually with the Guarantee Trustee an officer's certificate as to White Mountains' compliance with all conditions to be complied with by it under each Guarantee.

The Guarantee Trustee, prior to the occurrence of a default, undertakes to perform only those duties as are specifically set forth in the applicable Guarantee and, after default with respect to a Guarantee, will exercise the same degree of care as a prudent individual would exercise under the circumstances in the conduct of his or her own affairs. Subject to that provision, the Guarantee Trustee is under no obligation to exercise any of the powers vested in it by a Guarantee at the request of any holder of preferred securities unless it is offered reasonable security and indemnity against the costs, expenses and liabilities that might be incurred thereby.

PLAN OF DISTRIBUTION

Each issuer may sell the securities being offered hereby in any one or more of the following ways:

•: directly to investors;
•: to investors through agents;
•: to broker-dealers as principals;
•: through underwriting syndicates led by one or more managing underwriters as such issuer may select from time to time; or
•: through one or more underwriters acting alone.

Unless otherwise agreed by White Mountains, a Selling Shareholder may only sell common shares through underwriting syndicates led by one or more managing underwriters, as White Mountains may select from time to time.

If an underwriter or underwriters are utilized in the sale, the specific managing underwriter or underwriters with respect to the offer and sale of the offered securities are set forth on the cover of the prospectus supplement relating to such offered securities and the members of the underwriting syndicate, if any, are named in the prospectus supplement.

Sales of the offered securities by underwriters may be in negotiated transactions, at a fixed offering price or at various prices determined at the time of sale. The prospectus supplement describes the method of reoffering by the underwriters. The prospectus supplement also describes the discounts and commissions to be allowed or paid to the underwriters, if any, all other items constituting underwriting compensation, the discounts and commissions to be allowed or paid to dealers, if any, and the exchanges, if any, on which the securities offered thereby will be listed.

Each issuer may authorize underwriters to solicit offers by certain institutions to purchase securities at the price set forth in the prospectus supplement pursuant to Delayed Delivery Contracts providing for payment and delivery at a future date.

If any securities are sold pursuant to an Underwriting Agreement, the several underwriters will ordinarily agree, subject to the terms and conditions set forth therein to purchase all the securities offered by the accompanying prospectus supplement if any of such securities are purchased. In the event of default by any underwriter, in certain circumstances, the purchase commitments may be increased or the Underwriting Agreement may be terminated.

Offers to purchase securities may be solicited directly by either of the issuers or by agents designated by either issuer from time to time. Any such agent, who may be deemed to be an underwriter as the term is defined in the Securities Act of 1933 (the "Act"), involved in the offer or sale of the offered securities in respect of which this prospectus is delivered will be named, and any commissions payable by either of the issuers to such agent set forth, in a prospectus supplement. Any such agent will ordinarily be acting on a best efforts basis.

If a broker-dealer is utilized in the sale of the offered securities in respect of which this prospectus is delivered, the issuers will sell such offered securities to the dealer, as principal. The dealer may then resell such offered securities to the public at varying prices to be determined by such dealer at the time of resale.

Agents, broker-dealers or underwriters may be entitled under agreements which may be entered into with an issuer to indemnification or contribution by that issuer in respect of certain civil liabilities, including liabilities under the Act, and may be customers of, engage in transactions with or perform services for that issuer in the ordinary course of business.

The place and time of delivery for the offered securities in respect of which this prospectus is delivered are set forth in the accompanying prospectus supplement.

The offered securities may or may not be listed on a national securities exchange or a foreign securities exchange. The securities may not have an established trading market. No assurances can be given that there will be a market for the offered securities.

LEGAL MATTERS

Certain legal matters with respect to United States, Delaware General Corporation Law and New York law will be passed upon for us by Cravath, Swaine & Moore LLP, New York, New York. Mr. George J. Gillespie, III, a director of White Mountains, is a partner at Cravath, Swaine & Moore LLP. The validity of the preferred securities of the Fund American Trusts under Delaware law will be passed upon for us by Richards, Layton & Finger P.A., Wilmington, Delaware. Certain legal matters with respect to Bermuda law will be passed upon for us by Conyers Dill & Pearman, Hamilton, Bermuda. Certain legal matters will be passed upon for the underwriters or agents, if any, by counsel to be named in the prospectus supplement.

EXPERTS

The consolidated financial statements and the related financial statement schedules of White Mountains Insurance Group, Ltd. and consolidated subsidiaries included in our Annual Report on Form 10-K/A as of December 31, 2002 and December 31, 2001 and for each of the three years in the period ended December 31, 2002 and the consolidated financial statements of CGU Corporation as of December 31, 2000 and 1999 and for each of the three years in the period ended December 31, 2000 have been audited by PricewaterhouseCoopers LLP, independent auditors. The combined financial statements of Montpelier Re Holdings Ltd. included in our Annual Report on Form 10-K/A as of December 31, 2002 and December 31, 2001 and for the year ended December 31, 2002 and the period from November 14, 2001 (date of incorporation) to December 31, 2001 have been audited by PricewaterhouseCoopers, independent auditors. The financial statements referred to above and the related reports of PricewaterhouseCoopers LLP and PricewaterhouseCoopers on such financial statements are incorporated by reference in this prospectus in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

White Mountains files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at the SEC's public reference room at the following location:

Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549

Please call the SEC at 1-800-SEC-0330 for further information on the operations of the public reference room. Our SEC filings are also available to the public at the SEC's web site at http://www.sec.gov and at the public reference room of the New York Stock Exchange, 20 Broad Street, New York, New York. You may also obtain more information by visiting our web site at http://www.whitemountains.com. The information on our web site is not part of this prospectus.

Some documents we have filed or will file with the SEC, including all documents we file pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this prospectus and prior to the completion of this offering, are incorporated by reference into this prospectus. The information contained in those documents is considered to be part of this prospectus, except that the information contained in

later-dated documents will supplement, modify or supersede, as applicable, the information contained in earlier-dated documents.

The information in the following documents that we have filed or will file with the SEC is incorporated by reference into this prospectus:

•: Our Annual Report on Form 10-K/A for the year ended December 31, 2002;
•: Our Quarterly Report on Form 10-Q/A for the period ended March 31, 2003;
•: Our Current Reports on Form 8-K dated May 5, 2003 (filed May 14, 2003) and April 10, 2003 (filed April 10, 2003) and Form 8-K/A dated June 1, 2001 (filed May 13, 2003) and November 1, 2001 (filed March 27, 2003);
•: Our definitive Proxy Statement for our 2003 Annual Meeting on Schedule 14A filed April 7, 2003;
•: Our Registration Statement on Form S-3 (Registration No. 333-73012) (filed with the SEC on November 8, 2001);
•: The description of our common shares in Form 8-A filed December 16, 1999; and
•: All documents to be filed by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this prospectus and prior to the termination of all offerings hereunder.

The statements contained in this prospectus regarding the provisions of any other document are not necessarily complete. Accordingly, each of these statements is qualified in its entirety by reference to the copy of that document filed with the SEC.

You may obtain without charge a copy of any of the documents incorporated by reference into this prospectus, except for any exhibits to those documents that are not expressly incorporated by reference, from us. Any request for those documents should be directed to our Corporate Secretary at one of the following addresses or telephone numbers:

28 Gates Street White River Junction, Vermont 05001-7066 (802) 295-4500		Suite 224 12 Church Street Hamilton HM 11, Bermuda (Bermuda mailing address)
		Crawford House 23 Church Street Hamilton HM 11, Bermuda (Bermuda street address)
		(441) 296-6011

ENFORCEMENT OF JUDGMENTS AND OTHER MATTERS

White Mountains is organized under the laws of Bermuda. In addition, one of our directors, Mark Byrne, is a resident of Bermuda. A portion of our and his assets are located outside of the United States. Less than 3% of our total assets is located outside the United States. It may be difficult for you to effect service of process within the United States on Mr. Byrne or to recover against him on judgments of U.S. courts predicated upon civil liabilities under the U.S. Federal securities laws.

We have been advised by our Bermuda counsel, Conyers Dill & Pearman, that a judgment for the payment of money rendered by a court in the United States based on civil liability would not be automatically enforceable in Bermuda. We also have been advised by Conyers Dill & Pearman that a Bermuda court would be likely to enforce a final and conclusive judgment obtained in a court in the

United States under which a sum of money is payable (other than a sum of money payable in respect of multiple damages), taxes or other charges of a similar nature or in respect of a fine or other penalty, provided that:

•: the U.S. court had proper jurisdiction over the parties subject to such judgment,
•: the U.S. court did not contravene the rules of natural justice of Bermuda,
•: the judgment of the U.S. court was not obtained by fraud,
•: the enforcement of the judgment would not be contrary to the public policy of Bermuda,
•: no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of Bermuda and
•: there is due compliance with the correct procedures under the laws of Bermuda.

We also have been advised by Conyers Dill & Pearman that a Bermuda court may impose civil liability on White Mountains or its directors or officers in a suit brought in the Supreme Court of Bermuda against White Mountains or its directors or officers based on a violation of U.S. federal securities laws, provided that the facts surrounding the violation would constitute or give rise to a cause of action under Bermuda law. Some remedies available under the laws of United States jurisdictions, including some remedies available under the U.S. federal securities laws, may not be allowed in Bermuda courts as contrary to Bermuda public policy.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

The following table sets forth the estimated expenses in connection with the issuance and distribution of the securities being registered, other than underwriting discounts and commissions:

Securities and Exchange Commission Registration Fee		$	111,488
Trustees Fees and Expenses			25,000
Printing			100,000
Accounting Fees			150,000
Legal Fees			450,000
Rating Agency Fees			200,000
Miscellaneous			100,000

	Total(1)	$	1,136,488

(1): All amounts except the SEC filing fee are estimated. White Mountains and/or Fund American will pay all expenses.

Item 15. Indemnification of Officers and Directors.

White Mountains Insurance Group, Ltd.

Bye-law 33 of the Bye-laws of White Mountains states:

"(1) The Company shall indemnify its officers and directors to the fullest extent possible except as prohibited by the Act. Without limiting the foregoing, the Directors, Secretary and other Officers (such term to include, for the purposes of this Bye-law, any Alternate Director or any person appointed to any committee by the Board or any person who is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (including, without limitation, any employee benefit plan)) and every one of them, and their heirs, executors and administrators, shall be indemnified and secured harmless out of the assets of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their heirs, executors or administrators, shall or may incur or sustain by or by reason of any act done, concurred in or omitted (actual or alleged) in or about the execution of their duty, or supposed duty, or in their respective offices or trusts, and none of them shall be answerable for the acts, receipts, neglects or defaults of the others of them or for joining in any receipts for the sake of conformity, or for any bankers or other persons with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody, or for insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out on or invested, or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts, or in relation thereto, provided that this indemnity shall not extend to any matter in respect of which such person is, or may be, found guilty of fraud or dishonesty.

(2) The Company may purchase and maintain insurance to protect itself and any Director, Officer or other person entitled to indemnification pursuant to this Bye-law to the fullest extent permitted by law.

(3) All reasonable expenses incurred by or on behalf of any person entitled to indemnification pursuant to Bye-law 33(1) in connection with any proceeding shall be advanced to such person by the Company within twenty (20) business days after the receipt by the Company of a statement or

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statements from such person requesting such advance or advances from time to time, whether prior to or after final disposition of such proceeding. Such statement or statements shall reasonably evidence the expenses incurred by such person and, if required by law or requested by the Company at the time of such advance, shall include or be accompanied by an undertaking by or on behalf of such person to repay the amounts advanced if it should ultimately be determined that such person is not entitled to be indemnified against such expenses pursuant to this Bye-law.

(4) The right of indemnification and advancement of expenses provided in this Bye-law shall not be exclusive of any other rights to which those seeking indemnification may otherwise be entitled, and the provisions of this Bye-law shall inure to the benefit of the heirs and legal representatives of any person entitled to indemnity under this Bye-law and shall be applicable to proceedings commenced or continuing after the adoption of this Bye-law, whether arising from acts or omissions occurring before or after such adoption. Any repeal or modification of the foregoing provisions of this section shall not adversely affect any right or protection existing at the time of such repeal or modification".

Reference is made to Section 98 of the Bermuda Companies Act of 1981 (the "Act"). The Act provides that a company may, in its bye-laws or in any contract or arrangement between the company and any officer or person employed as an auditor, exempt such officer or person from, or indemnify him in respect of, any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the officer or person may be guilty in relation to the company or any subsidiary thereof.

The Act further provides that any provision, whether contained in the bye-laws of a company or in any contract or arrangement between the company and any officer or person employed as an auditor, exempting such officer or person from or indemnifying him against any liability which by virtue of any rule of law would otherwise attach to him in respect of any fraud or dishonesty of which he may be guilty in relation to the company shall be void; provided, however, that

(a): nothing in Section 98 of the Act shall operate to deprive any person of any exemption or right to be indemnified in respect of anything done or omitted to be done while any such provision was in force; and
(b): notwithstanding anything in Section 98 of the Act, a company may, in pursuance of any such provision as aforesaid, indemnify any such officer or auditor against any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favor or in which he is acquitted or when relief is granted to him by the Supreme Court under Section 281 of the Act.

Fund American Companies, Inc.

Section 145(a) of the Delaware General Corporation Law (the "DGCL") provides in relevant part that a corporation may indemnify any officer or director who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another entity, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. Under Section 145(b) of the DGCL, such eligibility for indemnification may be further subject to the adjudication of the Delaware Court of Chancery.

The articles of incorporation and by-laws of Fund American provides that Fund American indemnifies its officers and directors to the maximum extent allowed by Delaware law.

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Furthermore, Section 102(b)(7) of the DGCL provides that a corporation may in its certificate of incorporation eliminate or limit the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability: for any breach of the director's duty of loyalty to the corporation or its stockholders; for acts or omissions not in good faith or which involve intensional misconduct or a knowing violation of law; under Section 174 of the DGCL (pertaining to certain prohibited acts including unlawful payment of dividends or unlawful purchase or redemption of the corporation's capital stock); or for any transaction from which the director derived an improper personal benefit. Fund American eliminates such personal liability of its directors under such terms.

Indemnification Of Trustees Of The Fund American Trusts.

The amended and restated declaration of trust of each Fund American Trust will provide that no regular trustee, or affiliate of any regular trustee, or officer, director, shareholder, member, partner, employee, representative or agent of any regular trustee or of any such affiliate, or employee or agent of the applicable Fund American Trust or its affiliates, each an "Indemnified Person", shall be liable, responsible or accountable in damages or otherwise to such Fund American Trust or any employee or agent of such Fund American Trust or its affiliates for any loss, damage or claim incurred by reason or any act or omission performed or omitted by such Indemnified Person in good faith on behalf of such Fund American Trust and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by such declaration of trust or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's gross negligence or willful misconduct with respect to such act or omission. Each amended and restated declaration of trust will also provide that to the fullest extent permitted by applicable law, Fund American shall indemnify and hold harmless each Indemnified Person from and against any loss, damage or claim incurred by such Indemnified Person by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the applicable Fund American Trust and in a manner such Indemnified Person reasonably believe to be within the scope of authority conferred on such Indemnified Person by such declaration of trust, except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified Person by reason of gross negligence or willful misconduct with respect to such act or omission. Each amended and restated declaration of trust will further provide that, to the fullest extent permitted by applicable law, expenses, including legal fees, incurred by an Indemnified Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by Fund American prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt of an undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be determined that the Indemnified Person is not entitled to be indemnified for the underlying cause of action as authorized by such declaration of trust.

Item 16. Exhibits and Financial Statement Schedules.

(a): Exhibits

1.1		Form of Underwriting Agreement (preference shares).**
1.2		Form of Underwriting Agreement (debt).**
1.3		Form of Underwriting Agreement (preferred stock).***
1.4		Form of Underwriting Agreement (common shares).*
3.1		Articles of Incorporation of Fund American Companies, Inc., as amended.**
3.2		By-laws of Fund American Companies, Inc.**
4.1		Form of Senior Indenture.*

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4.2		Form of Senior Debt Security (included in Form of Senior Indenture filed as Exhibit 4.1).*
4.3		Form of Subordinated Indenture.*
4.4		Form of Subordinated Debt Security (included in Form of Subordinated Indenture filed as Exhibit 4.3).*
4.5		Form of Junior Subordinated Indenture.*
4.6		Form of Junior Subordinated Debt Security (included in Form of Junior Subordinated Indenture filed as Exhibit 4.5).*
4.7		Certificate of Trust of Fund American Trust I.**
4.8		Certificate of Trust of Fund American Trust II.**
4.9		Certificate of Trust of Fund American Trust III.**
4.10		Amended and Restated Declaration of Trust of Fund American Trust I.*
4.11		Amended and Restated Declaration of Trust of Fund American Trust II.*
4.12		Amended and Restated Declaration of Trust of Fund American Trust III.*
4.13		Form of Amended and Restated Declaration of Trust of Fund American Trust I.**
4.14		Form of Amended and Restated Declaration of Trust of Fund American Trust II.**
4.15		Form of Amended and Restated Declaration of Trust of Fund American Trust III.**
4.16		Form of Preferred Security of Fund American Trust I (included in Form of Amended and Restated Declaration of Trust of Fund American Trust I filed as Exhibit 4.13).
4.17		Form of Preferred Security of Fund American Trust II (included in Form of Amended and Restated Declaration of Trust of Fund American Trust II filed as Exhibit 4.14).
4.18		Form of Preferred Security of Fund American Trust III (included in Form of Amended and Restated Declaration of Trust of Fund American Trust III filed as Exhibit 4.15).
4.19		Form of Guarantee of Preferred Securities of Fund American Trust I.*
4.20		Form of Guarantee of Preferred Securities of Fund American Trust II.*
4.21		Form of Guarantee of Preferred Securities of Fund American Trust III.*
5.1		Opinion of Cravath, Swaine & Moore LLP.*
5.2		Opinion of Conyers Dill & Pearman.*
5.3		Opinion of Richards, Layton & Finger.*

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12.1		Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.*
23.1		Consent of PricewaterhouseCoopers LLP.*
23.2		Consent of PricewaterhouseCoopers LLP.*
23.4		Consent of Cravath, Swaine & Moore LLP (contained in Exhibit 5.1).
23.5		Consent of Conyers Dill & Pearman (contained in Exhibit 5.2).
23.6		Consent of Richards, Layton & Finger (contained in Exhibit 5.3).
24.1		Powers of Attorney (previously filed for White Mountains Insurance Group, Ltd., included on signature page for Fund American Companies, Inc.).
25.1		Statement of Eligibility and Qualification on Form T-1 of Bank One, National Association, as trustee under the Senior Indenture.*
25.2		Statement of Eligibility and Qualification on Form T-1 of Bank One, National Association, as trustee under the Subordinated Indenture.*
25.3		Statement of Eligibility and Qualification on Form T-1 of Bank One, National Association, as trustee under the Junior Subordinated Indenture.*
25.4		Statement of Eligibility and Qualification on Form T-1 of Bank One, National Association, as trustee under the Declaration of Trust of Fund American Trust I.*
25.5		Statement of Eligibility and Qualification on Form T-1 of Bank One, National Association, as trustee under the Declaration of Trust of Fund American Trust II.*
25.6		Statement of Eligibility and Qualification on Form T-1 of Bank One, National Association, as trustee under the Declaration of Trust of Fund American Trust III.*
25.7		Statement of Eligibility and Qualification on Form T-1 of Bank One, National Association, as trustee under the Guarantee of Preferred Securities of Fund American Trust I.*
25.8		Statement of Eligibility and Qualification on Form T-1 of Bank One, National Association, as trustee under the Guarantee of Preferred Securities of Fund American Trust II.*
25.9		Statement of Eligibility and Qualification on Form T-1 of Bank One, National Association, as trustee under the Guarantee of Preferred Securities of Fund American Trust III.*

*: Filed herewith
**: Included as an exhibit to White Mountains' Registration Statement on Form S-3 (Registration No. 333-73012) incorporated by reference hereby.
***: To be filed by subsequent Form 8-K.

Item 17. Undertakings.

(a)

The 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,

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individually or in the aggregate, represent a fundamental change in the information set forth 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 SEC 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 the SEC 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): The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 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): The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.
(d): Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has 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 the registrant of expenses incurred or paid by a director, officer or controlling person of the 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, the 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

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indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(e)

The 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.

(f)

The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee under subsection (a) of Section 310 of the Trust Indenture Act (the "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, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Hanover, State of New Hampshire, on June 27, 2003.

		WHITE MOUNTAINS INSURANCE GROUP, LTD.
		By:	/s/ J. BRIAN PALMER J. Brian Palmer Chief Accounting Officer

Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date

/s/ RAYMOND BARRETTE Raymond Barrette	Director and Chief Executive Officer (Principal Executive Officer)	June 27, 2003
* John J. Byrne	Chairman	June 27, 2003
* Mark J. Byrne	Director	June 27, 2003
* Howard L. Clark, Jr.	Director	June 27, 2003
* Robert P. Cochran	Director	June 27, 2003
* Steven E. Fass	Director	June 27, 2003
* David T. Foy	Executive Vice President and Chief Financial Officer (Principal Financial Officer)	June 27, 2003
* George J. Gillespie, III	Director	June 27, 2003

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* John D. Gillespie	Director	June 27, 2003
/s/ K. THOMAS KEMP K. Thomas Kemp	Director	June 27, 2003
* Gordon S. Macklin	Director	June 27, 2003
* Frank A. Olson	Director	June 27, 2003
/s/ J. BRIAN PALMER J. Brian Palmer	Chief Accounting Officer (Principal Accounting Officer)	June 27, 2003
* Joseph S. Steinberg	Director	June 27, 2003
* Arthur Zankel	Director	June 27, 2003

By:	/s/ K. THOMAS KEMP K. Thomas Kemp Attorney-in-fact

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SIGNATURES

		FUND AMERICAN COMPANIES, INC.
		By:	/s/ REID T. CAMPBELL Reid T. Campbell Vice President

POWER OF ATTORNEY

We, the undersigned officers and directors of Fund American Companies, Inc. hereby severally constitute John D. Gillespie and Reid T. Campbell, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below and all amendments (including post-effective amendments) to this registration statement (or to any other registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act), and generally to do all such things in our names and in our capacities as officers and directors to enable Fund American Companies, Inc. to comply with the provisions of the Securities Act of 1933 and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto.

Pursuant to the requirements of the Securities Act of 1933, this amendment has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date

/s/ RAYMOND BARRETTE Raymond Barrette	Chairman	June 27, 2003
/s/ JOHN J. BYRNE John J. Byrne	Director	June 27, 2003
/s/ REID T. CAMPBELL Reid T. Campbell	Vice President (Principal Financial Officer)	June 27, 2003
/s/ JOHN C. CAVOORES John C. Cavoores	Director	June 27, 2003
/s/ CHARLES B. CHOKEL Charles B. Chokel	Director	June 27, 2003
/s/ STEVEN E. FASS Steven E. Fass	Director	June 27, 2003

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/s/ JOHN D. GILLESPIE John D. Gillespie		Director, President and Chief Executive Officer (Principal Executive Officer)		June 27, 2003
/s/ MICHAEL S. PAQUETTE Michael S. Paquette		Vice President (Principal Accounting Officer)		June 27, 2003

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of Fund American Trust I, Fund American Trust II and Fund American Trust III certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Guilford, State of Connecticut, on June 27, 2003.

		FUND AMERICAN TRUST I a Delaware statutory trust
		By:	/s/ REID T. CAMPBELL Reid T. Campbell Vice President

		FUND AMERICAN TRUST II a Delaware statutory trust
		By:	/s/ REID T. CAMPBELL Reid T. Campbell Vice President

		FUND AMERICAN TRUST III a Delaware statutory trust
		By:	/s/ REID T. CAMPBELL Reid T. Campbell Vice President

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QuickLinks

TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
PROSPECTUS SUMMARY
Fund American Companies, Inc.
The Fund American Trusts
THE OFFERING
RISK FACTORS
OUR EXECUTIVE OFFICES
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
USE OF PROCEEDS
BUSINESS
SELLING SHAREHOLDERS
GENERAL DESCRIPTION OF SECURITIES
DESCRIPTION OF OUR COMMON SHARES
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION
ENFORCEMENT OF JUDGMENTS AND OTHER MATTERS
PART II
SIGNATURES
SIGNATURES
POWER OF ATTORNEY
SIGNATURES



                                                                     EXHIBIT 1.4

                               [   ] COMMON SHARES

                      WHITE MOUNTAINS INSURANCE GROUP, LTD.

                                  COMMON SHARES

                         FORM OF UNDERWRITING AGREEMENT

                                  [   ], 20[ ]

[Underwriters]
c/o

Ladies and Gentlemen:

          White Mountains Insurance Group Ltd., a company existing under the
laws of Bermuda (the "Company"), proposes to sell to the several underwriters
(the "Underwriters") named in Schedule I hereto [  ] of the Company's Common
Shares (the "Firm Shares"). The respective amounts of the Firm Shares to be so
purchased by the several Underwriters are set forth opposite their names in
Schedule I hereto. The Company also proposes to sell at the Underwriters' option
an aggregate of up to an additional [  ] of the Company's Common Shares (the
"Option Shares") as set forth below.

          As the Underwriters, you have advised the Company (a) that you are
authorized to enter into this Agreement and (b) that the Underwriters are
willing, acting severally and not jointly, to purchase the numbers of Firm
Shares set forth opposite their respective names in Schedule I, plus their pro
rata portion of the Option Shares if you elect to exercise the over-allotment
option in whole or in part. The Firm Shares and the Option Shares (to the extent
the aforementioned option is exercised) are herein collectively called the
"Shares".

          In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:



          1.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants as follows:

          (a)    A registration statement on Form S-3 (File No. 333-[  ]) with
respect to the Shares has been carefully prepared by the Company in conformity
in all material respects with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the Rules and Regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder and has
been filed with the Commission under the Act. The Company has complied with the
conditions for the use of Form S-3. Copies of such registration statement,
including any amendments thereto, the preliminary prospectuses (meeting the
requirements of Rules 430A, 415 and 424(b) of the Rules and Regulations)
contained therein and the exhibits, financial statements and schedules, as
finally amended and revised, have heretofore been delivered by the Company to
you. Such registration statement, together with any registration statement filed
by the Company pursuant to Rule 462(b) of the Act, herein referred to as the
"Registration Statement", which shall be deemed to include all information
omitted therefrom in reliance upon Rule 430A and contained in the Prospectus
referred to below, has been declared effective by the Commission under the Act
and no post-effective amendment to the Registration Statement has been filed as
of the date of this Agreement. "Prospectus" means (i) the form of prospectus
and/or prospectus supplement first filed by the Company with the Commission
pursuant to its Rule 424(b) or (ii) the last preliminary prospectus included in
the Registration Statement filed prior to the time it becomes effective or filed
pursuant to Rule 424(a) under the Act that is delivered by the Company to the
Underwriters for delivery to purchasers of the Shares, together with any term
sheet or abbreviated term sheet filed with the Commission pursuant to Rule
424(b)(7) under the Act. Each preliminary prospectus and/or preliminary
prospectus supplement included in the Registration Statement prior to the time
it becomes effective is herein referred to as a "Preliminary Prospectus". Except
as specifically set forth herein, (i) any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be, and (ii) in the case of any
reference herein to any Prospectus, also shall be deemed to include any
documents incorporated by reference therein, and any supplements or amendments
thereto, filed with the Commission after the date of filing of the Prospectus
under Rules 415, 424(b) and 430A, and prior to the termination of the offering
of the Shares by the Underwriters.

          (b)    The Company has been duly organized and is validly existing as
a corporation under the laws of Bermuda, with corporate power and authority to
own or lease its properties and conduct its business as described in the
Registration Statement; each of the subsidiaries of the Company as listed on
Schedule II hereto (collectively, the "Subsidiaries") has been duly organized
and, is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and authority to own or
lease its properties and conduct its business as described in the Registration
Statement; the Company and each of the Subsidiaries are duly qualified to
transact business in all jurisdictions in which the conduct of their business
requires such qualification and a failure to qualify would have a materially
adverse effect upon the

                                        2


business or financial condition of the Company and the Subsidiaries taken as a
whole; except as set forth on Schedule II hereto, the outstanding shares of
capital stock of each of the Subsidiaries owned by the Company or a Subsidiary
have been duly authorized and validly issued, are fully paid and nonassessable
and are owned by the Company or another subsidiary free and clear of all liens,
encumbrances and security interests and no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to convert
any obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.

          (c)    The outstanding Common Shares of the Company have been duly
authorized and are validly issued, fully-paid and non-assessable; the Shares to
be issued and sold by the Company have been duly authorized and when issued and
paid for as contemplated herein will be validly issued, fully-paid and
non-assessable; and no preemptive rights of stockholders exist with respect to
any of the Shares or the issue and sale thereof. Neither the filing of the
Registration Statement nor the offering or sale of the Shares as contemplated by
this Agreement gives rise to any rights, other than those which have been waived
or satisfied, for or relating to the registration of any Common Shares of the
Company.

          (d)    This Agreement has been duly authorized, executed and delivered
by the Company and is a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.

          (e)    The information set forth under the caption "Capitalization" in
the Prospectus is true and correct. The Shares conform in all material respects
with the statements concerning them in the Registration Statement.

          (f)    The Commission has not issued an order preventing or suspending
the use of any Prospectus relating to the proposed offering of the Shares nor
instituted proceedings for that purpose. The Registration Statement contains and
the Prospectus and any amendments or supplements thereto will contain all
statements which are required to be stated therein by, and in all material
respects conform or will conform, as the case may be, to the requirements of,
the Act and the Rules and Regulations. The documents incorporated by reference
in the Prospectus, at the time they were filed with the Commission conformed in
all material respects to the requirements of the Securities Exchange Act of 1934
or the Act, as applicable, and the Rules and Regulations of the Commission
thereunder. Neither the Registration Statement nor any amendment thereto, and
neither the Prospectus nor any supplement thereto, including any documents
incorporated by reference therein, contains or will contain, as the case may be,
any untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from the Registration
Statement or the Prospectus, or any such amendment or supplement, or any
documents incorporated by reference therein, in reliance upon, and in conformity
with, written information furnished to the Company by or on behalf of any
Underwriter, specifically for use in the preparation thereof.

                                        3


          (g)    The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules incorporated by
reference in the Registration Statement, present fairly the financial position
and the results of operations of the Company and its subsidiaries consolidated,
at the indicated dates and for the indicated periods. Such financial statements
have been prepared in accordance with generally accepted principles of
accounting, consistently applied throughout the periods involved, and all
adjustments necessary for a fair presentation of results for such periods have
been made. The selected and summary financial and statistical data included in
the Registration Statement present fairly the information shown therein and have
been compiled on a basis consistent with the financial statements incorporated
by reference therein and the books and records of the Company. The pro forma
financial information included in the Registration Statement and the Prospectus
present fairly the information shown therein, have been properly compiled on the
pro forma bases described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions or circumstances
referred to therein.

          (h)    The Company and the Subsidiaries have good and marketable title
to all of the properties and assets reflected in the financial statements
hereinabove described (or as described in the Registration Statement) subject to
no material lien, mortgage, pledge, charge or encumbrance of any kind, except
those reflected in such financial statements or as described in the Registration
Statement or set forth on Schedule II. The Company and the Subsidiaries occupy
their leased properties under valid leases with such exceptions as are not
material to the Company and the Subsidiaries taken as a whole and do not
materially interfere with the use made and proposed to be made of such
properties by the Company and the Subsidiaries.

          (i)    The Company and the Subsidiaries have filed all Federal, state
and foreign income tax returns which have been required to be filed and have
paid all taxes indicated by said returns and all assessments received by them or
any of them to the extent that such taxes have become due and are not being
contested in good faith. The Company has no knowledge of any tax deficiency that
has been or might be asserted against the Company.

          (j)    Since the respective dates as of which information is given in
the Registration Statement, as it may be amended or supplemented, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the earnings, business, management,
properties, assets, rights, operations, condition (financial or otherwise) or
business prospects of the Company and its Subsidiaries (taken as a whole),
whether or not occurring in the ordinary course of business, other than general
economic and industry conditions changes in the ordinary course of business and
changes or transactions described or contemplated in the Registration Statement
and there has not been any material transaction entered into by the Company or
the Subsidiaries, other than transactions in the ordinary course of business and
changes and transactions contemplated by the Registration Statement, as it may
be amended or supplemented. None of the Company or the Subsidiaries have any
material

                                        4


contingent obligations which are not disclosed in the Registration Statement, as
it may be amended or supplemented.

          (k)    Neither the Company nor any of the Subsidiaries is or with the
giving of notice or lapse of time or both, will be in default under its Articles
of Incorporation or By-Laws or any agreement, lease, contract, indenture or
other instrument or obligation to which it is a party or by which it, or any of
its properties, is bound and which default is of material significance in
respect of the business or financial condition of the Company and its
Subsidiaries (taken as a whole). The execution and delivery of this Agreement
and the consummation of the transactions herein contemplated and the fulfillment
of the terms hereof will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust or other material agreement or instrument to which the Company or
any Subsidiary is a party, or of the Articles of Incorporation or by-laws of the
Company or any order, rule or regulation applicable to the Company or any
Subsidiary, or of any court or of any regulatory body or administrative agency
or other governmental body having jurisdiction, except in all cases a conflict,
breach or default which would not have a materially adverse effect on the
business or financial condition of the Company and the Subsidiaries (taken as a
whole).

          (l)    Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or the New York Stock
Exchange ("NYSE") or may be necessary to qualify the Shares for public offering
by the Underwriters under State securities or Blue Sky laws) has been obtained
or made and is in full force and effect.

          (m)    The Company and each of the Subsidiaries hold all material
licenses, certificates and permits from governmental authorities which are
necessary to the conduct of their businesses; and neither the Company nor any of
the Subsidiaries has received notice of any infringement of any material
patents, patent rights, trade names, trademarks or copyrights, which
infringement is material to the business of the Company and the Subsidiaries
(taken as a whole).

          (n)    [     ], [   ] and [    ], each of whom have certified certain
of the financial statements incorporated by reference in the Registration
Statement and Prospectus, are to the knowledge of the Company independent public
accountants as required by the Act and the Rules and Regulations.

          (o)    To the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's officers,
directors or 5% or greater security holders except as otherwise disclosed in
writing to [name specific underwriter].

                                        5


          (p)    Neither the Company, nor to the Company's knowledge, any of the
Subsidiaries, has taken or may take, directly or indirectly, any action designed
to cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of Common
Shares of the Company to facilitate the sale or resale of the Shares. The
Company acknowledges that the Underwriters may engage in passive market making
transactions in the Shares on the NYSE in accordance (and in compliance) with
Regulation M under the Exchange Act.

          (q)    Neither the Company nor any Subsidiary is an "investment
company" within the meaning of such term under the Investment Company Act of
1940 and the rules and regulations of the Commission thereunder.

          (r)    The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

          (s)    The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar industries.

          (t)    The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) for which the
Company would have any liability has occurred and is continuing; the Company has
not incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "Code"); and each
"pension plan" for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.

          (u)    The information set forth in the Prospectus under the caption
"Prospectus Summary-Recent Developments" is true and correct in all material
respects.

          Any certificate signed by any officer of the Company and delivered to
the Underwriters in connection with the offering of the Shares should be deemed
a representation and warranty of the Company, as to matters covered thereby, to
each Underwriter.

                                        6


          2.     PURCHASE, SALE AND DELIVERY OF THE SHARES. (a) On the basis of
the representations, warranties and covenants herein contained, and subject to
the conditions herein set forth, the Company agrees to sell to the Underwriters
the Shares, and each Underwriter agrees, severally and not jointly, to purchase
at a price of $[ ] per share, the number of Firm Shares set forth opposite the
name of each Underwriter in Schedule I hereof, subject to adjustments in
accordance with Section 9 hereof.

          (a)    Payment for the Firm Shares to be sold hereunder by the Company
is to be made via wire transfer of immediately available funds or such other
payment procedures agreed to by the parties. Such payment and delivery are to be
made at the offices of [name specific underwriter], at 10:00 a.m., time, on the
third business day after the date of this Agreement or at such other time and
date not later than five business days thereafter as you and the Company shall
agree upon, such time and date being herein referred to as the "Closing Date."
(As used herein, "business day" means a day on which the New York Stock Exchange
is open for trading and on which banks in New York are open for business and not
permitted by law or executive order to be closed.) The certificates for the Firm
Shares will be delivered in such denominations and in such registrations as the
Underwriters request in writing not later than the second full business day
prior to the Closing Date, and will be made available for inspection by the
Underwriters at least one business day prior to the Closing Date.

          (b)    In addition, on the basis of representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase the
Option Shares at the price per share as set forth in the first paragraph of this
Section 2. The option granted hereby may be exercised in whole or in part by
giving written notice only once within 30 days after the date of this Agreement,
by you, the Underwriters, to the Company, setting forth the number of Option
Shares as to which the several Underwriters are exercising the option, the names
and denominations in which the Option Shares are to be registered and the time
and date at which such certificates are to be delivered. The time and date at
which certificates for Option Shares are to be delivered shall be determined by
the Underwriters but shall not be earlier than three nor later than ten full
business days after the exercise of such option, nor in any event prior to the
Closing Date (such time and date being herein referred to as the "Option Closing
Date"). If the date of exercise of the option is three or more days before the
Closing Date, the notice of exercise shall set the Closing Date as the Option
Closing Date. The option with respect to the Option Shares granted hereunder may
be exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters. You, the Underwriters, may cancel such option at any time prior to
its expiration by giving written notice of such cancelation to the Company. To
the extent, if any, that the option is exercised, payment for the Option Shares
shall be made on the Option Closing Date via wire transfer of immediately
available funds or other payment procedures agreed to by the parties against
delivery of certificates therefor at the offices of [name specific underwriter].

          3.     OFFERING BY THE UNDERWRITERS. It is understood that the
Underwriters are to make a public offering of the Firm Shares as soon as the

                                        7


Underwriters deem it advisable to do so. The Firm Shares are to be initially
offered to the public at the public offering price set forth in the Prospectus.
The Underwriters may from time to time thereafter change the public offering
price and other selling terms. To the extent, if at all, that any Option Shares
are purchased pursuant to Section 2 hereof, the Underwriters will offer them to
the public on the foregoing terms.

          It is further understood that you will act as the Underwriters in the
offering and sale of the Shares will take place in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.

          4.     COVENANTS OF THE COMPANY. The Company covenants and agrees
with the several Underwriters that:

          (a)    The Company will (i) prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a Prospectus
containing information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules and Regulations,
(ii) not file any amendment to the Registration Statement or any Rule 462(b)
registration statement or supplement to the Prospectus or documents incorporated
by reference therein of which the Underwriters shall not previously have been
advised and furnished with a copy or to which the Underwriters shall have
reasonably objected in writing or which is not in compliance with the Rules and
Regulations and (iii) file on a timely basis all reports and any definitive
proxy or information statements required to be filed by the Company with the
Commission subsequent to the date of the Prospectus and prior to the termination
of the offering of the Shares by the Underwriters.

          (b)    The Company will advise the Underwriters promptly of any
request of the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information, or of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus or of the institution of any
proceedings for that purpose, and the Company will use reasonable efforts to
prevent the issuance of any such stop order preventing or suspending the use of
the Prospectus and to obtain as soon as possible the lifting thereof, if issued.

          (c)    The Company will deliver to, or upon the order of, the
Underwriters, from time to time, as many copies of any Preliminary Prospectus as
the Underwriters may reasonably request. The Company will deliver to, or upon
the order of, the Underwriters during the period when delivery of a Prospectus
is required under the Act, as many copies of the Prospectus in final form, or as
thereafter amended or supplemented, as the Underwriters may reasonably request.
The Company will deliver to the Underwriters at or before the Closing Date, four
signed copies of the Registration Statement and all amendments thereto including
all exhibits filed therewith, and will deliver to the Underwriters such number
of copies of the Registration Statement, but without exhibits, and of all
amendments thereto, as the Underwriters may reasonably request, including
documents incorporated by reference therein.

                                        8


          (d)    The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later than
15 months after the effective date of the Registration Statement, an earnings
statement (which need not be audited) in reasonable detail, covering a period of
at least 12 consecutive months beginning after the effective date of the
Registration Statement, which earnings statement shall satisfy the requirements
of Section 11(a) of the Act and Rule 158 of the Rules and Regulations and will
advise you in writing when such statement has been so made available.

          (e)    The Company will, for a period of five years from the Closing
Date, deliver or make available to the Underwriters copies of annual reports and
copies of all other documents, reports and information furnished by the Company
to its stockholders or filed with any securities exchange pursuant to the
requirements of such exchange or with the Commission pursuant to the Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act").

          (f)    No offering, sale, short sale or other disposition of any
Common Shares of the Company or other securities convertible into or
exchangeable or exercisable for Common Shares of the Company will be made by the
Company for a period of [ ] days after the date of this Agreement, directly or
indirectly, by the Company otherwise than hereunder, or with the prior written
consent of [name specific underwriter], except that the Company may, without
such consent, grant options or issue Common Shares of the Company pursuant to
the exercise of options granted under the Company's current stock option plans
and may offer or issue Common Shares of the Company in connection with the
acquisition of stock or assets of another person.

          (g)    The Company will comply with the Act and the Rules and
Regulations, and the Exchange Act, and the rules and regulations of the
Commission thereunder, so as to permit the completion of the distribution of the
Shares as contemplated in this Agreement and the Prospectus. If during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the Underwriters, it
becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading, or, if it is necessary
at any time to amend or supplement the Prospectus to comply with any law, the
Company promptly will either (i) prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement to the
Prospectus or (ii) prepare and file with the Commission an appropriate filing
under the Exchange Act which shall be incorporated by reference in the
Prospectus so that the Prospectus as so amended or supplemented will not, in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with the law.

          (h)    The Company will use its best efforts to list, subject to
notice of issuance, the Shares on the NYSE.

                                        9


          (i)    The Company has caused each of [    ] and [    ] to furnish to
you, or prior to the date of this agreement, a letter or letters, in form and
substance satisfactory to the Underwriters, pursuant to which each such person
has agreed not to offer, sell, sell short or otherwise dispose of any Common
Shares of the Company of the Company or other capital stock of the Company, or
any other securities convertible, exchangeable or exercisable for common shares
or derivative of common shares owned by such person or request the registration
for the offer or sale of any of the foregoing (or as to which such person has
the right to direct the disposition of) for a period of [  ] days after the date
of this Agreement, directly or indirectly, except with the prior written consent
of [name specific underwriter] ("Lockup Agreements").]

          (j)    The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Shares in such a manner as would
require the Company or any of the Subsidiaries to register as an investment
company under the Investment Company Act of 1940, as amended (the "1940 Act").

          (k)    The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar for the
Common Shares of the Company.

          (l)    The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.

                                       10


          5.     COSTS AND EXPENSES. The Company will pay all costs, expenses
and fees incident to the performance of the obligations of the Company under
this Agreement, including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and disbursements of counsel
for the Company; the cost of printing and delivering to, or as requested by, the
Underwriters copies of the Registration Statement, Preliminary Prospectuses, the
Prospectus, this Agreement; fees and expenses related to Blue Sky matters; the
filing fees of the Commission; and the filing fees of the NASD. The Company
shall not, however, be required to pay for any of the Underwriters' expenses
except that, if this Agreement shall not be consummated because the conditions
in Section 8 hereof are not satisfied, or because this Agreement is terminated
by the Underwriters pursuant to Section 7 hereof, or by reason of any failure,
refusal or inability on the part of the Company to perform any undertaking or
satisfy any condition of this Agreement or to comply with any of the terms
hereof on its part to be performed, unless such failure to satisfy said
condition or to comply with said terms is due to the default or omission of any
Underwriter, then the Company shall reimburse the several Underwriters for
reasonable out-of-pocket expenses, including fees and disbursements of counsel,
reasonably incurred in connection with investigating, marketing and proposing to
market the Shares or in contemplation of performing their obligations hereunder;
but the Company shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits from the sale
by them of the Shares.

          6.     CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS. The several
obligations of the Underwriters to purchase the Firm Shares on the Closing Date
and the Option Shares, if any, on the Option Closing Date are subject to the
accuracy, as of the Closing Date or the Option Closing Date, as the case may be,
of the representations and warranties of the Company contained herein, and to
the performance by the Company of its covenants and obligations hereunder and to
the following additional conditions:

          (a)    The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule
415, Rule 424 and Rule 430A of the Rules and Regulations shall have been made,
and any request of the commission for additional information (to be included in
the Registration Statement or otherwise) shall have been disclosed to the
Underwriters and complied with to their reasonable satisfaction. No stop order
suspending the effectiveness of the Registration Statement, as amended from time
to time, shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission and no injunction, restraining order, or order of any nature by a
Federal or state court of competent jurisdiction shall have been issued as of
the Closing Date which would prevent the issuance of the Shares.

          (b)    The Underwriters shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Cravath, Swaine & Moore,
counsel for the Company, and Conyers, Dill & Pearman, Bermuda counsel for the
Company, each dated the Closing Date or the Option Closing Date, as the case may
be, addressed to the Underwriters substantially in the form attached hereto as
Exhibits A and

                                       11


B, respectively, and a 10b-5 statement from Cravath, Swaine & Moore,
substantially in the form attached hereto as Exhibit C.

          (c)    The Underwriters shall have received on each of the date
hereof, the Closing Date or the Option Closing Date, as the case may be, signed
letters from [    ], [       ] and [    ], dated the Closing Date or the Option
Closing Date, as the case may be, which shall confirm, on the basis of a review
in accordance with the procedures set forth in the letters signed by such firms
and dated and delivered to the Underwriters on the date hereof that nothing has
come to their attention during the period from the date five days prior to the
date hereof, to a date not more than five days prior to the Closing Date or the
Option Closing Date, as the case may be, which would require any change in their
letter dated the date hereof if it were required to be dated and delivered on
the Closing Date or the Option Closing Date, as the case may be. All such
letters shall be in form and substance satisfactory to the Underwriters.

          (d)    The Underwriters shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
President or Chief Executive Officer and the Senior Vice President and Chief
Accounting Officer of the Company to the effect that, as of the Closing Date or
the Option Closing Date, as the case may be, each of them severally represents
as follows:

          (i)    The Registration Statement has become effective under the Act
     and no stop order suspending the effectiveness of the Registration
     Statement has been issued, and no proceedings for such purpose have been
     taken or are, to his knowledge, contemplated by the Commission.

          (ii)   There is no litigation instituted or threatened against the
     Company of a character required to be disclosed in the Registration
     Statement which is not so disclosed.

          (iii)  He has carefully examined the Registration Statement and the
     Prospectus and, as of the effective date of the Registration Statement, the
     statements contained in the Registration Statement were true and correct in
     all material respects, and such Registration Statement and Prospectus did
     not omit to state a material fact required to be stated therein or
     necessary in order to make the statements therein not misleading and, in
     his opinion, since the effective date of the Registration Statement, no
     event has occurred which should have been set forth in a supplement to or
     an amendment of the Prospectus which has not been so set forth in such
     supplement or amendment.

          (e)    The Company shall have furnished to the Underwriters such
further certificates and documents confirming the representations and warranties
contained herein and related matters as the Underwriters may reasonably have
requested.

          (f)    The Firm Shares and Option Shares, if any, have been approved
for listing upon official notice of issuance on the NYSE.

                                       12


          The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects reasonably satisfactory to the Underwriters and to [  ],
counsel for the Underwriters.

          If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Underwriters by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date or the Option Closing Date, as the case
may be. In such event, the Company and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Sections 5 and 8
hereof).

          7.     CONDITIONS OF THE OBLIGATIONS OF THE COMPANY. The obligations
of the Company to sell and deliver the Shares required to be delivered as and
when specified in this Agreement are subject to the conditions that at the
Closing Date or the Option Closing Date, as the case may be, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and in effect or proceedings therefor initiated or threatened.

          8.     INDEMNIFICATION. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act against any losses, claims, damages or liabilities
to which such Underwriter or such controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter and
each such controlling person for any legal or other expenses reasonably incurred
by such Underwriter or such controlling person in connection with investigating
or defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement, or omission or alleged
omission made in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by or through the Underwriters
specifically for use in the preparation thereof, and provided further that the
Company shall not be liable with respect to any untrue statement contained in or
any omission from a Preliminary Prospectus if the untrue statement contained in
or such omission from such Preliminary Prospectus was corrected in the
applicable Prospectus and the person asserting any such loss, liability, claim
or damage was not given or sent a copy of the applicable Prospectus (excluding
the documents incorporated by reference therein) in the manner and at such time
as required by the Act, provided the Company has furnished you copies of such
applicable

                                       13


Prospectus. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.

          (a)    Each Underwriter will indemnify and hold harmless the Company,
each of its directors or nominees for director, each of its officers who have
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such director, nominee for director,
officer, or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances under which they were made; and will reimburse any legal or
other expenses reasonably incurred by the Company, any such director, nominee
for director, officer, or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that each Underwriter will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by such Underwriter or through the Underwriters on
behalf of such Underwriter specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.

          (b)    In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available to any
party who shall fail to give notice as provided in this Section 8(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was prejudiced by the failure to give such notice,
but the failure to give such notice shall not relieve the indemnifying party or
parties from any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of the provisions of Section 8(a)
or (b). In case any such proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party and shall pay as incurred the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel at its own expense.
Notwithstanding the foregoing, the indemnifying party shall pay as incurred (or
within 30 days of presentation) the fees and expenses of

                                       14


the counsel retained by the indemnified party (and, if any reasonably necessary,
one additional local counsel) in the event (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be selected by you in the case of parties indemnified pursuant to
Section 8(a) and by the Company in the event of parties indemnified pursuant to
Section 8(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.

          (c)    If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. No party shall be held liable for contribution with
respect to any claim or action settled without its consent which shall not be
unreasonably withheld. Such consent shall be given within three business days
from the date on which the party requesting consent provides a written request
to the other party.

                                       15


          The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this Section 8(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 8(d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.

          (d)    In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.

          (e)    Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, or its directors, nominees for director or
officers or any persons controlling the Company, (ii) acceptance of any Shares
and payment therefor hereunder, and (iii) any termination of this Agreement. A
successor to any Underwriter, or to the Company, or their respective directors
or officers, or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 8.

          9.     DEFAULT BY UNDERWRITERS. If on the Closing Date or the Option
Closing Date, as the case may be, any Underwriter shall fail to purchase and pay
for the portion of the Shares which such Underwriter has agreed to purchase and
pay for on such date (otherwise than by reason of any default on the part of the
Company, the non-defaulting Underwriters shall use their best efforts to procure
within 24 hours thereafter one or more of the other Underwriters, or any others,
to purchase from the

                                       16


Company such amounts as may be agreed upon and upon the terms set forth herein,
the Firm Shares or Option Shares, as the case may be, which the defaulting
Underwriter or Underwriters failed to purchase. If during such 24 hours you, the
non-defaulting Underwriters, shall not have procured such other Underwriters, or
any others, to purchase the Firm Shares or Option Shares, as the case may be,
agreed to be purchased by the defaulting Underwriter or Underwriters, then (a)
if the aggregate number of shares with respect to which such default shall occur
does not exceed 10% of the Firm Shares or Option Shares, as the case may be,
covered hereby, the other Underwriters shall be obligated, severally, in
proportion to the respective numbers of Firm Shares or Option Shares, as the
case may be, which they are obligated to purchase hereunder, to purchase the
Firm Shares or Option Shares, as the case may be, which such defaulting
Underwriter or Underwriters failed to purchase, or (b) if the aggregate number
of shares of Firm Shares or Option Shares, as the case may be, with respect to
which such default shall occur exceeds 10% of the Firm Shares or Option Shares,
as the case may be, covered hereby, the Company or you as the Underwriters will
have the right, by written notice given within the next 24-hour period to the
parties to this Agreement, to terminate this Agreement without liability on the
part of the non-defaulting Underwriters or of the Company except to the extent
provided in Section 9 hereof. In the event of a default by any Underwriter or
Underwriters, as set forth in this Section 9, the Closing Date or Option Closing
Date, as the case may be, may be postponed for such period, not exceeding seven
days, as you, the non-defaulting Underwriters, may determine in order that the
required changes in the Registration Statement or in the Prospectus or in any
other documents or arrangements may be effected. The term "Underwriter" includes
any person substituted for a defaulting Underwriter. Any action taken under this
Section 9 shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.

          10.    NOTICES. All communications hereunder shall be in writing and,
except as otherwise provided herein, will be mailed, delivered or telegraphed
and confirmed as follows: if to the Underwriters, to [   ], [   ], Attention:
[   ], Managing Director; if to the Company, to White Mountains Insurance Group,
Ltd., 80 South Main Street, Hanover, New Hampshire 03755-2053, attention: [   ].

          11.    TERMINATION. This Agreement may be terminated by you by notice
to the Company as follows:

          (a)    at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters, or (ii) 11:30 A.M. on
the date of this Agreement;

          (b)    at any time prior to the Closing Date if any of the following
has occurred: (i) since the effective date of the Registration Statement, any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole or the earnings, business affairs,
management or business prospects of the Company and its Subsidiaries taken as a
whole, whether or not arising in the ordinary course of business, (ii) any
outbreak of hostilities or other national or international

                                       17


calamity or crisis or change in economic or political conditions if the effect
of such outbreak, calamity, crisis or change on the financial markets of the
United States would, in your reasonable judgment, make the offering or delivery
of the Shares impracticable, (iii) suspension of trading in securities on the
NYSE or limitation on prices for securities on the NYSE, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your reasonable opinion materially and adversely affects or will materially or
adversely affect the business or operations of the Company and the Subsidiaries
taken as a whole, (v) declaration of a banking moratorium by either Federal or
New York State authorities or (vi) the taking of any action by any Federal,
state or local government or agency in respect of its monetary or fiscal affairs
which in your reasonable opinion has a material adverse effect on the securities
markets in the United States; or

          (c)    as provided in Sections 6 and 9 of this Agreement.

          This Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option Shares,
upon the occurrence at any time prior to the Option Closing Date of any of the
events described in subparagraph (b) above or as provided in Sections 6 and 9 of
this Agreement.

          12.    SUCCESSORS. This Agreement has been and is made solely for the
benefit of the Underwriters, the Company and their respective successors,
executors, administrators, heirs and assigns, and the officers, directors and
controlling persons referred to herein, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Shares merely because of such purchase.

          13.    INFORMATION PROVIDED BY UNDERWRITERS. The Company and the
Underwriters acknowledge and agree that the only information furnished or to be
furnished by any Underwriter to the Company for inclusion in any Prospectus or
the Registration Statement consists of the information set forth in the last
paragraph on the front cover page (insofar as such information relates to the
Underwriters), legends required by Item 502(d) of Regulation S-K and Regulation
M under the Act and the information under the caption "Underwriting" in the
Prospectus.

          14.    MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation made
by or on behalf of any Underwriter or controlling person thereof, or by or on
behalf of the Company or its directors or officers and (c) delivery of and
payment for the Shares under this Agreement.

          This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

                                       18


          This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.

                                       19


          If the foregoing letter is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.

                                                  Very truly yours,

                                                  WHITE MOUNTAINS
                                                  INSURANCE GROUP, LTD.,
                                                  By

                                                   ------
                                                  Name:
                                                  Title:

          The foregoing Underwriting Agreement is hereby confirmed and accepted
as of the date first above written.

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

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

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

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

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

By


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

                                       20


                                                                      SCHEDULE I

                            SCHEDULE OF UNDERWRITERS



                                                                 NUMBER OF
                                                                FIRM SHARES
                           UNDERWRITER                        TO BE PURCHASED
                           -----------                        ---------------
                                                            

                                                                  --------
          Total


                                       21


                                                                     SCHEDULE II

                                DISCLOSURE ITEMS


          15.  Material Subsidiaries

          16.  Liens, capitalization except for Subsidiary Stock

          17.  Pending Renewal applications

          18.  White Mountains Common Shares exceptions

          19.  [other]

                                       22


                                                                       EXHIBIT A

                                       23




                                                                     Exhibit 4.1

                           [Form of Senior Indenture]

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

                      WHITE MOUNTAINS INSURANCE GROUP, LTD.
                       [and FUND AMERICAN COMPANIES, INC.]

                                       and

                         BANK ONE, NATIONAL ASSOCIATION
                                     Trustee

                                SENIOR INDENTURE

                           Dated as of ________, 200_

                 Providing for Issuance of Securities in Series

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


                              CROSS-REFERENCE TABLE

  TIA                                                                  Indenture
SECTION                                                                 SECTION

310(a)(1)                                                              609
   (a)(2)                                                              609
   (a)(3)                                                              N.A.
   (a)(4)                                                              N.A.
      (b)                                                              608; 610
      (c)                                                              N.A.
   311(a)                                                              613
      (b)                                                              613
      (c)                                                              N.A.
   312(a)                                                              701
      (b)                                                              702
      (c)                                                              702
   313(a)                                                              703
   (b)(1)                                                              N.A.
   (b)(2)                                                              703
      (c)                                                              703
      (d)                                                              703
   314(a)                                                              704
      (b)                                                              N.A.
   (c)(1)                                                              102
   (c)(2)                                                              102
   (c)(3)                                                              N.A.
      (d)                                                              N.A.
      (e)                                                              102
   315(a)                                                              601
      (b)                                                              602
      (c)                                                              602
      (d)                                                              602
      (e)                                                              602
316(a)(last sentence)                                                  502
(a)(1)(A)                                                              512
(a)(1)(B)                                                              502
   (a)(2)                                                              N.A.
      (b)                                                              508
317(a)(1)                                                              503
   (a)(2)                                                              504
      (b)                                                              1003
   318(a)                                                              107
                           N.A. means Not Applicable.

- ----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.


                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

Recitals of the Company [and Guarantor]                                       1
Agreements of the Parties                                                     1

                                   ARTICLE ONE

             Definitions and Other Provisions of General Application

Section 101.   Definitions                                                    2
               Act                                                            2
               Affiliate                                                      2
               Authenticating Agent                                           3
               Board of Directors                                             3
               Board Resolution                                               3
               Business Day                                                   3
               Commission                                                     3
               Company                                                        3
               Company Request, Company Order and Company Consent             3
               Corporate Trust Office                                         3
               Debt                                                           4
               Defaulted Interest                                             4
               Depositary                                                     4
               Event of Default                                               4
               Global Security                                                4
               [Guarantee                                                     4]
               [Guarantor                                                     4]
               [Guarantor Request, Guarantor Order
                 and Guarantor Consent                                         ]
               [Guarantor Board of Directors                                  5]
               [Guarantor's Board Resolution                                  5]
               Holder                                                         5
               Indenture, this Indenture                                      5
               Interest                                                       5
               Interest Payment Date                                          5
               Lien                                                           5
               Maturity                                                       5
               Officers' Certificate                                          6
               Opinion of Counsel                                             6
               Original Issue Discount Security                               6
               Outstanding                                                    6
               Paying Agent                                                   7


                                                                               4


               Permitted Liens                                                7
               Person                                                         8
               Place of Payment                                               8
               Predecessor Securities                                         8

               Property                                                       8
               Redemption Date                                                9
               Redemption Price                                               9
               Regular Record Date                                            9
               Repayment Date                                                 9
               Repayment Price                                                9
               Responsible Officer                                            9
               Security or Securities                                         9
               Security Register                                              9
               Security Registrar                                             9
               Securityholder                                                 9
               Special Record Date                                           10
               Stated Maturity                                               10
               Subsidiary                                                    10
               Trust Indenture Act or TIA                                    10
               Trustee                                                       10
               U.S. Government Obligations                                   10
               Vice President                                                10
               Voting Stock                                                  11

Section 102.   Compliance Certificates and Opinions                          11
Section 103.   Form of Documents Delivered to Trustee                        11
Section 104.   Acts of Securityholders                                       12
Section 105.   Notices, etc., to Trustee[, Guarantor] and Company            14
Section 106.   Notices to Securityholders; Waiver                            14
Section 107.   Conflict with Trust Indenture Act                             15
Section 108.   Effect of Headings and Table of Contents                      15
Section 109.   Successors and Assigns                                        15
Section 110.   Separability Clause                                           15
Section 111.   Benefits of Indenture                                         15
Section 112.   Governing Law                                                 16
Section 113.   Counterparts                                                  16
Section 114.   Judgment Currency                                             16


                                                                               5


                                   ARTICLE TWO

                                 Security Forms

Section 201.   Forms Generally                                               17
Section 202.   Forms of Securities                                           17
Section 203.   Form of Trustee's Certificate of Authentication               18
Section 204.   Securities Issuable in the Form of a Global Security          18
[Section 205.  Form of Notation of Guarantee                                 20]

                                  ARTICLE THREE

                                 The Securities

Section 301.   General Title; General Limitations; Issuable in
                  Series; Terms of Particular Series                         21
Section 302.   Denominations                                                 25
Section 303.   Execution, Authentication and Delivery and Dating             25
Section 304.   Temporary Securities                                          27
Section 305.   Registration, Transfer and Exchange                           28
Section 306.   Mutilated, Destroyed, Lost and Stolen Securities              29
Section 307.   Payment of Interest; Interest Rights Preserved                30
Section 308.   Persons Deemed Owners                                         32
Section 309.   Cancellation                                                  32
Section 310.   Computation of Interest                                       32
Section 311.   Medium-Term Securities                                        32
Section 312.   CUSIP Numbers                                                 33
Section 313.   Global Securities                                             33

                                  ARTICLE FOUR

      Satisfaction and Discharge of Indenture; Defeasance; Unclaimed Moneys

Section 401.   Applicability of Article                                      35


                                                                               6


Section 402.   Satisfaction and Discharge of Indenture; Defeasance           35
Section 403.   Conditions of Defeasance                                      37
Section 404.   Application of Trust Money                                    39
Section 405.   Repayment to Company [or Guarantor]                           39
Section 406.   Indemnity for U.S. Government Obligations                     39
Section 407.   Reinstatement                                                 39

                                  ARTICLE FIVE

                                    Remedies

Section 501.   Events of Default                                             40
Section 502.   Acceleration of Maturity; Rescission and Annulment            42
Section 503.   Collection of Indebtedness and
                  Suits for Enforcement by Trustee                           43
Section 504.   Trustee May File Proofs of Claim                              45
Section 505.   Trustee May Enforce Claims Without Possession of
                  Securities                                                 45
Section 506.   Application of Money Collected                                46
Section 507.   Limitation on Suits                                           46
Section 508.   Unconditional Right of Securityholders to Receive
                  Principal, Premium and Interest                            47
Section 509.   Restoration of Rights and Remedies                            47
Section 510.   Rights and Remedies Cumulative                                48
Section 511.   Delay or Omission Not Waiver                                  48
Section 512.   Control by Securityholders                                    48
Section 513.   Waiver of Past Defaults                                       48
Section 514.   Undertaking for Costs                                         49
Section 515.   Waiver of Stay or Extension Laws                              49

                                   ARTICLE SIX

                                   The Trustee

Section 601.   Certain Duties and Responsibilities                           50
Section 602.   Notice of Defaults                                            51
Section 603.   Certain Rights of Trustee                                     52
Section 604.   Not Responsible for Recitals or Issuance of Securities        53


                                                                               7


Section 605.   May Hold Securities                                           53
Section 606.   Money Held in Trust                                           53
Section 607.   Compensation and Reimbursement                                54
Section 608.   Disqualification; Conflicting Interests                       54
Section 609.   Corporate Trustee Required; Eligibility                       55
Section 610.   Resignation and Removal; Appointment of Successor             55
Section 611.   Acceptance of Appointment by Successor                        57
Section 612.   Merger, Conversion, Consolidation or Succession to
                  Business                                                   58
Section 613.   Preferential Collection of Claims Against Company             58
Section 614.   Appointment of Authenticating Agent                           63

                                  ARTICLE SEVEN

     Securityholders' Lists and Reports by Trustee [, Guarantor] and Company

Section 701.   Company [and Guarantor] to Furnish Trustee Names and
                  Addresses of Securityholders                               65
Section 702.   Preservation of Information; Communications to
                  Securityholders                                            66
Section 703.   Reports by Trustee                                            67
Section 704.   Reports by Company [and Guarantor]                            69

                                  ARTICLE EIGHT

           Consolidation, Amalgamation, Merger, Conveyance or Transfer

Section 801.   Company May Consolidate, etc., only on Certain Terms          70
Section 802.   Successor Person Substituted for Company                      71
[Section 803.  Guarantor May Consolidate, etc. only on Certain Terms         71]
[Section 804.  Successor Person Substituted for Guarantor                    72]


                                                                               8


                                  ARTICLE NINE

                             Supplemental Indentures

Section 901.   Supplemental Indentures Without Consent of
                  Securityholders                                            72
Section 902.   Supplemental Indentures with Consent of
                  Securityholders                                            73
Section 903.   Execution of Supplemental Indentures                          75
Section 904.   Effect of Supplemental Indentures                             75
Section 905.   Conformity with Trust Indenture Act                           75
Section 906.   Reference in Securities to Supplemental Indentures            75

                                   ARTICLE TEN

                                    Covenants

Section 1001.  Payment of Principal, Premium and Interest                    76
Section 1002.  Maintenance of Office or Agency                               76
Section 1003.  Money for Security Payments to Be Held in Trust               76
Section 1004.  Statement as to Compliance                                    78
Section 1005.  Corporate Existence                                           78
Section 1006.  Limitation on Liens                                           79
Section 1007.  Limitation on Sale and Leaseback Transactions                 80
Section 1008.  Waiver of Certain Covenants                                   80

                                 ARTICLE ELEVEN

                            Redemption of Securities

Section 1101.  Applicability of Article                                      81
Section 1102.  Election to Redeem; Notice to Trustee                         81
Section 1103.  Selection by Trustee of Securities to Be Redeemed             82
Section 1104.  Notice of Redemption                                          82
Section 1105.  Deposit of Redemption Price                                   83
Section 1106.  Securities Payable on Redemption Date                         83
Section 1107.  Securities Redeemed in Part                                   84


                                                                               9


Section 1108.  Provisions with Respect to any Sinking Funds                  84

                                 ARTICLE TWELVE

                            [Guarantee of Securities]

[Section 1201. Guarantee                                                     86]
[Section 1202. Execution of Notations of Guarantee                           87]


                                                                              10


[To be modified as appropriate for issuances of securities by White Mountains
Insurance Group, Ltd. or issuances of securities by Fund American Companies,
Inc. which will be guaranteed by White Mountains Insurance Group, Ltd.]

                                    [Form of]

                        SENIOR INDENTURE (this "Indenture") between WHITE
                  MOUNTAINS INSURANCE GROUP, LTD. a company existing under the
                  laws of Bermuda (the ["Company"] ["Guarantor"]) having its
                  principal office at 80 South Main Street, Hanover, New
                  Hampshire 03755-2053, [FUND AMERICAN COMPANIES, INC., a
                  Delaware corporation (the "Company") having its principal
                  office at One Beacon Street, Boston, Massachusetts
                  02108-3100], and BANK ONE, NATIONAL ASSOCIATION, trustee
                  (hereinafter called the "Trustee"), is made and entered into
                  as of this __  day of ________, 200_.

            Recitals of the Company [and the Guarantor]

            The Company [and the Guarantor each] has duly authorized the
execution and delivery of this Indenture to provide for [in the case of the
Company,] the issuance of [, and in the case of the Guarantor, the guarantee
of,] the Company debentures, notes, bonds or other evidences of indebtedness, to
be issued in one or more fully registered series.

            All things necessary to make this Indenture a valid agreement of
[each of] the Company [and the Guarantor], in accordance with its terms, have
been done.

                            Agreements of the Parties

            To set forth or to provide for the establishment


                                                                              11


of the terms and conditions upon which the Securities are and are to be
authenticated, issued and delivered, and in consideration of the premises and
the purchase of Securities by the Holders thereof, it is mutually covenanted and
agreed as follows, for the equal and proportionate benefit of all Holders of the
Securities or of a series thereof, as the case may be:

                                   ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

            Section 101. DEFINITIONS. For all purposes of this Indenture and of
any indenture supplemental hereto, 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 or by Commission rule under 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 in the United States of America at the date of such
      computation;

            (4) all references in this instrument to designated "Articles",
      "Sections" and other subdivisions are to the designated Articles, Sections


                                                                              12


      and other subdivisions of this instrument as originally executed. 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; and

            (5) "including" and words of similar import shall be deemed to be
      followed by "without limitation".

            Certain terms, used principally in Article Six, are defined in that
Article.

            "Act", when used with respect to any Security- 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 to
authenticate Securities under Section 614.

            "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 and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

            "Business Day" means each day which is neither a Saturday, Sunday or
other day on which banking institutions in the pertinent Place or Places of
Payment are authorized


                                                                              13


or required by law or executive order to be closed.

            "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.

            "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor replaces it and, thereafter,
"Company" shall mean the successor and, for purposes of any provision contained
herein and required by the TIA, each other obligor on the Securities.

            "Company Request", "Company Order" and "Company Consent" mean,
respectively, a written request, order or consent signed in the name of the
Company by its Chairman of the Board, President or a Vice President, and by its
Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.

            "Corporate Trust Office" means the principal office of the Trustee
in [         ] at which at any particular time its corporate trust business
shall be principally administered, which office at the date hereof is located at
[         ], except that with respect to the presentation of Securities for
payment or for registration of transfer and exchange, such term shall mean the
office or the agency of the Trustee in said city at which at any particular time
its corporate agency business shall be conducted, which office at the date
hereof is located at [         ].

            "Debt" means indebtedness for money borrowed.

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

            "Depositary" means, unless otherwise specified by the Company
pursuant to either Section 204 or 301, with respect to Securities of any series
issuable or issued as a


                                                                              14


Global Security, The Depository Trust Company, New York, New York, or any
successor thereto registered as a clearing agency under the Securities Exchange
Act of 1934, as amended, or other applicable statute or regulation.

            "Event of Default" has the meaning specified in Article Five.

            "Global Security" means with respect to any series of Securities
issued hereunder, a Security which is executed by the Company and authenticated
and delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Indenture and an indenture supplemental
hereto, if any, or Board Resolution and pursuant to a Company Request, which
shall be registered in the name of the Depositary or its nominee and which shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all of the Outstanding Securities of such series or any
portion thereof, in either case having the same terms, including, without
limitation, the same original issue date, date or dates on which principal is
due, and interest rate or method of determining interest.

            ["Guarantee" means the irrevocable and unconditional guarantee by
the Guarantor of any Security of any series of the Company authenticated and
delivered pursuant to Article Twelve.]

            ["Guarantor" means the Person named as the "Guarantor" in the first
paragraph of this instrument until a successor replaces it and, thereafter,
"Guarantor" shall mean the successor.]

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

            ["Guarantor's Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Guarantor to have
been duly adopted by the Guarantor Board of Directors.]


                                                                              15


            ["Guarantor Request", "Guarantor Order", "Guarantor Consent" means,
respectively, a written request, order or consent signed in the name of the
Guarantor by its Chairman of the Board, President or a Vice President, and by
its Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.]

            "Holder", when used with respect to any Security, means a
Securityholder.

            "Indenture" or "this 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 particular series of Securities
established as contemplated by Section 301.

            "Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

            "Interest Payment Date", when used with respect to any series of
Securities, means the Stated Maturity of any installment of interest on those
Securities.

            "Lien" means any mortgage, pledge, security interest, encumbrance,
charge or security interest of any kind.

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

            "Officers' Certificate" means[, with respect to the Company or the
Guarantor,] a certificate signed by the Chairman of the Board, the President or
a Vice President, and by the Treasurer, an Assistant Treasurer, the Controller,
an Assistant Controller, the Secretary or an Assistant Secretary of the Company
[or the Guarantor, as the case may be], and delivered to the Trustee. Wherever
this


                                                                              16


Indenture requires that an Officers' Certificate be signed also by an engineer
or an accountant or other expert, such engineer, accountant or other expert
(except as otherwise expressly provided in this Indenture) may be in the employ
of the Company [or the Guarantor, as the case may be], and shall be acceptable
to the Trustee.

            "Opinion of Counsel" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be an employee of or
of counsel to the Company [or the Guarantor]. Such counsel shall be acceptable
to the Trustee, whose acceptance shall not be unreasonably withheld.

            "Original Issue Discount Security" means (i) 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, and (ii) any
other Security deemed an Original Issue Discount Security for United States
Federal income tax purposes.

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

            (i) such Securities theretofore canceled by the Trustee or delivered
      to the Trustee for cancellation;

            (ii) such Securities for whose payment or redemption 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 therefor satisfactory
      to the Trustee has been made; and

            (iii) such Securities in exchange for or in lieu of which other
      Securities have been authenticated and delivered pursuant to this
      Indenture, or which shall have been paid pursuant to the terms of Section
      306


                                                                              17


      (except with respect to any such Security as to which proof satisfactory
      to the Trustee is presented that such Security is held by a person in
      whose hands such Security is a legal, valid and binding obligation of the
      Company).

In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, (i) the principal amount of any Original
Issue Discount Security that shall be deemed to be Outstanding shall be the
amount of the principal thereof that would be due and payable as of the date of
the taking of such action upon a declaration of acceleration of the Maturity
thereof and (ii) Securities 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. In determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer assigned to the corporate trust department of the Trustee knows to be
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or such other obligor 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
to act as owner 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.

            "Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.

            "Permitted Liens" means (i) any Lien upon Property to secure any
part of the cost of development, construction, alteration, repair or improvement
of such Property, or Debt incurred to finance such cost; (ii) any extension,
renewal or replacement, in whole or in part, of any Lien referred to in the
foregoing clause (i); (iii) any Lien relating to a sale and leaseback
transaction permitted by Section 1007 (other than by operation of this clause
(iii) of this definition); (iv) any Lien in favor of the Company[, the


                                                                              18


Guarantor] or any Subsidiary granted by the Company[, the Guarantor] or any
Subsidiary in order to secure any intercompany obligations; (v) mechanic's,
materialmen's, carriers' or other like Liens arising in the ordinary course of
business (including construction of facilities) in respect of obligations which
are not due or which are being contested in good faith: (vi) any Lien arising in
connection with any legal proceeding which is being contested; (vii) Liens for
taxes not yet subject to penalties for non-payment or which are being contested
in good faith by appropriate proceedings; (viii) minor survey exceptions, minor
encumbrances, easements or reservations of, or rights of others for, licenses,
rights-of-way, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions as to the use of real property
or Liens incidental to the conduct of the business of such Person or to the
ownership of its properties which were not incurred in connection with Debt and
which do not in the aggregate materially adversely affect the value of said
properties or materially impair their use in the operation of the business of
such Person; (ix) pledges or deposits under workers' compensation laws,
unemployment insurance laws or similar social security legislation; (x) any
deposit to secure performance of letters of credit, bids, leases, statutory
obligations, surety and appeal bonds, performance bonds or other obligations of
a like nature in the ordinary course of business; (xi) any interest or title of
a lessor under any lease entered into in the ordinary course of business; and
(xii) Liens on assets of any Subsidiary which is required to be licensed as an
insurer or reinsurer (or any Subsidiary of such Subsidiary) securing Debt
incurred to provide short-term liquidity to facilitate claims payments in the
event of catastrophe.

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

            "Place of Payment" means with respect to any


                                                                              19


series of Securities issued hereunder the city or political subdivision so
designated with respect to the series of Securities in question in accordance
with the provisions of Section 301.

            "Predecessor Securities" 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.

            "Property" means any property of any kind whatsoever, whether real,
personal or mixed and whether tangible or intangible.

            "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 specified in the Security at which it is to be
redeemed pursuant to this Indenture.

            "Regular Record Date" for the interest payable on any Security on
any Interest Payment Date means the date specified in such Security as the
Regular Record Date.

            "Repayment Date", when used with respect to any Security to be
repaid, means the date fixed for such repayment pursuant to such Security.

            "Repayment Price", when used with respect to any Security to be
repaid, means the price at which it is to be repaid pursuant to such Security.

            "Responsible Officer", when used with respect to the Trustee, means
the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
senior trust officer or


                                                                              20


trust officer, the controller and any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.

            "Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, of any series authenticated and delivered from time to time under this
Indenture.

            "Security Register" shall have the meaning specified in Section 305.

            "Security Registrar" means the Person who keeps the Security
Register specified in Section 305.

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

            "Special Record Date" for the payment of any Defaulted Interest (as
defined in Section 307) 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.

            "Subsidiary" of any specified Person means any corporation, limited
liability company, limited or general partnership, business trust or other
business entity at least a majority of whose outstanding Voting Stock shall at
the time be owned, directly or indirectly, by the specified Person or by one or
more of its Subsidiaries, or both.

            "Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended by the Trust Indenture


                                                                              21


Reform Act of 1990, as in force at the date as of which this instrument was
executed except as provided in Section 905.

            "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 and include each Person who is then a Trustee hereunder.

            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.

            "U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (y) 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 as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof.

            "Vice President" when used with respect to [the Guarantor,] the
Company or the Trustee means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president",
including, without limitation, an assistant vice president.

            "Voting Stock", as applied to the stock of any Person, means stock
of any class or classes (however designated) having by the terms thereof
ordinary voting power to elect a majority of the members of the board of
directors (or other governing body) of such Person other than stock having such
power only by reason of the happening of a contingency.

            Section 102. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any
application or request by the Company


                                                                              22


[or the Guarantor] to the Trustee to take any action under any provision of this
Indenture, the Company [or the Guarantor, as applicable,] shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
Counsel all such conditions precedent, 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 (except for the written
statement required by 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


                                                                              23


with respect to some matters and one or more other such Persons as to the 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 [or the
Guarantor] 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 of the
Company [or the Guarantor, as the case may be,] stating that the information
with respect to such factual matters is in the possession of the Company [or the
Guarantor, as the case may be], 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 SECURITYHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Securityholders or Securityholders of any
series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders 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 [or the Guarantor or both of them]. If any Securities are denominated in
coin or currency other than that of the United States, then for


                                                                              24


the purposes of determining whether the Holders of the requisite principal
amount of Securities have taken any action as herein described, the principal
amount of such Securities shall be deemed to be that amount of United States
dollars that could be obtained for such principal amount on the basis of the
spot rate of exchange into United States dollars for the currency in which such
Securities are denominated (as evidenced to the Trustee by an Officers'
Certificate) as of the date the taking of such action by the Holders of such
requisite principal amount is evidenced to the Trustee as provided in the
immediately preceding sentence. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders 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[, the Guarantor] and 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 to such
execution or by the 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 an officer of a corporation or a member of a partnership, on
behalf of such corporation or partnership, 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 the Trustee
deems sufficient.

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

            (d) If the Company [or the Guarantor] shall solicit from the Holders
any request, demand, authorization, direction, notice, consent, waiver or other
action, the Company [or the Guarantor, as the case may be,] may, at its option,
by Board Resolution [or Guarantor's Board Resolution, as applicable], fix in
advance a record date for


                                                                              25


the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action, but the
Company [or the Guarantor, as the case may be,] shall have no obligation to do
so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action may be given before or after
the record date, but only the Holders of record at the close of business on the
record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of Securities Outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
Securities Outstanding shall be computed as of the record date; provided that no
such authorization, agreement or consent by the Holders on the record date shall
be deemed effective unless it shall become effective pursuant to the provisions
of this Indenture not later than six months after the record date.

            (e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind 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 [or the Guarantor] in reliance thereon whether or not notation of
such action is made upon such Security.

            Section 105. NOTICES, ETC., TO TRUSTEE[, GUARANTOR] AND COMPANY. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Securityholders 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 Securityholder or by the Company [or the
      Guarantor] 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

            (2) the Company [or the Guarantor] by the Trustee


                                                                              26


      or by any Securityholder shall be sufficient for every purpose hereunder
      (except as provided in Section 501(4) or, in the case of a request for
      repayment, as specified in the Security carrying the right to repayment)
      if in writing and mailed, first-class postage prepaid, to the Company [or
      the Guarantor, as the case may be,] 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 [or the Guarantor, as the case may be,].

            Section 106. NOTICES TO SECURITYHOLDERS; WAIVER. Where this
Indenture or any Security provides for notice to Securityholders of any event,
such notice shall be sufficiently given (unless otherwise herein or in such
Security expressly provided) if in writing and mailed, first-class postage
prepaid, to each Securityholder affected by such event, at his address as it
appears in the Security 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 Securityholders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Securityholder shall affect the sufficiency of such notice with respect to other
Securityholders. Where this Indenture or any Security 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 Securityholders 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 as a
result of a strike, work stoppage or otherwise, it shall be impractical to mail
notice of any event to any Securityholder when such notice is required to be
given pursuant to any provision of this Indenture, then any method of
notification as shall be satisfactory to the Trustee[, the Guarantor] and the
Company shall be deemed to be a sufficient giving of such notice.

            Section 107. CONFLICT WITH TRUST INDENTURE ACT.


                                                                              27


If any provision hereof limits, qualifies or conflicts with the duties imposed
by any of Sections 310 to 317, inclusive, of the Trust Indenture Act through the
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 [each of] the Company [and the Guarantor] 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
any Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Authenticating Agent or
Paying Agent, the Security Registrar and the Holders of Securities (or such of
them as may be affected thereby), any benefit or any legal or equitable right,
remedy or claim under this Indenture.

            Section 112. GOVERNING LAW. This Indenture shall be construed in
accordance with and governed by the laws of the State of New York.

            Section 113. COUNTERPARTS. 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.

            Section 114. JUDGMENT CURRENCY. The Company [and the Guarantor each]
agrees, to the fullest extent that it


                                                                              28


may effectively do so under applicable law, that (a) if for the purpose of
obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of, or premium or interest, if any, on the Securities
of any series (the "Required Currency") into a currency in which a judgment will
be rendered (the "Judgment Currency"), the rate of exchange used shall be the
rate at which in accordance with normal banking procedures the Trustee could
purchase in New York City the Required Currency with the Judgment Currency on
the Banking Day (as defined below) immediately preceding the date on which final
unappealable judgment is given and (b) its obligations under this Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, or any recovery pursuant to any judgment (whether or not entered
in accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other
sum due under this Indenture. For purposes of the foregoing, "Banking Day" means
any day except a Saturday, Sunday or a legal holiday in New York City or a day
on which banking institutions in New York City are authorized or required by law
or executive order to close.

                                   ARTICLE TWO

                                 SECURITY FORMS

            Section 201. FORMS GENERALLY. The Securities shall have 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 laws or regulations or with the
rules of any securities exchange, or as may, consistently herewith, be


                                                                              29


determined by the officers executing such Securities, as evidenced by their
execution of the Securities. Any portion of the text of any Security may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Security.

            The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods on steel engraved borders or may
be produced in any other manner, all as determined by the officers executing
such Securities, as evidenced by their execution of such Securities, subject,
with respect to the Securities of any series, to the rules of any securities
exchange on which such Securities are listed.

            Section 202. FORMS OF SECURITIES. Each Security shall be in one of
the forms approved from time to time by or pursuant to a Board Resolution, or
established in one or more indentures supplemental hereto. Prior to the delivery
of a Security to the Trustee for authentication in any form approved by or
pursuant to a Board Resolution, the Company shall deliver to the Trustee the
Board Resolution by or pursuant to which such form of Security has been
approved, which Board Resolution shall have attached thereto a true and correct
copy of the form of Security which has been approved thereby or, if a Board
Resolution authorizes a specific officer or officers to approve a form of
Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form or a
certificate signed by a Responsible Officer of the Trustee and delivered to the
Company.

            [Each Security shall bear a notation of Guarantee in substantially
the form set forth in Section 205. Notwithstanding the foregoing, the notation
of Guarantee to be endorsed on the Securities of any series may have such
appropriate insertions, omissions, substitutions and other corrections from the
form thereof referred to above as are required or permitted by this Indenture
and may have such


                                                                              30


letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers delivering the same, in each case as evidenced by such delivery.]

            Section 203. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
form of Trustee's Certificate of Authentication for any Security issued pursuant
to this Indenture shall be substantially as follows:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

                                          [           ],
                                           as Trustee,


Dated:_________________________________   By:___________________________________
                                                            Authorized Signatory

            Section 204. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.
(a) If the Company shall establish pursuant to Sections 202 and 301 that the
Securities of a particular series are to be issued in whole or in part in the
form of one or more Global Securities, then the Company shall execute and the
Trustee or its agent shall, in accordance with Section 303 and the Company
Request delivered to the Trustee or its agent thereunder, authenticate and
deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Securities of such series to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
a Company Request, (ii) shall be registered in the name of the Depositary for
such Global Security or Securities or its nominee, (iii) shall be delivered by
the Trustee or its agent to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to


                                                                              31


the following effect: "Unless and until it is exchanged in whole or in part for
the individual Securities represented hereby, this Global Security may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary."

            (b) Notwithstanding any other provisions of this Section 204 or of
Section 305, and subject to the provisions of paragraph (c) below, unless the
terms of a Global Security expressly permit such Global Security to be exchanged
in whole or in part for individual Securities, a Global Security may be
transferred, in whole but not in part and in the manner provided in Section 305,
only to a nominee of the Depositary for such Global Security, or to the
Depositary, or a successor Depositary for such Global Security selected or
approved by the Company, or to a nominee of such successor Depositary.

            (c) (i) If at any time the Depositary for a Global Security notifies
the Company that it is unwilling or unable to continue as Depositary for such
Global Security or if at any time the Depositary for the Securities for such
series ceases to be a clearing agency registered under the Securities Exchange
Act of 1934, as amended, or other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to such Global Security. If a
successor Depositary for such Global Security 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 or its agent, upon
receipt of a Company Request for the authentication and delivery of individual
Securities of such series in exchange for such Global Security, will
authenticate and deliver, individual Securities of such series of like tenor and
terms in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security.

      (ii) The Company may at any time and in its sole


                                                                              32


discretion determine that the Securities of any series or portion thereof issued
or issuable 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 Request for the
authentication and delivery of individual Securities of such series in exchange
in whole or in part for such Global Security, will authenticate and deliver
individual Securities of such series of like tenor and terms in definitive form
in an aggregate principal amount equal to the principal amount of such Global
Security or Securities representing such series or portion thereof in exchange
for such Global Security or Securities.

      (iii) If specified by the Company pursuant to Sections 202 and 301 with
respect to Securities issued or issuable in the form of a Global Security, the
Depositary for such Global Security may surrender such Global Security in
exchange in whole or in part for individual Securities of such series of like
tenor and terms in definitive form on such terms as are acceptable to the
Company and such Depositary. Thereupon the Company shall execute, and the
Trustee or its agent shall authenticate and deliver, without service charge, (1)
to each Person specified by such Depositary a new Security or Securities of the
same series of like tenor and terms and 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 of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal amount of
the surrendered Global Security and the aggregate principal amount of Securities
delivered to the Holders thereof.

      (iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Securities in definitive registered form in
authorized denominations. Upon the exchange of the entire principal amount of a
Global Security for individual Securities, such Global Security shall be
canceled by the Trustee or its agent. Except as provided in the preceding
paragraph, Securities issued in exchange for a Global Security pursuant to this
Section shall be registered in


                                                                              33


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 or the Security Registrar.
The Trustee or the Security Registrar shall deliver such Securities to the
Persons in whose names such Securities are so registered.

            [SECTION 205. FORM OF NOTATION OF GUARANTEE. The form of notation of
Guarantee to be endorsed on any Security issued pursuant to this Indenture shall
be substantially as follows:

                              NOTATION OF GUARANTEE

            White Mountains Insurance Group, Ltd., a company existing under the
law of Bermuda (the "Guarantor", which term includes any successor thereto under
the Indenture (the "Indenture") referred to in the Security on which this
notation is endorsed) has unconditionally guaranteed, pursuant to the terms of
the Guarantee contained in Article Twelve of the Indenture, the due and punctual
payment of the principal of and any premium and interest on this Security, when
and as the same shall become due and payable, whether at the Stated Maturity, by
declaration of acceleration, call for redemption, early repayment or otherwise,
in accordance with the terms of this Security and the Indenture.

            The obligations of the Guarantor to the Holders of the Securities
and to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth in Article Twelve of the Indenture, and reference is hereby made to such
Article and Indenture for the precise terms of the Guarantee.

            The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Security upon which this notation of
the Guarantee is endorsed shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized signatories.


                                                                              34


                                    WHITE MOUNTAINS INSURANCE GROUP, LTD.

                                    by
                                          ______________________________________
                                          Name:
                                          Title:]

                                  ARTICLE THREE

                                 THE SECURITIES

            Section 301. GENERAL TITLE; GENERAL LIMITATIONS; ISSUABLE IN SERIES;
TERMS OF PARTICULAR SERIES. The aggregate principal amount of Securities which
may be authenticated and delivered and Outstanding under this Indenture is not
limited.

            The Securities may be issued in one or more series up to an
aggregate principal amount of Securities as from time to time may be authorized
by the Board of Directors. All Securities of each series under this Indenture
shall in all respects be equally and ratably entitled to the benefits hereof
with respect to such series without preference, priority or distinction on
account of the actual time of the authentication and delivery or Stated Maturity
of the Securities of such series.

            Each series of Securities shall be created either by or pursuant to
a Board Resolution or by or pursuant to an indenture supplemental hereto. The
Securities of each such series may bear such date or dates, be payable at such
place or places, have such Stated Maturity or Maturities, be issuable at such
premium over or discount from their face value, bear interest at such rate or
rates (which may be fixed or floating), from such date or dates, payable in such
installments and on such dates and at such place or places to the Holders of
Securities registered as such on such Regular Record Dates, or may bear no
interest, and may be redeemable or repayable at such Redemption Price or Prices
or Repayment Price or Prices, as the case may be, whether at the option of the
Holder or otherwise, and upon such terms, all as shall be provided for in or
pursuant to the Board


                                                                              35


Resolution or in or pursuant to the supplemental indenture creating that series.
There may also be established in or pursuant to a Board Resolution or in or
pursuant to a supplemental indenture prior to the issuance of Securities of each
such series, provision for:

            (1) the exchange or conversion of the Securities of that series, at
      the option of the Holders thereof, for or into new Securities of a
      different series or other securities or other property of the Company[,
      the Guarantor] or another Person, including shares of common stock,
      preferred stock, indebtedness or securities of any kind of the Company[,
      the Guarantor], any Subsidiary of the Company [or of the Guarantor] or of
      any other Person or securities directly or indirectly convertible into or
      exchangeable for any such securities;

            (2) a sinking or purchase fund or other analogous obligation;

            (3) if other than U.S. dollars, the currency or currencies or units
      based on or related to currencies (including European Currency Units) in
      which the Securities of such series shall be denominated and in which
      payments of principal of, and any premium and interest on, such Securities
      shall or may be payable;

            (4) if the principal of (and premium, if any) or interest, if any,
      on the Securities of such series are to be payable, at the election of the
      Company or a holder thereof, in a currency or currencies or units based on
      or related to currencies (including European Currency Units) other than
      that in which the Securities are stated to be payable, the period or
      periods within which, and the terms and conditions upon which, such
      election may be made;

            (5) if the amount of payments of principal of (and premium, if any)
      or interest, if any, on the Securities of such series may be determined
      with reference to an index based on (i) a currency or currencies or units


                                                                              36


      based on or related to currencies (including European Currency Units)
      other than that in which the Securities are stated to be payable, (ii)
      changes in the price of one or more other securities or groups or indexes
      of securities or (iii) changes in the prices of one or more commodities or
      groups or indexes of commodities, or any combination of the foregoing, the
      manner in which such amounts shall be determined;

            (6) if the aggregate principal amount of the Securities of that
      series is to be limited, such limitations, and the maturity date of the
      principal amount of the Securities of that series (which may be fixed or
      extendible), and the rate or rates (which may be fixed or floating) per
      annum at which the Securities of the series will bear interest, if any, or
      the method of determining such rate or rates, and the payment dates and
      record dates relating to such interest payments;

            (7) the exchange of Securities of that series, at the option of the
      Holders thereof, for other Securities of the same series of the same
      aggregate principal amount of a different authorized kind or different
      authorized denomination or denominations, or both;

            (8) the appointment by the Trustee of an Authenticating Agent in one
      or more places other than the location of the office of the Trustee with
      power to act on behalf of the Trustee and subject to its direction in the
      authentication and delivery of the Securities of any one or more series in
      connection with such transactions as shall be specified in the provisions
      of this Indenture or in or pursuant to the Board Resolution or the
      supplemental indenture creating such series;

            (9) the percentage of their principal amount at which such
      securities will be issued, and the portion of the principal amount of
      securities of the series, if other than the total principal amount
      thereof, which shall be payable upon declaration of acceleration of the
      Maturity thereof pursuant to Section 502 or provable in bankruptcy
      pursuant to Section 504;

            (10) any Event of Default with respect to the


                                       37


      Securities of such series, if not set forth herein and any additions,
      deletions or other changes to the Events of Default set forth herein that
      shall be applicable to the Securities of such series (including a
      provision making any Event of Default set forth herein inapplicable to the
      Securities of that series);

            (11) any covenant solely for the benefit of the Securities of such
      series and any additions, deletions or other changes to the provisions of
      Article Ten or any definitions relating to such Article that shall be
      applicable to the Securities of such series (including a provision making
      any Section of such Article inapplicable to the Securities of such
      series);

            (12) the applicability of Section 402(b) of this Indenture to the
      Securities of such series;

            (13) if the Securities of the series shall be issued in whole or in
      part in the form of a Global Security or Global Securities, the terms and
      conditions, if any, upon which such Global Security or Global Securities
      may be exchanged in whole or in part for other individual Securities; and
      the Depositary for such Global Security or Global Securities (if other
      than the Depositary specified in Section 101 hereof);

            (14) the subordination of the Securities of such series to any other
      indebtedness of the Company [and the Guarantor], including without
      limitation, the Securities of any other series; and

            (15) any other terms of the series, which shall not be inconsistent
      with the provisions of this Indenture, all upon such terms as may be
      determined in or pursuant to a Board Resolution or in or pursuant to a
      supplemental indenture with respect to such series. All Securities of the
      same series shall be substantially identical in tenor and effect, except
      as to denomination.

            The form of the Securities of each series shall be established
pursuant to the provisions of this Indenture in or pursuant to the Board
Resolution or in or pursuant to the supplemental indenture creating such series.
The Securities of each series shall be distinguished from the Securities of each
other series in such manner, reasonably satisfactory to


                                                                              38


the Trustee, as the Board of Directors may determine.

            Unless otherwise provided with respect to Securities of a particular
series, the Securities of any series may only be issuable in registered form,
without coupons.

            Any terms or provisions in respect of the Securities of any series
issued under this Indenture may be determined pursuant to this Section by
providing in a Board Resolution or supplemental indenture for the method by
which such terms or provisions shall be determined.

            Section 302. DENOMINATIONS. The Securities of each series shall be
issuable in such denominations and currency as shall be provided in the
provisions of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such series. In the absence of any such
provisions with respect to the Securities of any series, the Securities of that
series shall be issuable only in fully registered form in denominations of
$1,000 and any integral multiple thereof.

            Section 303. EXECUTION, AUTHENTICATION AND DELIVERY AND DATING. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President, one of its Vice Presidents or its Treasurer. 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; and make available for the Trustee


                                                                              39


shall, upon Company Order, authenticate and delivery such Securities as in this
Indenture provided and not otherwise.

            Prior to any such authentication and delivery, the Trustee shall be
entitled to receive, in addition to any Officers' Certificate and Opinion of
Counsel required to be furnished to the Trustee pursuant to Section 102, and the
Board Resolution and any certificate relating to the issuance of the series of
Securities required to be furnished pursuant to Section 202, an Opinion of
Counsel stating that:

            (1) all instruments furnished to the Trustee conform to the
      requirements of the Indenture and constitute sufficient authority
      hereunder for the Trustee to authenticate and deliver such Securities;

            (2) the form and terms (or in connection with the issuance of
      medium-term Securities under Section 311, the manner of determining the
      terms) of such Securities have been established in conformity with the
      provisions of this Indenture;

            (3) all laws and requirements with respect to the execution and
      delivery by the Company of such Securities have been complied with, the
      Company has the corporate power to issue such Securities and such
      Securities have been duly authorized and delivered by the Company and,
      assuming due authentication and delivery by the Trustee, constitute legal,
      valid and binding obligations of the Company enforceable in accordance
      with their terms (subject, as to enforcement of remedies, to applicable
      bankruptcy, reorganization, insolvency, moratorium or other laws and legal
      principles affecting creditors' rights generally from time to time in
      effect and to general equitable principles, whether applied in an action
      at law or in equity) and entitled to the benefits of this Indenture,
      equally and ratably with all other Securities, if any, of such series
      Outstanding; and

            (4) such other matters as the Trustee may reasonably request;

and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental


                                                                              40


hereto, also stating that all laws and requirements with respect to the form and
execution by the Company of the supplemental indenture with respect to that
series of Securities have been complied with, the Company has corporate power
to execute and deliver any such supplemental indenture and has taken all
necessary corporate action for those purposes and any such supplemental
indenture has been executed and delivered and constitutes the legal, valid and
binding obligation of the Company enforceable in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws and legal principles
affecting creditors' rights generally from time to time in effect and to general
equitable principles, whether applied in an action at law or in equity).

            The Trustee shall not be required to authenticate such Securities if
the issue thereof will adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture.

            Unless otherwise provided in the form of Security for any series,
all Securities shall be dated the date of their 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 manual signature of an authorized signatory, 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 receipt
of the documents required by Section 303, together with a Company Order, the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination,


                                                                              41


substantially of the tenor of the definitive Securities 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
of such series shall be exchangeable for definitive Securities of such series
upon surrender of the temporary Securities of such series at the office or
agency of the Company in a Place of Payment, without charge to the Holder; and
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 such series of
authorized denominations and of like tenor and terms. Until so exchanged the
temporary Securities of such series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series.

            Section 305. REGISTRATION, TRANSFER AND EXCHANGE. The Company shall
keep or cause to be kept a register (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, or of
Securities of a particular series, and for transfers of Securities or of
Securities of such series. Any such register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time. At all reasonable times the information contained in such register or
registers shall be available for inspection by the Trustee at the office or
agency to be maintained by the Company as provided in Section 1002.

            Subject to Section 204, upon surrender for transfer of any Security
of any series at the office or agency of the Company in a Place of Payment, the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or transferees, one or more
new Securities of such series of any authorized denominations, of a like
aggregate principal amount and Stated Maturity and of like


                                                                              42


tenor and terms.

            Subject to Section 204, at the option of the Holder, Securities of
any series may be exchanged for other Securities of such series of any
authorized denominations, of a like aggregate principal amount and Stated
Maturity and of like tenor and 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
make available for delivery, the Securities which the Securityholder 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 [and the Guarantor], 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 Trustee) 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.

            Unless otherwise provided in the Security to be transferred or
exchanged, no service charge shall be made on any Securityholder for any
transfer or exchange of Securities, but the Company may (unless otherwise
provided in such Security) require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any transfer
or exchange of Securities, other than exchanges pursuant to Section 304 or 906
not involving any transfer.

            The Company shall not be required (i) 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 the mailing of a notice of redemption of Securities of
such series selected for redemption under Section 1103 and ending at the close
of business on the date


                                                                              43


of such mailing, or (ii) to transfer or exchange any Security so selected for
redemption in whole or in part, except for the portion of such Security not so
selected for redemption.

            None of the Company, [the Guarantor,] the Trustee, any agent of the
Trustee, any Paying Agent or the Security Registrar 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 for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.

            The Company initially appoints the Trustee to act as Security
Registrar for the Securities on its behalf. The Company may at any time and from
time to time authorize any Person to act as Security Registrar in place of the
Trustee with respect to any series of Securities issued under this Indenture.

            Section 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If
(i) any mutilated Security is surrendered to the Trustee, or the Company[, the
Guarantor] and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and (ii) there is delivered to the
Company[, the Guarantor] and the Trustee 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[, the Guarantor] or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Security, a new Security of
like tenor, series, Stated Maturity and principal amount, 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


                                                                              44


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 [and the Guarantor], 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 of the same series 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. Unless
otherwise provided with respect to such Security pursuant to Section 301,
interest on any Security 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.

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

            (1) The Company [or the Guarantor] may elect to make payment of any
      Defaulted Interest to the Persons in whose names any such Securities (or
      their respective Predecessor Securities) are registered at the close of
      business on a Special Record Date for the payment of


                                                                              45


      such Defaulted Interest, which shall be fixed in the following manner. The
      Company [or the Guarantor, as the case may be,] shall notify the Trustee
      in writing of the amount of Defaulted Interest proposed to be paid on each
      such Security and the date of the proposed payment, and at the same time
      the Company [or the Guarantor, as the case may be,] 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 nor
      less than 10 days prior to the date of the proposed payment and not less
      than 10 days after the receipt by the Trustee of the notice of the
      proposed payment. The Trustee shall promptly notify the Company [or the
      Guarantor, as the case may be,] of such Special Record Date and, in the
      name and at the expense of the Company [or the Guarantor], 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 the
      Holder of each such Security at his address 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 mailed as aforesaid, such Defaulted Interest
      shall be paid to the Persons in whose names such Securities (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 [or the Guarantor] may make payment of any Defaulted
      Interest in any other lawful manner not inconsistent with the requirements
      of any securities exchange on which such Securities may be listed, and
      upon such notice as may be required by such exchange, if, after notice
      given by the Company [or the Guarantor, as the case may be,] to the
      Trustee of the proposed payment pursuant to this Clause, such manner of
      payment shall be deemed practicable by the Trustee.


                                                                              46


            If any installment of interest the Stated Maturity of which is on or
prior to the Redemption Date for any Security called for redemption pursuant to
Article Eleven is not paid or duly provided for on or prior to the Redemption
Date in accordance with the foregoing provisions of this Section, such interest
shall be payable as part of the Redemption Price of such Securities.

            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 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 Guarantor,]
the Trustee and any agent of the Company[, the Guarantor] or the Trustee may
treat the Person in whose name any Security is registered in the Security
Register as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any), 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 Guarantor,] the Trustee nor
any agent of the Company [, the Guarantor] or the Trustee shall be affected by
notice to the contrary.

            Section 309. CANCELLATION. All Securities surrendered for payment,
redemption, transfer, conversion or exchange or credit against a sinking fund
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and, if not already canceled, shall be promptly canceled by it. The
Company [or the Guarantor] may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company [or the Guarantor] may have acquired in any manner whatsoever,
and all Securities so delivered shall be promptly canceled by the Trustee. No
Security 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. The Trustee shall return all


                                                                              47


canceled Securities to the Company.

            Section 310. COMPUTATION OF INTEREST. Unless otherwise provided as
contemplated in Section 301, interest on the Securities shall be calculated on
the basis of a 360-day year of twelve 30-day months.

            Section 311. MEDIUM-TERM SECURITIES. Notwithstanding any contrary
provision herein, if all Securities of a series are not to be originally issued
at one time, it shall not be necessary for the Company to deliver to the Trustee
an Officers' Certificate, Board Resolution, supplemental indenture, Opinion of
Counsel or Company Request otherwise required pursuant to Sections 202, 301 and
303 at or prior to the time of authentication of each Security of such series if
such documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first Security of such series to be
issued; provided that any subsequent request by the Company to the Trustee to
authenticate Securities of such series upon original issuance shall constitute a
representation and warranty by the Company that as of the date of such request,
the statements made in the Officers' Certificate delivered pursuant to Section
102 shall be true and correct as if made on such date.

            An Officers' Certificate, supplemental indenture or Board Resolution
delivered by the Company to the Trustee in the circumstances set forth in the
preceding paragraph may provide that Securities which are the subject thereof
will be authenticated and delivered by the Trustee or its agent on original
issue from time to time upon the telephonic or written order of persons
designated in such Officers' Certificate, Board Resolution or supplemental
indenture (any such telephonic instructions to be confirmed promptly in writing
by such persons) and that such persons are authorized to determine, consistent
with such Officers' Certificate, supplemental indenture or Board Resolution,
such terms and conditions of said Securities as are specified in such Officers'
Certificate, supplemental indenture or Board Resolution.


                                                                              48


            Section 312. 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 of any change in the "CUSIP" numbers.

            SECTION 313. GLOBAL SECURITIES. (a) Each Global Security
authenticated under this Indenture shall be registered in the name of the
Depositary designated by the Company for such Global Security or a nominee
thereof and delivered to such Depositary or a nominee thereof or custodian
therefor, and each such Global Security shall constitute a single Security for
all purposes of this Indenture.

            (b) Notwithstanding any other provision of this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary (A) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be a clearing agency registered as such under the Exchange Act or
announces an intention permanently to cease business or does in fact do so or
(ii) there shall have occurred and be continuing an Event of Default with
respect to such Global Security.

            (c) If any Global Security is to be exchanged for other Securities
or canceled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee to the Trustee, as Security Registrar, for exchange or
cancellation, as provided in this Article Three. If any Global Security is to be
exchanged for other Securities or canceled in part, or if another Security is to
be exchanged in whole or in part for a beneficial interest in any Global
Security, in each case, as provided in Section 305, then


                                                                              49


either (i) such Global Security shall be so surrendered for exchange or
cancellation, as provided in this Article Three or (ii) the principal amount
thereof shall be reduced or increased by an amount equal to the portion thereof
to be so exchanged or canceled, or equal to the principal amount of such other
Security to be so exchanged for a beneficial interest therein, as the case may
be, by means of an appropriate adjustment made on the records of the Trustee, as
Security Registrar, whereupon the Trustee, in accordance with the Applicable
Procedures, shall instruct the Depositary or its authorized representative to
make a corresponding adjustment to its records. Upon any such surrender or
adjustment of a Global Security, the Trustee shall, subject to Section 305 and
as otherwise provided in this Article Three authenticate and deliver any
Securities issuable in exchange for such Global Security (or any portion
thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request
of the Trustee in connection with the occurrence of any of the events specified
in the preceding paragraph, the Company shall promptly make available to the
Trustee a reasonable supply of Securities that are not in the form of Global
Securities. The Trustee shall be entitled to rely upon any order, direction or
request of the Depositary or its authorized representative which is given or
made pursuant to this Article Three if such order, direction or request is given
or made in accordance with the Applicable Procedures.

            (d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article Three or otherwise, shall be
authenticated and delivered in the form of, and shall be, a registered Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof, in which case such
Registered Security shall be authenticated and delivered in definitive, fully
registered form, without interest coupons.

            (e) The Depositary or its nominee, as registered


                                                                              50


owner of a Global Security, shall be the Holder of such Global Security for all
purposes under the Indenture and the Registered Securities, and owners of
beneficial interests in a Global Security shall hold such interests pursuant to
the Applicable Procedures. Accordingly, any such owner's beneficial interest in
a Global Security will be shown only on, and the transfer of such interest shall
be effected only through, records maintained by the Depositary or its nominee or
its Agent Members and such owners of beneficial interests in a Global Security
will not be considered the owners or holders thereof.

                                  ARTICLE FOUR

                    SATISFACTION AND DISCHARGE OF INDENTURE;
                          DEFEASANCE; UNCLAIMED MONEYS

            SECTION 401. APPLICABILITY OF ARTICLE. If, pursuant to Section 301,
provision is made for the defeasance of Securities of a series and if the
Securities of such series are denominated and payable only in U.S. dollars
(except as provided pursuant to Section 301), then the provisions of this
Article Four relating to defeasance of Securities shall be applicable except as
otherwise specified pursuant to Section 301 for Securities of such series.
Defeasance provisions, if any, for Securities denominated in a currency other
than U.S. dollars may be specified pursuant to Section 301.

            SECTION 402. SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE.
(a) If at any time (i) the Company [or the Guarantor] shall have delivered to
the Trustee for cancellation all Securities of any series theretofore
authenticated and delivered (other than (1) any Securities of such series which
shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 306 and (2) Securities for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company [or the
Guarantor] as provided in Section 405) or (ii) all Securities of such series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and


                                                                              51


the Company shall deposit with the Trustee as trust funds the entire amount in
the currency in which such Securities are denominated (except as otherwise
provided pursuant to Section 301) sufficient (in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee) without consideration of any
reinvestment and after payment of all taxes or other charges and assessments in
respect thereof payable by the Trustee, to pay at maturity or upon redemption
all Securities of such series not theretofore delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due on such date of maturity or redemption date, as the case may be, no
default with respect to the Securities has occurred and is continuing on the
date of such deposit, such deposit does not result in a breach or violation of,
or constitute a default under, the Indenture or any other agreement or
instrument to which the Company [or the Guarantor] is a party and the Company
delivers an Officers' Certificate and an Opinion of Counsel each stating that
such conditions have been complied with and if in either case the Company [or
the Guarantor] shall also pay or cause to be paid all other sums payable
hereunder by the Company [or the Guarantor], then this Indenture shall cease to
be of further effect (except as to any surviving rights of registration of
transfer or exchange of such Securities herein expressly provided for and rights
to receive payments of principal of, and premium, if any, and interest on, such
Securities) with respect to the Securities of such series, and the Trustee, on
demand of the Company [or the Guarantor], shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture.

            (b) Subject to Sections 402(c), 403 and 407, the Company at any time
may terminate, with respect to Securities of a particular series, (i) all the
Company's [and the Guarantor's] obligations under the Securities of such series
and this Indenture with respect to the Securities of such series ("legal
defeasance option") or (ii) the Company's [and the Guarantor's] obligations with
respect to the Securities of such series under Section 1006 and 1007 and, to the
extent specified pursuant to Section


                                                                              52


301, any other covenant applicable to the Securities of such series ("covenant
defeasance option"). The Company [or the Guarantor] may exercise its legal
defeasance option notwithstanding the prior exercise of the covenant defeasance
option.

            If the Company exercises the legal defeasance option, payment of the
Securities of the defeased series may not be accelerated because of an Event of
Default. If the Company exercises the covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Section 501(4) to the extent it relates to Section 1006 or 1007.

            Upon satisfaction of the conditions set forth herein and upon
request of the Company [or the Guarantor], the Trustee shall acknowledge in
writing the discharge of those obligations that the Company terminates.

            (c) Notwithstanding clause (a) above and the exercise of the legal
defeasance option in clause (b) above, the Company's [and the Guarantor's]
obligations in Sections 305, 306, 405, 406, 407, 607, 701 and 1002 shall survive
until the Securities of the defeased series have been paid in full. Thereafter,
the Company's [and the Guarantor's] obligations in Sections 607, 405 and 406
shall survive.

            SECTION 403. CONDITIONS OF DEFEASANCE. The Company may exercise the
legal defeasance option or the covenant defeasance option with respect to
Securities of a particular series only if:

            (1) the Company [or the Guarantor] irrevocably deposits in trust
      with the Trustee money or U.S. Government Obligations for the payment of
      principal of, and premium, if any, and interest on, the Securities of such
      series to maturity or redemption, as the case may be;

            (2) the Company [or the Guarantor] delivers to the Trustee a
      certificate from a nationally recognized firm of independent public
      accountants expressing their opinion that the payments of principal and
      interest when due and without reinvestment on the deposited U.S.
      Government Obligations plus any deposited money without investment will
      provide cash at such times and in such


                                                                              53


      amounts as will be sufficient to pay the principal, premium, if any, and
      interest when due on all the Securities of such series to maturity or
      redemption, as the case may be;

            (3) 91 days pass after the deposit is made and during the 91-day
      period no Default specified in Section 501(5) or (6) with respect to the
      Company occurs which is continuing at the end of the period;

            (4) no Default has occurred and is continuing on the date of such
      deposit and after giving effect thereto;

            (5) the deposit does not constitute a default under any other
      agreement binding on the Company [or the Guarantor];

            (6) the Company [or the Guarantor] delivers to the Trustee an
      Opinion of Counsel to the effect that the trust resulting from the deposit
      does not constitute, or is qualified as, a regulated investment company
      under the Investment Company Act of 1940;

            (7) in the event of the legal defeasance option, the Company [or the
      Guarantor] shall have delivered to the Trustee an Opinion of Counsel
      stating that (i) the Company has received from the Internal Revenue
      Service a ruling, or (ii) since the date of this Indenture there has been
      a change in the applicable Federal income tax law, in either case to the
      effect that, and based thereon such Opinion of Counsel shall confirm that,
      the Holders of Securities of such series will not recognize income, gain
      or loss for Federal income tax purposes as a result of such defeasance and
      will be subject to Federal income tax on the same amounts, in the same
      manner and at the same times as would have been the case if such
      defeasance had not occurred;

            (8) in the event of the covenant defeasance option, the Company [or
      the Guarantor] shall have delivered to the Trustee an Opinion of Counsel
      to the


                                                                              54


      effect that the Holders of Securities of such series will not recognize
      income, gain or loss for Federal income tax purposes as a result of such
      covenant defeasance and will be subject to Federal income tax on the same
      amounts, in the same manner and at the same times as would have been the
      case if such covenant defeasance had not occurred; and

            (9) the Company [or the Guarantor] delivers to the Trustee an
      Officers' Certificate and an Opinion of Counsel, each stating that all
      conditions precedent to the defeasance and discharge of the Securities of
      such series as contemplated by this Article Four have been complied with.

            Before or after a deposit, the Company [or the Guarantor] may make
arrangements satisfactory to the Trustee for the redemption of Securities of
such series at a future date in accordance with Article Eleven.

            SECTION 404. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article Four. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Securities of the defeased series.

            SECTION 405. REPAYMENT TO COMPANY [OR GUARANTOR]. The Trustee and
any paying agent shall promptly turn over to the Company [or the Guarantor] upon
request any excess money or securities held by them at any time.

            Subject to any applicable abandoned property law, the Trustee and
any paying agent shall pay to the Company [or the Guarantor] upon request any
money held by them for the payment of principal, premium or interest that
remains unclaimed for two years, and, thereafter, Holders entitled to such money
must look to the Company [or the Guarantor] for payment as general creditors and
all liability of the Trustee or such paying agent with respect to such money
shall thereupon cease.

            SECTION 406. INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The Company
[and the Guarantor (without


                                                                              55


duplication)] shall pay and shall indemnify the Trustee and the Holders against
any tax, fee or other charge imposed on or assessed against deposited U.S.
Government Obligations or the principal and interest received on such U.S.
Government Obligations.

            SECTION 407. REINSTATEMENT. If the Trustee or any paying agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article Four by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's [and the Guarantor's]
obligations under this Indenture and the Securities of the defeased series shall
be revived and reinstated as though no deposit had occurred pursuant to this
Article Four until such time as the Trustee or any paying agent is permitted to
apply all such money or U.S. Government Obligations in accordance with this
Article Four.

                                  ARTICLE FIVE

                                    REMEDIES

            Section 501. EVENTS OF DEFAULT. "Event of Default", wherever used
herein, means with respect to any series of Securities 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), unless such event is either inapplicable
to a particular series or it is specifically deleted or modified in the
supplemental indenture creating such series of Securities or in the form of
Security for such series:

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


                                                                              56


            (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 payment of any sinking or purchase fund or
      analogous obligation when the same becomes due by the terms of the
      Securities of such series; or

            (4) default in the performance, or breach, of any covenant or
      warranty of the Company [or the Guarantor] in this Indenture in respect of
      the Securities of such series (other than a covenant or warranty in
      respect of the Securities of such series a default in the performance of
      which or the breach of which is else where in this Section specifically
      dealt with), all of such covenants and warranties in the Indenture which
      are not expressly stated to be for the benefit of a particular series of
      Securities being deemed in respect of the Securities of all series for
      this purpose, 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 [and the Guarantor] by the Trustee or to the Company[, the
      Guarantor] and the Trustee by the Holders of at least 25% in principal
      amount of the Outstanding Securities of such 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

            (5) with respect to any series of Securities issued or guaranteed
       by the Guarantor, the Guarantor's consolidation or amalgamation with
       or merger into any other Person or conveyance or transfer of its
       properties and assets substantially as an entirety to any Person,
       unless:

                  (A) the Person formed by such consolidation or amalgamation
       or into which the Guarantor is merged or the Person which acquires by
       conveyance or transfer the properties and assets of the Guarantor
       substantially as an entirety shall be a corporation or limited
       liability company organized and existing under the laws of the United
       States of America, any State thereof, the District of Columbia or
       Bermuda, and shall expressly assume, by an indenture supplemental
       hereto, executed by the successor Person and the Company 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 on all the Securities and the performance of every covenant
       of this Indenture on the part of the Guarantor to be performed or
       observed;

                  (B) 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

                  (C) either the Guarantor or the successor Person has
       delivered to the Trustee an Officers' Certificate and an Opinion of
       Counsel each stating that such consolidation, amalgamation, merger,
       conveyance or transfer and such supplemental indenture comply with
       this Article and that all conditions precedent herein provided for
       relating to such transaction have been complied with,

and continuance of any failure to comply with the conditions set forth under
items (A), (B) or (C) of this paragraph (5) for a period of 90 days after there
has been given, by registered or certified mail, to the Guarantor by the Trustee
or to the Guarantor and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of such series, a written notice specifying
such failure to comply and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or


            (6) the entry of an order for relief against the Company [or the
      Guarantor] under the Federal Bankruptcy Code by a court having
      jurisdiction in the premises or a decree or order by a court having
      jurisdiction in the premises adjudging the Company [or the Guarantor] a
      bankrupt or insolvent under any other applicable Federal, State or foreign
      law, or the entry of a decree or order approving as properly filed a
      petition seeking reorganization, arrangement, adjustment or composition of
      or in respect of the Company [or the Guarantor] under the Federal
      Bankruptcy Code or any other


                                                                              57


      applicable Federal, State or foreign law (other than a reorganization
      under a foreign law that does not relate to insolvency), or appointing a
      receiver, liquidator, assignee, trustee, sequestrator (or other similar
      official) of the Company [or the Guarantor] 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

            (7) the consent by the Company [or the Guarantor] 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 the
      Federal Bankruptcy Code or any other applicable Federal, State or foreign
      law (other than a reorganization under a foreign law that does not relate
      to insolvency), 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 the Guarantor]
      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, or the
      taking of corporate action by the Company [or the Guarantor] in
      furtherance of any such action; or

            (8) any other Event of Default provided in the supplemental
      indenture under which such series of Securities is issued or in the form
      of Security for such series.

            Section 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default described in paragraph (1), (2), (3), (4), (5) or (8)
(if the Event of Default under paragraph (4), (5) or (8) is with respect to
less than all series of Securities then Outstanding) of Section 501 occurs
and is continuing with respect to any series, then and in each and every such
case, unless the principal of all the Securities of such series shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Securities of such series then
Outstanding hereunder (each such series acting as a separate class), by
notice in writing to the Company [and the Guarantor] (and to the Trustee if
given by


                                                                              58


Holders), may declare the principal amount (or, if the Securities of such
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 such series then Outstanding and all accrued interest thereon to be due
and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, anything in this Indenture or in
the Securities of such series contained to the contrary notwithstanding. If
an Event of Default described in paragraph (4), (5) or (8) (if the Event of
Default under paragraph (4), (5) or (8) is with respect to all series of
Securities then Outstanding), (6) or (7) of Section 501 occurs and is
continuing, then and in each and every such case, unless the principal of all
the Securities shall have already become due and payable, either the Trustee
or the Holders of not less than 25% in aggregate principal amount of all the
Securities then Outstanding hereunder (treated as one class), by notice in
writing to the Company [and the Guarantor] (and to the Trustee if given by
Holders), may declare the principal amount (or, if any Securities are
Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms thereof) of all the Securities then Outstanding
and all accrued interest thereon, if any, to be due and payable immediately,
and upon any such declaration the same shall become and shall be immediately
due and payable, anything in this Indenture or in the Securities contained to
the contrary notwithstanding.

            At any time after such a declaration of acceleration has been made
with respect to the Securities of any series 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 such series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if

            (1) the Company [or the Guarantor] has paid or deposited with the
      Trustee a sum sufficient to pay


                                                                              59


                  (A) all overdue installments of interest on the Securities of
            such series,

                  (B) the principal of (and premium, if any, on) any Securities
            of such series which have become due otherwise than by such
            declaration of acceleration, and interest thereon at the rate or
            rates prescribed therefor by the terms of the Securities of such
            series, to the extent that payment of such interest is lawful,

                  (C) interest upon overdue installments of interest at the rate
            or rates prescribed therefor by the terms of the Securities of such
            series to the extent that payment of such interest is lawful, 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 all other amounts due the
            Trustee under Section 607;

and

            (2) all Events of Default with respect to such series of Securities,
      other than the nonpayment of the principal of the Securities of such
      series which have 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.

            Section 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Company [and the Guarantor each] covenants that if

            (1) default is made in the payment of any installment of interest on
      any Security of any series when such interest becomes due and payable, or

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


                                                                              60


            (3) default is made in the payment of any sinking or purchase fund
      or analogous obligation when the same becomes due by the terms of the
      Securities of any series,

and any such default continues for any period of grace provided with respect to
the Securities of such series, the Company [or the Guarantor, as the case may
be,] will, upon demand of the Trustee, pay to it, for the benefit of the Holder
of any such Security (or the Holders of any such series in the case of Clause
(3) above), the whole amount then due and payable on any such Security (or on
the Securities of any such series in the case of Clause (3) above) for principal
(and premium, if any) and interest, with interest, to the extent that payment of
such interest shall be legally enforceable, upon the overdue principal (and
premium, if any) and upon overdue installments of interest, at such rate or
rates as may be prescribed therefor by the terms of any such Security (or of
Securities of any such series in the case of Clause (3) above); and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and all other
amounts due the Trustee under Section 607.

            If the Company [or the Guarantor] 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 the Guarantor] or any
other obligor upon the Securities of such series and collect the money adjudged
or decreed to be payable in the manner provided by law out of the property of
the Company [or the Guarantor] or any other obligor upon such Securities,
wherever situated.

            If an Event of Default with respect to any series of Securities
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


                                                                              61


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[, Guarantor] or any other obligor upon the
Securities or the property of the Company [, Guarantor] or of such other obligor
or their creditors, the Trustee (irrespective of whether the principal of the
Securities 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 [or the Guarantor] for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceedings
or otherwise,

            (i) to file and prove a claim for the whole amount of principal (and
      premium, if any) and interest owing and unpaid in respect of the
      Securities and to file such other papers or documents as may be necessary
      and advisable in order to have the claims of the Trustee (including any
      claim for the reasonable compensation, expenses, disbursements and
      advances of the Trustee, its agents and counsel and all other amounts due
      the Trustee under Section 607) and of the Securityholders allowed in such
      judicial proceeding, and

            (ii) to collect and receive any moneys or other property payable or
      deliverable on any such claims and to distribute the same;

and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the


                                                                              62


Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee 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 Securityholder any
plan or 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 Securityholder in any such proceeding.

            Section 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES. All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities of such series 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 reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, be for the ratable benefit of the Holders of the Securities of the
series in respect of which such judgment has been recovered.

            Section 506. APPLICATION OF MONEY COLLECTED. Any money collected 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 on account of principal
(or premium, if any) or interest, upon presentation of the Securities of such
series and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:

            FIRST: To the payment of all amounts due the Trustee under Section
607.

            SECOND: To the payment of the amounts then due and unpaid upon the
Securities of that series 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,


                                                                              63


according to the amounts due and payable on such Securities for principal (and
premium, if any) and interest, respectively.

            THIRD: To the Company [or the Guarantor or both, as they are
entitled].

            Section 507. LIMITATION ON SUITS. No Holder of any Security 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 Securities of such
      series;

            (2) the Holders of not less than 25% in principal amount of the
      Outstanding Securities of such 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 aggregate principal amount of the Outstanding Securities of
      such series;

it being understood and intended that no one or more Holders of Securities of
such series 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


                                                                              64


the rights of any other Holders of Securities of such series, or to obtain or to
seek to obtain priority or preference over any other such Holders or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal and proportionate benefit of all the Holders of all Securities of such
series.

            Section 508. UNCONDITIONAL RIGHT OF SECURITY HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST. Not withstanding any other provisions 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 or
repayment, on the Redemption Date or Repayment Date, as the case may be) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.

            Section 509. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or
any Securityholder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, then and in every such case the Company, [the Guarantor,] the
Trustee and the Securityholders 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
Securityholders shall continue as though no such proceeding had been instituted.

            Section 510. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon or reserved to the Trustee or to the Securityholders 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


                                                                              65


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 Securityholders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Securityholders, as the case may be.

            Section 512. CONTROL BY SECURITYHOLDERS. 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) the Trustee shall have the right to decline to follow any such
      direction if the Trustee, being advised by counsel, determines that the
      action so directed may not lawfully be taken or would conflict with this
      Indenture or if the Trustee in good faith shall, by a Responsible Officer,
      determine that the proceedings so directed would involve it in personal
      liability or be unjustly prejudicial to the Holders not taking part in
      such direction, 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 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 not theretofore cured

            (1) in the payment of the principal of (or premium, if any) or
      interest on any Security of such series, or in the payment of any sinking
      or purchase fund or analogous obligation with respect to the Securities of
      such series, or


                                                                              66


            (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.

            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 Securityholder, or
group of Securityholders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series to which the suit relates, or
to any suit instituted by any Securityholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Security on or after
the respective Stated Maturities expressed in such Security (or, in the case of
redemption or repayment, on or after the Redemption Date or Repayment Date).

            Section 515. WAIVER OF STAY OR EXTENSION LAWS. The Company [and the
Guarantor each] 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 force, which may affect the covenants or the
performance of this Indenture; and the Company [and the Guarantor each] (to the
extent that it may lawfully do so) hereby expressly


                                                                              67


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 with respect to any series of Securities,

            (1) the Trustee undertakes to perform such duties and only such
      duties as are specifically set forth in this Indenture with respect to the
      Securities of such series, 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, with
      respect to Securities of such series, 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.

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


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            (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;

            (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 the Holders of a majority in principal amount of the
      Outstanding Securities of any series 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

            (4) 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. Within 90 days after the occurrence
of any default hereunder with respect to Securities of any series, the Trustee
shall transmit by mail to all Securityholders of such series, as their names and
addresses appear in the Security Register, notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
PROVIDED, HOWEVER,


                                                                              69


that, except in the case of a default in the payment of the principal of (or
premium, if any) or interest on any Security of such series or in the payment
of any sinking or purchase fund installment or analogous obligation with
respect to Securities 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 determine that the withholding of such
notice is in the interests of the Securityholders of such series; and
PROVIDED, FURTHER, that in the case of any default of the character specified
in Section 501(4) or (5) with respect to Securities of such series no such
notice to Securityholders of such series shall be given until at least 90
days after the occurrence thereof. For the purpose of this Section, the term
"default", with respect to Securities of any series, 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. Except as otherwise provided
in 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 or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;

            (b) any request or direction of the Company [or the Guarantor]
mentioned herein shall be sufficiently evidenced by a Company Request or Company
Order[, or a Guarantor Request or Guarantor Order, as applicable,] and any
resolution of the Board of Directors [or the Guarantor Board of Directors] may
be sufficiently evidenced by a Board Resolution [or a Guarantor's Board
Resolution, as applicable];

            (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


                                                                              70


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 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;

            (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 Securityholders pursuant to this Indenture, unless such
Securityholders 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,
debenture 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 [and the Guarantor], 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 certificates of
authentication, shall be taken as the statements of the Company [or the
Guarantor, as applicable], and the Trustee assumes no responsibility for their
correctness. The


                                                                              71


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 [or the Guarantor] of Securities or the proceeds
thereof.

            Section 605. MAY HOLD SECURITIES. The Trustee, any Paying Agent, the
Security Registrar or any other agent of the Company [or the Guarantor], 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 [or
the Guarantor] with the same rights it would have if it were not Trustee, 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 otherwise agreed with the Company [or the
Guarantor].

            Section 607. COMPENSATION AND REIMBURSEMENT. The Company [and the
Guarantor (without duplication)] agrees

            (1) to pay to the Trustee from time to time as the parties shall
      agree from time to time such 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 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


                                                                              72


            (3) to indemnify the Trustee for, and to hold it harmless against,
      any loss, liability 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, 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.

            As security for the performance of the obligations of the Company
[and the Guarantor] under this Section the Trustee shall have a lien prior to
the Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of principal of (and premium,
if any) or interest on particular Securities.

            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 during the period of
time provided for therein. In determining whether the Trustee has a conflicting
interest as defined in Section 310(b) of the Trust Indenture Act with respect to
the Securities of any series, there shall be excluded for purposes of the
conflicting interest provisions of such Section 310(b) the Securities of every
other series issued under this Indenture and every series of securities issued
under any other indentures if the requirements for such exclusion set forth in
section 310(b) of the Trust Indenture Act are met. 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 with respect to each series of Securities,
which shall be a corporation organized and doing business under the laws of the
United States of America or of any State, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, and 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 purposes of this Section,


                                                                              73


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 with respect to any series of
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.

            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 with respect to any series of Securities
at any time by giving written notice thereof to the Company [and the Guarantor].
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.

            (c) The Trustee may be removed with respect to any series of
Securities at any time by Act of the Holders of a majority in principal amount
of the Outstanding Securities of that series, delivered to the Trustee and to
the Company [and the Guarantor]. 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 removal, the removed Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

            (d) If at any time:

            (1) the Trustee shall fail to comply with Section 310(b) of the
      Trust Indenture Act pursuant to Section 608(a) with respect to any series
      of Securities after written request therefor by the Company[, by the
      Guarantor] or by any Securityholder who has been a bona


                                                                              74


      fide Holder of a Security of that series for at least 6 months, or

            (2) the Trustee shall cease to be eligible under Section 609 with
      respect to any series of Securities and shall fail to resign after written
      request therefor by the Company[, by the Guarantor] or by any such
      Securityholder, or

            (3) the Trustee shall become incapable of acting with respect to any
      series of Securities, or

            (4) the Trustee 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 a Board Resolution[, or the
Guarantor by a Guarantor's Board Resolution,] may remove the Trustee, with
respect to the series, or in the case of Clause (4), with respect to all series,
or (ii) subject to Section 514, any Securityholder who has been a bona fide
Holder of a Security of such series for at least 6 months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee with respect to the series, or, in the case of Clause (4), with respect
to all series.

            (e) If the Trustee shall resign, be removed or become incapable of
acting with respect to any series of Securities, or if a vacancy shall occur in
the office of the Trustee with respect to any series of Securities for any
cause, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee for that series of Securities. If, within one year after such
resignation, removal or incapacity, or the occurrence of such vacancy, a
successor Trustee with respect to such series of Securities 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[, the Guarantor] and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the


                                                                              75


successor Trustee with respect to such series and supersede the successor
Trustee appointed by the Company with respect to such series. If no successor
Trustee with respect to such series shall have been so appointed by the Company
or the Securityholders of such series and accepted appointment in the manner
hereinafter provided, any Securityholder who has been a bona fide Holder of a
Security of that series for at least 6 months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to such series.

            (f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to any series and each appointment of a
successor Trustee with respect to any series by mailing written notice of such
event by first-class mail, postage prepaid, to the Holders of Securities of that
series as their names and addresses appear in the Security Register. Each notice
shall include the name of the successor Trustee and the address of its principal
Corporate Trust Office.

            Section 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company[, the Guarantor] and to the predecessor Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the predecessor
Trustee shall become effective with respect to any series as to which it is
resigning or being removed as Trustee, and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the predecessor Trustee with respect to any such
series; but, on request of the Company[, the Guarantor] or the successor
Trustee, such predecessor Trustee shall, upon payment of its reasonable charges,
if any, execute and deliver an instrument transferring to such successor Trustee
all the rights, powers and trusts of the predecessor Trustee, and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such predecessor Trustee hereunder with respect to all or any such
series, subject nevertheless to its lien, if any, provided for in


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Section 607. Upon request of any such successor Trustee, the Company [and the
Guarantor] 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.

            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
Guarantor,] the predecessor Trustee and each successor Trustee with respect to
the Securities of any applicable series shall execute and deliver an indenture
supplemental hereto which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the predecessor Trustee with respect to the Securities of any series as to
which the predecessor Trustee is not being succeeded shall continue to be vested
in the predecessor Trustee, and shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the 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.

            No successor Trustee with respect to any series of Securities shall
accept its appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible with respect to that series 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


                                                                              77


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. (a)
Subject to Subsection (b) of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company
within 3 months prior to a default, as defined in Subsection (c) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities and the
holders of other indenture securities (as defined in Subsection (c) of this
Section):

            (1) an amount equal to any and all reductions in the amount due and
      owing upon any claim as such creditor in respect of principal or interest,
      effected after the beginning of such 3-month period and valid as against
      the Company and its other creditors, except any such reduction resulting
      from the receipt or disposition of any property described in paragraph (2)
      of this Subsection, or from the exercise of any right of set-off which the
      Trustee could have exercised if a petition in bankruptcy had been filed by
      or against the Company upon the date of such default; and

            (2) all property received by the Trustee in respect of any claim as
      such creditor, either as security therefor, or in satisfaction or
      composition thereof, or otherwise, after the beginning of such 3-month
      period, or an amount equal to the proceeds of any such property, if
      disposed of, subject, however, to the rights, if any, of the Company and
      its other creditors in such property or such proceeds.

Nothing herein contained, however, shall affect the right of the Trustee

                  (A) to retain for its own account


                                                                              78


            (i) payments made on account of any such claim by any Person (other
            than the Company) who is liable thereon, and (ii) the proceeds of
            the bona fide sale of any such claim by the Trustee to a third
            person, and (iii) distributions made in cash, securities or other
            property in respect of claims filed against the Company in
            bankruptcy or receivership or in proceedings for reorganization
            pursuant to the Federal Bankruptcy Act or applicable State law;

                  (B) to realize, for its own account, upon any property held by
            it as security for any such claim, if such property was so held
            prior to the beginning of such 3-month period;

                  (C) to realize, for its own account, but only to the extent of
            the claim hereinafter mentioned, upon any property held by it as
            security for any such claim, if such claim was created after the
            beginning of such 3-month period and such property was received as
            security therefor simultaneously with the creation thereof, and if
            the Trustee shall sustain the burden of proving that at the time
            such property was so received the Trustee had no reasonable cause to
            believe that a default as defined in Subsection (c) of this Section
            would occur within 3 months; or

                  (D) to receive payment on any claim referred to in paragraph
            (B) or (C), against the release of any property held as security for
            such claim as provided in paragraph (B) or (C), as the case may be,
            to the extent of the fair value of such property.

            For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such 3-month period for property held as
security at the time of such substitution shall, to the extent of the fair value
of the property released, have the same status as the property released, and, to
the extent that any claim referred to in


                                                                              79


any of such paragraphs is created in renewal of or in substitution for or for
the purpose of repaying or refunding any pre-existing claim of the Trustee as
such creditor, such claim shall have the same status as such pre-existing claim.

            If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, the Securityholders and the holders
of other indenture securities realize, as a result of payments from such
special account and payments of dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee anything
on account of the receipt by it from the Company of the funds and property in
such special account and before crediting to the respective claims of the
Trustee and the Securityholders and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other than
from such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, whether such distribution is
made in cash, securities, or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceedings for reorganization
is pending shall have jurisdiction (i) to apportion between the Trustee and the
Securityholders and the holders of other indenture securities in accordance with
the provisions of this paragraph, the funds and property held in such special
account and proceeds thereof, or (ii) in lieu of such apportionment, in whole or
in part, to give to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the Trustee and the
Securityholders and the holders of


                                                                              80


other indenture securities with respect to their respective claims, in which
event it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for any
such claim, or to make a specific allocation of such distributions as between
the secured and unsecured portions of such claims, or otherwise to apply the
provisions of this paragraph as a mathematical formula.

            Any Trustee which has resigned or been removed after the beginning
of such 3-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such 3-month period, it shall be
subject to the provisions of this Subsection if and only if the following
conditions exist:

                  (i) the receipt of property or reduction of claim, which would
            have given rise to the obligation to account, if such Trustee had
            continued as Trustee, occurred after the beginning of such 3-month
            period; and

                  (ii) such receipt of property or reduction of claim occurred
            within 3 months after such resignation or removal.

            (b) There shall be excluded from the operation of Subsection (a) of
this Section a creditor relationship arising from

            (1) the ownership or acquisition of securities issued under any
      indenture, or any security or securities having a maturity of one year or
      more at the time of acquisition by the Trustee;

            (2) advances authorized by a receivership or bankruptcy court of
      competent jurisdiction, or by this Indenture, for the purpose of
      preserving any property which shall at any time be subject to the lien of
      this Indenture or of discharging tax liens or other prior liens or
      encumbrances thereon, if notice of such


                                                                              81


      advances and of the circumstances surrounding the making thereof is given
      to the Securityholders at the time and in the manner provided in this
      Indenture;

            (3) disbursements made in the ordinary course of business in the
      capacity of trustee under an indenture, transfer agent, registrar,
      custodian, paying agent, fiscal agent or depositary, or other similar
      capacity;

            (4) an indebtedness created as a result of services rendered or
      premises rented; or an indebtedness created as a result of goods or
      securities sold in a cash transaction as defined in Subsection (c) of this
      Section;

            (5) the ownership of stock or of other securities of a corporation
      organized under the provisions of Section 25(a) of the Federal Reserve
      Act, as amended, which is directly or indirectly a creditor of the
      Company; or

            (6) the acquisition, ownership, acceptance or negotiation of any
      drafts, bills of exchange, acceptances or obligations which fall within
      the classification of self liquidating paper as defined in Subsection (c)
      of this Section.

            (c) For the purposes of this Section only:

            (1) The term "default" means any failure to make payment in full of
      the principal of or interest on any of the Securities or upon the other
      indenture securities when and as such principal or interest becomes due
      and payable.

            (2) The term "other indenture securities" means securities upon
      which the Company is an obligor outstanding under any other indenture (i)
      under which the Trustee is also trustee, (ii) which contains provisions
      substantially similar to the provisions of this Section, and (iii) under
      which a default exists at the time of the apportionment of the funds and
      property held in such special account.

            (3) The term "cash transaction" means any transaction in which full
      payment for goods or


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      securities sold is made within 7 days after delivery of the goods or
      securities in currency or in checks or other orders drawn upon banks or
      bankers and payable upon demand.

            (4) The term "self-liquidating paper" means any draft, bill of
      exchange, acceptance or obligation which is made, drawn, negotiated or
      incurred by the Company for the purpose of financing the purchase,
      processing, manufacturing, shipment, storage or sale of goods, wares or
      merchandise and which is secured by documents evidencing title to,
      possession of, or a lien upon, the goods, wares or merchandise or the
      receivables or proceeds arising from the sale of the goods, wares or
      merchandise previously constituting the security, provided the security is
      received by the Trustee simultaneously with the creation of the creditor
      relationship with the Company arising from the making, drawing,
      negotiating or incurring of the draft, bill of exchange, acceptance or
      obligation.

            (5) The term "Company" means any obligor upon the Securities.

            Section 614. APPOINTMENT OF AUTHENTICATING AGENT. At any time when
any of the Securities remain Outstanding the Trustee, with the approval of the
Company, 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 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


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Agent shall be acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States of America, any
State thereof or the District of Columbia, authorized under such laws to act as
an Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and, if other than the Company itself, 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 the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, 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, if other than the Company, 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, if other than
the Company, 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,
with the approval of the Company, may appoint a successor Authenticating Agent
which shall be acceptable to the Company and shall mail written notice of such
appointment by first-class mail, postage prepaid, to all Holders of Securities
of the series


                                                                              84


with respect to which such Authenticating Agent will serve, as their names and
addresses appear in the Security Register. Any successor Authenticating Agent
upon acceptance of its appointment hereunder 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 Trustee agrees to pay to each Authenticating Agent (other than
an Authenticating Agent appointed at the request of the Company 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
alternate certificate of authentication in the following form:

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

                                          [           ],
                                          as Trustee


                                                By:_____________________________
                                                   As Authenticating Agent

Dated:_______________
                                                By:_____________________________
                                                   Authorized Signatory

                                  ARTICLE SEVEN


                                                                              85


                      SECURITYHOLDERS' LISTS AND REPORTS BY
                        TRUSTEE[, GUARANTOR] AND COMPANY

            Section 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS. The Company will furnish or cause to be furnished to the
Trustee

            (a) semi-annually, not more than 30 days after each Regular Record
      Date, in each year in such form as the Trustee may reasonably require, a
      list of the names and addresses of the Holders of Securities of such
      series as of such date, and

            (b) at such other times as the Trustee may request in writing,
      within 30 days after the receipt by the Company of any such request, a
      list of similar form and content as of a date not more than 30 days prior
      to the time such list is furnished,

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

            Section 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
SECURITYHOLDERS. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders of Securities 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.

            (b) If 3 or more Holders of Securities of any series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security of such
series for a period of at least 6 months preceding the date of such application,
and such application states that the applicants desire to communicate with other
Holders of Securities of such series or with the Holders of all Securities with
respect to their rights under this Indenture or under such Securities and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within 5 Business Days
after the receipt of such application, at its election, either


                                                                              86


            (i) afford such applicants access to the information preserved at
      the time by the Trustee in accordance with Section 702(a), or

            (ii) inform such applicants as to the approximate number of Holders
      of Securities of such series or all Securities, as the case may be, whose
      names and addresses appear in the information preserved at the time by the
      Trustee in accordance with Section 702(a), and as to the approximate cost
      of mailing to such Securityholders the form of proxy or other
      communication, if any, specified in such application.

            If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of a Security of such series or to all Security
holders, as the case may be, whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section 702(a), a copy
of the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless, within 5 days after such tender, the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests of the Holders
of Securities of such series or all Securityholders, as the case may be, or
would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to


                                                                              87


all Securityholders of such series or all Securityholders, as the case may be,
with reasonable promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation or duty to
such applicants respecting their application.

            (c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders of Securities in accordance with
Section 702(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 702(b).

            Section 703. REPORTS BY TRUSTEE. (a) The term "reporting date" as
used in this Section means [        ] of each year. Within 60 days after the
reporting date in each year, beginning in 200_, the Trustee shall transmit by
mail to all Securityholders, as their names and addresses appear in the Security
Register, a brief report dated as of such reporting date with respect to any of
the following events which may have occurred during the 12 months preceding the
date of such report (but if no such event has occurred within such period no
report need be transmitted):

            (1) any change to its eligibility under Section 609 and its
      qualifications under Section 608;

            (2) the creation of or any material change to a relationship
      specified in Section 310(b)(1) through Section 310(b)(10) of the Trust
      Indenture Act;

            (3) the character and amount of any advances (and if the Trustee
      elects so to state, the circumstances surrounding the making thereof) made
      by the Trustee (as such) which remain unpaid on the date of such report,
      and for the reimbursement of which it claims or may claim a lien or
      charge, prior to that of Securities of any series, on any property or
      funds held or collected


                                                                              88


      by it as Trustee, except that the Trustee shall not be required (but may
      elect) to report such advances if such advances so remaining unpaid
      aggregate not more than [1/2 of 1%] of the principal amount of the
      Securities of such series outstanding on the date of such report;

            (4) any change to the amount, interest rate and maturity date of all
      other indebtedness owing by the Company (or by any other obligor on the
      Securities) to the Trustee in its individual capacity, on the date of such
      report, with a brief description of any property held as collateral
      security therefor, except an indebtedness based upon a creditor
      relationship arising in a manner described in Section 613(b)(2), (3), (4)
      or (6);

            (5) any change to the property and funds, if any, physically in the
      possession of the Trustee as such on the date of such report;

            (6) any additional issue of Securities which the Trustee has not
      previously reported; and

            (7) any action taken by the Trustee in the performance of its duties
      hereunder which it has not previously reported and which in its opinion
      materially affects the Securities, except action in respect of a default,
      notice of which has been or is to be withheld by the Trustee in accordance
      with Section 602.

            (b) The Trustee shall transmit by mail to all Securityholders, as
their names and addresses appear in the Security Register, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
Subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Securities of any series, on property or funds held or collected by it as
Trustee, and which it has not previously reported pursuant to this Subsection,
except that the Trustee shall not be required (but may elect) to report such
advances if such advances


                                                                              89


remaining unpaid at any time aggregate [  ]% or less of the principal amount of
the Securities Outstanding of such series at such time, such report to be
transmitted within 90 days after such time.

            (c) A copy of each such report shall, at the time of such
transmission to Securityholders, 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 when the Securities are listed on any stock
exchange.

            Section 704. REPORTS BY COMPANY [AND GUARANTOR]. The Company [and
the Guarantor each] will:

            (1) file with the Trustee, within 30 days after the Company [or the
      Guarantor] 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 [or the
      Guarantor] may be required to file with the Commission pursuant to Section
      13 or Section 15(d) of the Securities Exchange Act of 1934; or, if
      [neither] the Company [nor the Guarantor] is [not] required to file
      information, documents or reports pursuant to either of said Sections,
      then [it] [the Guarantor] will 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
      Securities Exchange Act of 1934 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


                                                                              90


      compliance by the Company [or the Guarantor] 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 Securityholders, 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 [or the Guarantor] pursuant to
      paragraphs (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, AMALGAMATION, MERGER, CONVEYANCE OR TRANSFER

            Section 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate or amalgamate with or merge into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:

            (1) the Person formed by such consolidation or amalgamation or into
      which the Company is merged or the Person which acquires by conveyance or
      transfer the properties and assets of the Company substantially as an
      entirety shall be a corporation or limited liability company organized and
      existing under the laws of the United States of America, any State
      thereof, the District of Columbia or Bermuda, and shall expressly assume,
      by an indenture supplemental hereto, executed by the successor Person [and
      the Guarantor] 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 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,


                                                                              91


      after notice or lapse of time, or both, would become an Event of Default,
      shall have happened and be continuing; and

            (3) either the Company or the successor Person has delivered to the
      Trustee an Officers' Certificate and an Opinion of Counsel each stating
      that such consolidation, amalgamation, merger, conveyance or transfer and
      such supplemental indenture comply with this Article and that all
      conditions precedent herein provided for relating to such transaction have
      been complied with.

            Section 802. SUCCESSOR PERSON SUBSTITUTED FOR COMPANY. Upon any
consolidation, amalgamation or merger, or any conveyance or transfer of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or
amalgamation or into which the Company is merged or to which such conveyance or
transfer 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. In the event
of any such conveyance or transfer, the Company as the predecessor corporation
may be dissolved, wound up or liquidated at any time thereafter.



                                                                              92



            [Section 803. SUCCESSOR PERSON SUBSTITUTED FOR GUARANTOR. Upon any
consolidation, amalgamation or merger, or any conveyance or transfer of the
properties and assets of the Guarantor substantially as an entirety, whether
or not such event gives rise to an Event of Default under Section 501(5), the
successor Person formed by such consolidation or amalgamation or into which
the Guarantor is merged or to which such conveyance or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power
of, the Guarantor under this Indenture with the same effect as if such
successor Person had been named as the Guarantor herein. In the event of any
such conveyance or transfer, the Guarantor as the predecessor corporation may
be dissolved, wound up or liquidated at any time thereafter.]

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

            Section 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITYHOLDERS. Without the consent of the Holders of any Securities, the
Company, when authorized by a


                                                                              93


Board Resolution, [the Guarantor, when authorized by a Guarantor's Board
Resolution,] and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:

            (1) to evidence the succession of another Person to the Company
      [or the Guarantor], and the assumption by any such successor of the
      covenants of the Company [or the Guarantor] herein and in the Securities
      contained; or

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

            (3) to cure any ambiguity, to correct or supplement any provision
      herein 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; or

            (4) to add to this Indenture such provisions as may be expressly
      permitted by the TIA, excluding, however, the provisions referred to in
      Section 316(a)(2) of the TIA as in effect at the date as of which this
      instrument was executed or any corresponding provision in any similar
      federal statute hereafter enacted; or

            (5) to establish any form of Security, as provided in Article Two,
      and to provide for the issuance of any series of Securities as provided in
      Article Three and to set forth the terms thereof, and/or to add to the
      rights of the Holders of the Securities of any series; or


                                                                              94


            (6) to evidence and provide for the acceptance of appointment by
      another corporation as a successor Trustee hereunder with respect to one
      or more series of Securities and to add to or change any of the provisions
      of this Indenture as shall be necessary to provide for or facilitate the
      administration of the trusts hereunder by more than one Trustee, pursuant
      to Section 611; or

            (7) to add any additional Events of Default in respect of the
      Securities of any or all series (and if such additional Events of Default
      are to be in respect of less than all series of Securities, stating that
      such Events of Default are expressly being included solely for the benefit
      of one or more specified series); or

            (8) to provide for the issuance of Securities in coupon as well as
      fully registered form.

            No supplemental indenture for the purposes identified in Clauses
(2), (3), (5) or (7) above may be entered into if to do so would adversely
affect the interest of the Holders of Securities of any series.

            Section 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF
SECURITYHOLDERS. 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 or indentures, by Act of said Holders delivered to the
Company[, the Guarantor] and the Trustee, the Company, when authorized by a
Board Resolution, [the Guarantor, when authorized by a Guarantor's Board
Resolution,] and the Trustee may enter into an indenture or indentures supple
mental 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 the Securities of each such series under
this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected thereby,

            (1) change the Maturity of the principal of, or the Stated Maturity
      of any premium on, or any installment of interest on, any Security, or
      reduce the


                                                                              95


      principal amount thereof or the interest or any premium thereon, or change
      the method of computing the amount of principal thereof or interest
      thereon on any date or change any Place of Payment where, or the coin or
      currency in which, any Security or any premium or interest thereon is
      payable, or impair the right to institute suit for the enforcement of any
      such payment on or after the Maturity or the Stated Maturity, as the case
      may be, thereof (or, in the case of redemption or repayment, on or after
      the Redemption Date or the Repayment Date, as the case may be); 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 or Section 513,
      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.

            A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, 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 Securityholders 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


                                                                              96


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
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not
(except to the extent required in the case of a supplemental indenture entered
into under Section 901(4) or 901(6)) be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

            Section 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 to the extent provided therein.

            Section 905. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the TIA 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
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.

                                   ARTICLE TEN

                                    COVENANTS


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            Section 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. With
respect to each series of Securities, the Company will duly and punctually pay
the principal of (and premium, if any) and interest on such Securities in
accordance with their terms and this Indenture, and will duly comply with all
the other terms, agreements and conditions contained in, or made in the
Indenture for the benefit of, the Securities of such series.

            Section 1002. MAINTENANCE OF OFFICE OR AGENCY. The Company will
maintain an office or agency in each Place of Payment where Securities may be
presented or surrendered for payment, 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 will
give prompt written notice to the Trustee of the location, and of any change in
the location, of such office or agency. If at any time the Company shall fail to
maintain such 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 principal Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee its agent to receive all such presentations,
surrenders, notices and demands.

            [The Guarantor will maintain an office or agency in each Place of
Payment where Securities to which the Guarantee applies may be presented or
surrendered for payment pursuant to the Guarantee and where notices and demands
to or upon the Guarantor in respect of the Guarantee and this Indenture may be
served. The Guarantor will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Guarantor shall fail to maintain any such office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders and demands may be made or served at the Principal Corporate Trust
Office of the Trustee, and the Guarantor hereby appoints the Trustee as its
agent to receive all such presentations, surrenders and demands.]


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            Section 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST. If
the Company shall at any time act as its own Paying Agent for 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 action or failure
to act.

            Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
(and premium, if any) or interest on, any Securities of such series, 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 action or failure so to act.

            The Company will cause each Paying Agent other than the Trustee for
any series of Securities 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 principal of (and
      premium, if any) or interest on Securities of such series 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 of such series) in the making of any
      such payment of principal (and premium, if any) or interest on the
      Securities of such series; 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


                                                                              99


      by such Paying Agent.

            The Company [or the Guarantor] may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture with respect to any
series of Securities or for any other purpose, pay, or by Company Order [or
Guarantor Order] direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company[, the Guarantor] or such Paying Agent in respect of each
and every series of Securities as to which it seeks to discharge this Indenture
or, if for any other purpose, all sums so held in trust by the Company [or the
Guarantor] in respect of all Securities, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company[,
the Guarantor] or such Paying Agent; and, upon such payment by 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 [or the Guarantor], in trust for the payment of the
principal of (and premium, if any) or interest on any Security of any series and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall be paid to the Company on Company
Request[(or if deposited by the Guarantor, paid to the Guarantor upon Guarantor
Request)], or (if then held by the Company [or the Guarantor]) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company [and the Guarantor] 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. The Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company [and the
Guarantor] mail to the Holders of the Securities as to which the money to be
repaid was held in trust, as their names and addresses appear in the Security
Register, a notice that such moneys remain unclaimed and that, after a date
specified in the notice, which shall not be less than 30 days from the date on
which the notice was first mailed


                                                                             100


to the Holders of the Securities as to which the money to be repaid was held in
trust, any unclaimed balance of such moneys then remaining will be paid to the
Company [or the Guarantor, as the case may be,] free of the trust formerly
impressed upon it.

            The Company initially authorizes the Trustee to act as Paying Agent
for the Securities on its behalf. The Company may at any time and from time to
time authorize one or more Persons to act as Paying Agent in addition to or in
place of the Trustee with respect to any series of Securities issued under this
Indenture.

            Section 1004. STATEMENT AS TO COMPLIANCE. The Company [and the
Guarantor each] will deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company [or
the Guarantor, as the case may be], stating that

            (1) a review of the activities of the Company [or the Guarantor, as
      the case may be,] during such year and of its performance under this
      Indenture and under the terms of the Securities has been made under his
      supervision; and

            (2) to the best of his knowledge, based on such review, the Company
      [or the Guarantor, as the case may be,] has complied with all conditions
      and covenants under this Indenture through such year, or, if there has
      been a default in the fulfillment of any such obligation, specifying each
      such default known to him and the nature and status thereof.

            For purposes of this Section 1004, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant to
the terms of this Indenture.

            Section 1005. CORPORATE EXISTENCE. Subject to Article Eight [each
of] the Company [and the Guarantor] will


                                                                             101


do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence.

            Section 1006. LIMITATION ON LIENS. So long as any Securities are
Outstanding, [the Company will not,] [neither the Company nor the Guarantor
will,] nor will it permit any of its [respective] Subsidiaries to create,
assume, incur or suffer to exist (i) any Lien upon any stock or indebtedness of
any Subsidiary, whether owned on the date of this Indenture or hereafter
acquired, to secure any Debt of the Company[, the Guarantor] or any other Person
(other than the Securities), and (ii) any Lien upon any other Property, whether
owned or leased on the date of this Indenture, or thereafter acquired, to secure
any Debt of the Company[, the Guarantor] or any other person (other than the
Securities) without in any such case making effective provision whereby all of
the Securities Outstanding shall be directly secured equally and ratably with
such Debt, excluding, however, from the operation of the foregoing provisions of
this Section 1006 any Lien existing on the date of this Indenture or any Lien
upon stock or indebtedness or other Property of any Person existing at the time
such Person becomes a Subsidiary, or existing upon stock or indebtedness of a
Subsidiary or any other Property at the time of acquisition of such stock or
indebtedness or other Property, and any extension, renewal or replacement (or
successive extensions, renewals or replacements) in whole or in part of any such
Lien; PROVIDED, however, that the principal amount of Debt secured thereby shall
not exceed the principal amount of Debt so secured at the time of such
extension, renewal or replacement; and PROVIDED further, that such Lien shall be
limited to all or such part of the stock or indebtedness or other Property which
secured the Lien so extended, renewed or replaced.

            Notwithstanding the foregoing, [each of] the Company [and the
Guarantor] may, and may permit any Subsidiary to, create, assume, incur or
suffer to exist (i) any Permitted Liens and (ii) any Lien upon any Property
without equally and ratably securing the Securities if the aggregate amount of
all Debt then outstanding secured by such Lien and all similar Liens does not
exceed 15% of the total consolidated stockholders' equity (including preferred
stock) of the [Company] [Guarantor] as shown on the audited consolidated balance
sheet contained in the latest annual report to stockholders of the [Company]
[Guarantor];


                                                                             102


PROVIDED that Debt secured by Permitted Liens shall not be included in the
amount of such secured Debt.

            Section 1007. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. So long
as any Securities are Outstanding [the Company will not,] [neither the Company
nor the Guarantor will,] nor will it permit any of its [respective] Subsidiaries
to, enter into any arrangement with any Person pursuant to which the Company[,
the Guarantor] or any Subsidiary leases any Property that has been or is to be
sold or transferred by the Company[, the Guarantor] or the Subsidiary to such
Person (a "sale and leaseback transaction") unless (i) the Company[, the
Guarantor] or such Subsidiary would be entitled to secure the Property to be
leased (without equally and ratably securing the Securities Outstanding) in an
amount equal to the present value of the lease payments with respect to the term
of the lease remaining on the date as of which the amount is being determined
under the provisions described in Section 1006; (ii) the lease is for a term,
including renewals at the option of the lessee, of not more than five years;
(iii) the lease is between the Company[, the Guarantor] [and] [or] a Subsidiary
or between Subsidiaries; and (iv) the lease is of Property executed by the time
of, or within 12 months after the latest of, the acquisition, the completion of
construction or improvement, or the commencement of commercial operation of the
Property.

            Section 1008. WAIVER OF CERTAIN COVENANTS. The Company [or the
Guarantor or both] may omit in respect of any series of Securities, in any
particular instance, to comply with any covenant or condition set forth in
Section 1006, if before or after the time for such compliance the Holders of at
least a majority in principal amount of the Securities at the time Outstanding
of such series shall, by Act of such Securityholders, 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 [and the Guarantor] and the
duties of the Trustee in


                                                                             103


respect of any such covenant or condition shall remain in full force and effect.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

            Section 1101. APPLICABILITY OF ARTICLE. The Company may reserve the
right to redeem and pay before Stated Maturity all or any part of the Securities
of any series, either by optional redemption, sinking or purchase fund or
analogous obligation or otherwise, by provision therefor in the form of Security
for such series established and approved pursuant to Section 202 and on such
terms as are specified in such form or in the Board Resolution or indenture
supplemental hereto with respect to Securities of such series as provided in
Section 301. Redemption of Securities of any series shall be made in accordance
with the terms of such Securities and, to the extent that this Article does not
conflict with such terms, the succeeding Sections of this Article.

            Section 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of
the Company to redeem any Securities redeemable at the election of the Company
shall be evidenced by, or made pursuant to authority granted by, a Board
Resolution. In case of any redemption at the election of the Company of any
Securities of any series, the Company shall, at least 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 and of
the principal amount of Securities of such series to be redeemed.

            In the case of any redemption of Securities (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (ii) 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
evidencing compliance with such restriction or condition.

            Section 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If
less than all the Securities of like tenor and terms of any series are to be
redeemed, the


                                                                             104


particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may include provision for the
selection for redemption of portions of the principal of Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of that series. Unless otherwise provided in the terms of a
particular series of Securities, the portions of the principal of Securities so
selected for partial redemption shall be equal to the minimum authorized
denomination of the Securities of such series, or an integral multiple thereof,
and the principal amount which remains outstanding shall not be less than the
minimum authorized denomination for Securities of such series. If less than all
the Securities of unlike tenor and terms of a series are to be redeemed, the
particular Securities to be redeemed shall be selected by the Company.

            The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected for
partial redemption, 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 of such Security which has been or is to be redeemed.

            Section 1104. 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 his address appearing in the Security Register.

            All notices of redemption shall state:

            (1) the Redemption Date;


                                                                             105


            (2) the Redemption Price;

            (3) if less than all Outstanding Securities of any series are to be
      redeemed, the identification, including CUSIP Numbers (and, in the case of
      partial redemption, the respective principal amounts) of the Securities to
      be redeemed, from the Holder to whom the notice is given;

            (4) that on the Redemption Date the Redemption Price will become due
      and payable upon each such Security, and that interest, if any, thereon
      shall cease to accrue from and after said date;

            (5) the place where such Securities are to be surrendered for
      payment of the Redemption Price, which shall be the office or agency of
      the Company in the Place of Payment; and

            (6) that the redemption is on account of a sinking or purchase fund,
      or other analogous obligation, if that be 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. Such notice shall be
deemed to have been given to each Holder if sent in accordance with Section 105
hereof.

            Section 1105. DEPOSIT OF REDEMPTION PRICE. On or prior to 10:00 a.m.
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 all the Securities which are to be redeemed on that
date.

            Section 1106. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of
Redemption having been given as aforesaid, the Securities so to be 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) such Securities shall cease to bear
interest. Upon surrender of such Securities for redemption in accordance with
the


                                                                             106


notice, such Securities shall be paid by the Company at the Redemption Price.
Installments of interest the Stated Maturity of which is on or prior to the
Redemption Date shall be payable to the Holders of such Securities registered as
such 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 shall, until paid, bear interest
from the Redemption Date at the rate borne by the Security, or as otherwise
provided in such Security.

            Section 1107. SECURITIES REDEEMED IN PART. Any Security which is to
be redeemed only in part shall be surrendered at the office or agency of the
Company in the Place of Payment with respect to that series (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
the same series and Stated Maturity and of like tenor and terms, 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.

            Section 1108. PROVISIONS WITH RESPECT TO ANY SINKING FUNDS. Unless
the form or terms of any series of Securities shall provide otherwise, in lieu
of making all or any part of any mandatory sinking fund payment with respect to
such series of Securities in cash, the Company may at its option (1) deliver to
the Trustee for cancellation any Securities of such series theretofore acquired
by the Company, or (2) receive credit for any Securities of such series (not
previously so credited) acquired by the Company and theretofore delivered to the
Trustee for cancellation or redeemed by the Company other than through the
mandatory sinking fund, and if it does so then (i) Securities so delivered or
credited shall be credited at the applicable


                                                                             107


sinking fund Redemption Price with respect to Securities of such series, and
(ii) on or before the 60th day next preceding each sinking fund Redemption Date
with respect to such series of Securities, the Company will deliver to the
Trustee (A) an Officers' Certificate specifying the portions of such sinking
fund payment to be satisfied by payment of cash and by delivery or credit of
Securities of such series acquired by the Company or so redeemed, and (B) such
Securities so acquired, to the extent not previously surrendered. Such Officers'
Certificate shall also state the basis for such credit and that the Securities
for which the Company elects to receive credit have not been previously so
credited and were not redeemed by the Company through operation of the mandatory
sinking fund, if any, provided with respect to such Securities and shall also
state that no Event of Default with respect to Securities of such series has
occurred and is continuing. All Securities so delivered to the Trustee shall be
canceled by the Trustee and no Securities shall be authenticated in lieu
thereof.

            If the sinking fund payment or payments (mandatory or optional) with
respect to any series of Securities made in cash plus any unused balance of any
preceding sinking fund payments with respect to Securities of such series made
in cash shall exceed $50,000 (or a lesser sum if the Company shall so request),
unless otherwise provided by the terms of such series of Securities, that cash
shall be applied by the Trustee on the sinking fund Redemption Date with respect
to Securities of such series next following the date of such payment to the
redemption of Securities of such series at the applicable sinking fund
Redemption Price with respect to Securities of such series, together with
accrued interest, if any, to the date fixed for redemption, with the effect
provided in Section 1106. The Trustee shall select, in the manner provided in
Section 1103, for redemption on such sinking fund Redemption Date a sufficient
principal amount of Securities of such series to utilize that cash and shall
thereupon cause notice of redemption of the Securities of such series for the
sinking fund to be given in the manner provided in Section 1104 (and with the
effect provided in Section 1106) for the redemption of Securities in part at the
option of the Company. Any sinking fund moneys not so applied or allocated by
the Trustee to the redemption of Securities of such series shall be added to the
next cash sinking fund payment with respect to Securities of such series
received by the Trustee and, together with such


                                                                             108


payment, shall be applied in accordance with the provisions of this Section
1108. Any and all sinking fund moneys with respect to Securities of any series
held by the Trustee at the Maturity of Securities of such series, and not held
for the payment or redemption of particular Securities of such series, shall be
applied by the Trustee, together with other moneys, if necessary, to be
deposited sufficient for the purpose, to the payment of the principal of the
Securities of such series at Maturity.

            On or before each sinking fund Redemption Date provided with respect
to Securities of any series, the Company shall pay to the Trustee in cash a sum
equal to all accrued interest, if any, to the date fixed for redemption on
Securities to be redeemed on such sinking fund Redemption Date pursuant to this
Section 1108.

                                [ARTICLE TWELVE]

                            [GUARANTEE OF SECURITIES]

            [SECTION 1201. GUARANTEE. The Guarantor hereby fully and
unconditionally guarantees to each Holder of a Security of each series issued by
the Company, authenticated and delivered by the Trustee, the due and punctual
payment of the principal (including any amount due in respect of any Original
Issue Discount Security) of and any premium and interest on such Security, and
the due and punctual payment of any sinking fund payments provided for pursuant
to the terms of such Security, when and as the same shall become due and
payable, whether at the Stated Maturity, by declaration of acceleration, call
for redemption, early repayment or otherwise, in accordance with the terms of
such Security and this Indenture. The Guarantor hereby agrees that in the event
of an Event of Default its obligations hereunder shall be as if it were a
principal debtor and not merely a surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of any Security of any series or this
Indenture, any failure to enforce the provisions of any Security of any series
or this Indenture,


                                                                             109


any waiver, modification or indulgence granted to the Company with respect
thereto by the Holder of any Security of any series or the Trustee, or any other
circumstances which may otherwise constitute a legal or equitable discharge of a
surety or guarantor; provided, however, that, notwithstanding the foregoing, no
such waiver, modification or indulgence shall, without the consent of the
Guarantor, increase the principal amount of any Security or the interest rate
thereon or increase any premium payable upon redemption thereof. The Guarantor
hereby waives diligence, presentment, demand of payment, filing of claims with a
court in the event of merger or bankruptcy of the Company, any right to require
a proceeding first against the Company, the benefit of discussion, protest or
notice with respect to any Security or the indebtedness evidenced thereby or
with respect to any sinking fund payment required pursuant to the terms of such
Security issued under this Indenture and all demands whatsoever, and covenants
that this Guarantee will not be discharged with respect to such Security except
by payment in full of the principal thereof and any premium and interest thereon
or as provided in Article Four or Section 802. If any Holder or the Trustee is
required by any court or otherwise to return to the Company, the Guarantor, or
any custodian, trustee, liquidator or other similar official acting in relation
to the Company or the Guarantor any amount paid by the Company or the Guarantor
to the Trustee or such Holder, this Guarantee to the extent theretofore
discharged, shall be reinstated in full force and effect. The Guarantor further
agrees that, as between the Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, the Maturity of the obligations guaranteed hereby
may be accelerated as provided in Article Five hereof for the purposes of this
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby.

            The Guarantor also agrees, to pay any and all reasonable costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Trustee or any Holders in enforcing any rights under this Guarantee.

            The Guarantor hereby waives any right of set off which the Guarantor
may have against the Holder of any Security in respect of any amounts which are
or may become payable by such Holder to the Company.


                                                                             110


            The Guarantor shall be subrogated to all rights of the Holders of
any series of Securities and the Trustee against the Company in respect of any
amounts paid to such Holders and the Trustee by the Guarantor pursuant to the
provisions of the Guarantee; provided, however, that the Guarantor shall not be
entitled to enforce or to receive any payments arising out of or based upon,
such right of subrogation until the principal of, premium, if any, and interest,
if any, on all of the Securities of such series shall have been paid in full.

            No past, present or future stockholder, officer, director, employee
or incorporator of the Guarantor shall have any personal liability under the
Guarantees set forth in this Section 1201 by reason of his, her or its status as
such stockholder, officer, director, employee or incorporator.

            The Guarantee set forth in this Section 1201 shall not be valid or
become obligatory for any purpose with respect to any Security until the
certificate of authentication on such Security shall have been signed by or on
behalf of the Trustee.]

            [SECTION 1202. EXECUTION OF NOTATIONS OF GUARANTEE. To evidence its
Guarantee to the Holders specified in Section 1201, the Guarantor hereby agrees
to execute the notation of the Guarantee in substantially the form set forth in
Section 205 to be endorsed on each Security authenticated and delivered by the
Trustee. The Guarantor hereby agrees that its Guarantee set forth in Section
1201 shall remain in full force and effect notwithstanding any failure to
endorse on any Security a notation of such Guarantee. Each such notation of
Guarantee shall be signed on behalf of the Guarantor by any proper officer of
the Guarantor prior to the authentication of the Security on which it is
endorsed, and the delivery of such Security by the Trustee, after the due
authentication thereof by the Trustee hereunder, shall constitute due delivery
of the Guarantee on behalf of the Guarantor. Such signatures upon the notation
of the Guarantee may be manual


                                                                             111


or facsimile signatures of any present, past or future proper officer of the
Guarantor and may be imprinted or otherwise reproduced below the notation of the
Guarantee, and in case any such proper officer of the Guarantor who shall have
signed the notation of the Guarantee shall cease to be such officer before the
Security on which such notation is endorsed shall have been authenticated and
delivered by the Trustee or disposed of by the Company, such Security
nevertheless may be authenticated and delivered or disposed of as though the
person who signed the notation of the Guarantee had not ceased to be such
officer of the Guarantor.]


                                                                             112


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

                                        WHITE MOUNTAINS INSURANCE GROUP,
                                        LTD.

                                        by

                                             Name:
                                             Title:


                                        FUND AMERICAN COMPANIES, INC.,

                                        by

                                             Name:
                                             Title:


                                        BANK ONE, NATIONAL ASSOCIATION,

                                        by

                                             Name:
                                             Title:



                                                                     Exhibit 4.3

                        [Form of Subordinated Indenture]

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

                      WHITE MOUNTAINS INSURANCE GROUP, LTD.
                       [and FUND AMERICAN COMPANIES, INC.]

                                       and

                         BANK ONE, NATIONAL ASSOCIATION
                                     Trustee

                             SUBORDINATED INDENTURE

                           Dated as of ________, 200_

                 Providing for Issuance of Securities in Series

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



CROSS-REFERENCE TABLE

  TIA                                                                  Indenture
Section                                                                 Section

310(a)(1) ...........................................................   609
   (a)(2) ...........................................................   609
   (a)(3) ...........................................................   N.A.
   (a)(4) ...........................................................   N.A.
      (b) ...........................................................   608; 610
      (c) ...........................................................   N.A.
   311(a) ...........................................................   613
      (b) ...........................................................   613
      (c) ...........................................................   N.A.
   312(a) ...........................................................   701
      (b) ...........................................................   702
      (c) ...........................................................   702
   313(a) ...........................................................   703
   (b)(1) ...........................................................   N.A.
   (b)(2) ...........................................................   703
      (c) ...........................................................   703
      (d) ...........................................................   703
   314(a) ...........................................................   704
      (b) ...........................................................   N.A.
   (c)(1) ...........................................................   102
   (c)(2) ...........................................................   102
   (c)(3) ...........................................................   N.A.
      (d) ...........................................................   N.A.
      (e) ...........................................................   102
   315(a) ...........................................................   601
      (b) ...........................................................   602
      (c) ...........................................................   602
      (d) ...........................................................   602
      (e) ...........................................................   602
316(a)(last sentence) ...............................................   502
(a)(1)(A) ...........................................................   512
(a)(1)(B) ...........................................................   502
   (a)(2) ...........................................................   N.A.
      (b) ...........................................................   508
317(a)(1) ...........................................................   503
   (a)(2) ...........................................................   504
      (b) ...........................................................   1003
   318(a) ...........................................................   107
                           N.A. means Not Applicable.

- ----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.



                            TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

Recitals of the Company [and Guarantor]........................................1
Agreements of the Parties......................................................1

                                   ARTICLE ONE

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

Section 101.  DEFINITIONS......................................................2
                    Act........................................................2
                    Affiliate..................................................2
                    Authenticating Agent.......................................3
                    Board of Directors.........................................3
                    Board Resolution...........................................3
                    Business Day...............................................3
                    Commission.................................................3
                    Company....................................................3
                    Company Request............................................3
                    Company Order..............................................3
                    Company Consent............................................3
                    Corporate Trust Office.....................................3
                    Debt.......................................................4
                    Defaulted Interest.........................................4
                    Depositary.................................................4
                    Event of Default...........................................4
                    Global Security............................................4
                    [Guarantee................................................4]
                    [Guarantor................................................4]
                    [Guarantor Board of Directors.............................5]
                    [Guarantor's Board Resolution.............................5]
                    [Guarantor Request........................................5]
                    [Guarantor Order..........................................5]
                    [Guarantor Consent........................................5]
                    Holder.....................................................5
                    Indenture..................................................5
                    this Indenture.............................................5
                    Interest...................................................5
                    Interest Payment Date......................................5
                    Junior Subordinated Securities.............................5
                    Maturity...................................................5
                    Officers' Certificate......................................5
                    Opinion of Counsel.........................................6



                    Original Issue Discount Security...........................6
                    Outstanding................................................6
                    Paying Agent...............................................7
                    Person.....................................................7
                    Place of Payment...........................................7
                    Predecessor Securities.....................................8
                    Redemption Date............................................8
                    Redemption Price...........................................8
                    Regular Record Date........................................8
                    Repayment Date.............................................8
                    Repayment Price............................................8
                    Responsible Officer........................................8
                    Security...................................................8
                    Securities.................................................8
                    Security Register..........................................9
                    Security Registrar.........................................9
                    Securityholder.............................................9
                    Special Record Date........................................9
                    Stated Maturity............................................9
                    Subsidiary.................................................9
                    Trust Indenture Act.......................................10
                    TIA.......................................................10
                    Trustee...................................................10
                    U.S. Government Obligations...............................10
                    Vice President............................................10
                    Voting Stock..............................................10
Section 102.  COMPLIANCE CERTIFICATES AND OPINIONS............................10
Section 103.  FORM OF DOCUMENTS DELIVERED TO TRUSTEE..........................11
Section 104.  ACTS OF SECURITYHOLDERS.........................................12
Section 105.  NOTICES, ETC., TO TRUSTEE [, GUARANTOR] AND COMPANY.............14
Section 106.  NOTICES TO SECURITYHOLDERS; WAIVER..............................14
Section 107.  CONFLICT WITH TRUST INDENTURE ACT...............................15
Section 108.  EFFECT OF HEADINGS AND TABLE OF CONTENTS........................15
Section 109.  SUCCESSORS AND ASSIGNS..........................................15
Section 110.  SEPARABILITY CLAUSE.............................................15
Section 111.  BENEFITS OF INDENTURE...........................................15
Section 112.  GOVERNING LAW...................................................15
Section 113.  COUNTERPARTS....................................................15
Section 114.  JUDGMENT CURRENCY...............................................16

                                   ARTICLE TWO

                                 SECURITY FORMS

Section 201.  FORMS GENERALLY.................................................16
Section 202.  FORMS OF SECURITIES.............................................17



Section 203.  FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.................17
Section 204.  SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY............18
[SECTION 205.  FORM OF NOTATION OF GUARANTEE.................................20]

                                  ARTICLE THREE

                                 THE SECURITIES

Section 301.  GENERAL TITLE; GENERAL LIMITATIONS; ISSUABLE IN SERIES;
                 TERMS OF PARTICULAR SERIES...................................21
Section 302.  DENOMINATIONS...................................................24
Section 303.  EXECUTION, AUTHENTICATION AND DELIVERY AND DATING...............25
Section 304.  TEMPORARY SECURITIES............................................27
Section 305.  REGISTRATION, TRANSFER AND EXCHANGE.............................27
Section 306.  MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES................29
Section 307.  PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED..................30
Section 308.  PERSONS DEEMED OWNERS...........................................31
Section 309.  CANCELLATION....................................................32
Section 310.  COMPUTATION OF INTEREST.........................................32
Section 311.  MEDIUM-TERM SECURITIES..........................................32
Section 312.  CUSIP NUMBERS...................................................33
SECTION 313.  GLOBAL SECURITIES...............................................33

                                  ARTICLE FOUR

                    SATISFACTION AND DISCHARGE OF INDENTURE;
                          DEFEASANCE; UNCLAIMED MONEYS

SECTION 401.  APPLICABILITY OF ARTICLE........................................35
SECTION 402.  SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE.............35
SECTION 403.  CONDITIONS OF DEFEASANCE........................................37
SECTION 404.  APPLICATION OF TRUST MONEY......................................38
SECTION 405.  REPAYMENT TO COMPANY [OR GUARANTOR].............................38
SECTION 406.  INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS.......................39
SECTION 407.  REINSTATEMENT...................................................39

                                  ARTICLE FIVE

                                    REMEDIES

Section 501.  EVENTS OF DEFAULT...............................................39
Section 502.  ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT..............41
Section 503.  COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.43
Section 504.  TRUSTEE MAY FILE PROOFS OF CLAIM................................44



Section 505.  TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.....45
Section 506.  APPLICATION OF MONEY COLLECTED..................................45
Section 507.  LIMITATION ON SUITS.............................................45
Section 508.  UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO RECEIVE PRINCIPAL,
                PREMIUM AND INTEREST..........................................46
Section 509.  RESTORATION OF RIGHTS AND REMEDIES..............................47
Section 510.  RIGHTS AND REMEDIES CUMULATIVE..................................47
Section 511.  DELAY OR OMISSION NOT WAIVER....................................47
Section 512.  CONTROL BY SECURITYHOLDERS......................................47
Section 513.  WAIVER OF PAST DEFAULTS.........................................48
Section 514.  UNDERTAKING FOR COSTS...........................................48
Section 515.  WAIVER OF STAY OR EXTENSION LAWS................................49

                                   ARTICLE SIX

                                   THE TRUSTEE

Section 601.  CERTAIN DUTIES AND RESPONSIBILITIES.............................49
Section 602.  NOTICE OF DEFAULTS..............................................50
Section 603.  CERTAIN RIGHTS OF TRUSTEE.......................................51
Section 604.  NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES..........52
Section 605.  MAY HOLD SECURITIES.............................................52
Section 606.  MONEY HELD IN TRUST.............................................52
Section 607.  COMPENSATION AND REIMBURSEMENT..................................53
Section 608.  DISQUALIFICATION; CONFLICTING INTERESTS.........................53
Section 609.  CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.........................54
Section 610.  RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR...............54
Section 611.  ACCEPTANCE OF APPOINTMENT BY SUCCESSOR..........................56
Section 612.  MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.....57
Section 613.  PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY...............57
Section 614.  APPOINTMENT OF AUTHENTICATING AGENT.............................62

                                  ARTICLE SEVEN

                      SECURITYHOLDERS' LISTS AND REPORTS BY
                        TRUSTEE [, GUARANTOR] AND COMPANY

Section 701.  COMPANY [AND GUARANTOR] TO FURNISH TRUSTEE NAMES AND ADDRESSES
                OF SECURITYHOLDERS............................................64
Section 702.  PRESERVATION OF INFORMATION; COMMUNICATIONS TO SECURITYHOLDERS..64



Section 703.  REPORTS BY TRUSTEE..............................................66
Section 704.  REPORTS BY COMPANY [AND GUARANTOR]..............................68

                                  ARTICLE EIGHT

           CONSOLIDATION, AMALGAMATION, MERGER, CONVEYANCE OR TRANSFER

Section 801.  COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS............69
Section 802.  SUCCESSOR PERSON SUBSTITUTED FOR COMPANY........................69
[Section 803.  Guarantor May Consolidate, etc., only on Certain Terms........70]
[Section 804.  Successor Person Substituted for Guarantor....................70]

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

Section 901.  SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS......71
Section 902.  SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.........72
Section 903.  EXECUTION OF SUPPLEMENTAL INDENTURES............................73
Section 904.  EFFECT OF SUPPLEMENTAL INDENTURES...............................74
Section 905.  CONFORMITY WITH TRUST INDENTURE ACT.............................74
Section 906.  REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES..............74

                                   ARTICLE TEN

                                    COVENANTS

Section 1001.  PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.....................74
Section 1002.  MAINTENANCE OF OFFICE OR AGENCY................................74
Section 1003.  MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST................75
Section 1004.  STATEMENT AS TO COMPLIANCE.....................................77
Section 1005.  CORPORATE EXISTENCE............................................77

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

Section 1101.  APPLICABILITY OF ARTICLE.......................................78
Section 1102.  ELECTION TO REDEEM; NOTICE TO TRUSTEE..........................78
Section 1103.  SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED..............78
Section 1104.  NOTICE OF REDEMPTION...........................................79
Section 1105.  DEPOSIT OF REDEMPTION PRICE....................................80
Section 1106.  SECURITIES PAYABLE ON REDEMPTION DATE..........................80
Section 1107.  SECURITIES REDEEMED IN PART....................................80
Section 1108.  PROVISIONS WITH RESPECT TO ANY SINKING FUNDS...................81


                                 ARTICLE TWELVE

                                  SUBORDINATION

Section 1201.  AGREEMENT OF SECURITYHOLDERS THAT SECURITIES SUBORDINATED TO
                 EXTENT PROVIDED..............................................82
Section 1202.  COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO SECURITIES IN
                 CERTAIN CIRCUMSTANCES........................................83
Section 1203.  SECURITIES SUBORDINATED TO PRIOR PAYMENTS OF ALL SENIOR
                 INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF
                 THE COMPANY..................................................84
Section 1204.  SECURITYHOLDERS TO BE SUBROGATED TO RIGHT OF HOLDERS OF SENIOR
                 INDEBTEDNESS.................................................85
Section 1205.  OBLIGATION OF THE COMPANY UNCONDITIONAL........................85
Section 1206.  TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN ABSENCE
                 OF NOTICE....................................................86
Section 1207.  APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT.............86
Section 1208.  SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
                 COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS....................87
Section 1209.  SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION
                 OF SECURITIES................................................87
Section 1210.  RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS...................87
Section 1211.  ARTICLE TWELVE NOT TO PREVENT EVENTS OF DEFAULT................87

                                [ARTICLE THIRTEEN

                            [GUARANTEE OF SECURITIES]

[SECTION 1301. GUARANTEE.....................................................88]
[SECTION 1302. SUBORDINATION OF GUARANTEE....................................89]
[SECTION 1303. EXECUTION OF NOTATIONS OF GUARANTEE...........................90]


                                                                               1


[To be modified as appropriate for issuances of securities by White Mountains
Insurance Group, Ltd. or issuances of securities by Fund American Companies,
Inc. which will be guaranteed by White Mountains Insurance Group, Ltd.]

                                    [Form of]

                        SUBORDINATED INDENTURE (this "Indenture") between WHITE
                  MOUNTAINS INSURANCE GROUP, LTD. a company existing under the
                  laws of Bermuda (the ["Company"] ["Guarantor"]) having its
                  principal office at 80 South Main Street, Hanover, New
                  Hampshire 03755-2053, [FUND AMERICAN COMPANIES, INC., a
                  Delaware corporation (the "Company") having its principal
                  office at One Beacon Street, Boston, Massachusetts
                  02108-3100], and BANK ONE, NATIONAL ASSOCIATION, trustee
                  (hereinafter called the "Trustee"), is made and entered into
                  as of this ______ day of ________, 200_.

                             Recitals of the Company

            The Company [and the Guarantor each] has duly authorized the
execution and delivery of this Indenture to provide for [,in the case of the
Company,] the issuance of [, and in the case of the Guarantor, the guarantee
of,] the Company's debentures, notes, bonds or other evidences of indebtedness,
to be issued in one or more fully registered series.

            All things necessary to make this Indenture a valid agreement of
[each of] the Company [and the Guarantor], in accordance with its terms, have
been done.

                            Agreements of the Parties

            To set forth or to provide for the establishment of the terms and
conditions upon which the Securities are and are to be authenticated, issued and
delivered, and in consideration of the premises and the purchase of Securities
by the Holders thereof, it is mutually covenanted and agreed as follows, for the
equal and proportionate benefit of all Holders of the Securities or of a series
thereof, as the case may be:

                               ARTICLE ONE


                                                                               2


                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

            Section 101. DEFINITIONS. For all purposes of this Indenture and of
any indenture supplemental hereto, 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 or by Commission rule under 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 in the United States of America at the date of such
      computation;

            (4) all references in this instrument to designated "Articles",
      "Sections" and other subdivisions are to the designated Articles, Sections
      and other subdivisions of this instrument as originally executed. 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; and

            (5) "including" and words of similar import shall be deemed to be
      followed by "without limitation". Certain terms, used principally in
      Article Six, are defined in that Article.


                                                                               3


            "Act", when used with respect to any Security-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 to
authenticate Securities under Section 614.

            "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 and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

            "Business Day" means each day which is neither a Saturday, Sunday or
other day on which banking institutions in the pertinent Place or Places of
Payment are authorized or required by law or executive order to be closed.

            "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.

            "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor


                                                                               4


replaces it and, thereafter, "Company" shall mean the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the Securities.

            "Company Request", "Company Order" and "Company Consent" mean,
respectively, a written request, order or consent signed in the name of the
Company by its Chairman of the Board, President or a Vice President, and by its
Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.

            "Corporate Trust Office" means the principal office of the Trustee
in [    ] at which at any particular time its corporate trust business shall be
principally administered, which office at the date hereof is located at
[      ], except that with respect to the presentation of Securities for
payment or for registration of transfer and exchange, such term shall mean the
office or the agency of the Trustee in said city at which at any particular
time its corporate agency business shall be conducted, which office at the date
hereof is located at [    ].

            "Debt" means indebtedness for money borrowed.

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

            "Depositary" means, unless otherwise specified by the Company
pursuant to either Section 204 or 301, with respect to Securities of any series
issuable or issued as a Global Security, The Depository Trust Company, New York,
New York, or any successor thereto registered as a clearing agency under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation.

            "Event of Default" has the meaning specified in Article Five.

            "Global Security" means with respect to any series of Securities
issued hereunder, a Security which is executed by the Company and authenticated
and delivered by the


                                                                               5


Trustee to the Depositary or pursuant to the Depositary's instruction, all in
accordance with this Indenture and an indenture supplemental hereto, if any, or
Board Resolution and pursuant to a Company Request, which shall be registered in
the name of the Depositary or its nominee and which shall represent, and shall
be denominated in an amount equal to the aggregate principal amount of, all of
the Outstanding Securities of such series or any portion thereof, in either case
having the same terms, including, without limitation, the same original issue
date, date or dates on which principal is due, and interest rate or method of
determining interest.

            ["Guarantee" means the irrevocable and unconditional guarantee by
the Guarantor of any Security of any series of the Company authenticated and
delivered pursuant to Article Twelve.]

            ["Guarantor" means the Person named as the "Guarantor" in the first
paragraph of this instrument until a successor replaces it and, thereafter,
"Guarantor" shall mean the successor.]

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

            ["Guarantor's Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Guarantor to have
been duly adopted by the Guarantor Board of Directors.]

            ["Guarantor Request", "Guarantor Order", "Guarantor Consent" means,
respectively, a written request, order or consent signed in the name of the
Guarantor by its Chairman of the Board, President or a Vice President, and by
its Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.]

            "Holder", when used with respect to any Security, means a
Securityholder.


                                                                               6


            "Indenture" or "this 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 particular series of Securities
established as contemplated by Section 301.

            "Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

            "Interest Payment Date", when used with respect to any series of
Securities, means the Stated Maturity of any installment of interest on those
Securities.

            ["Junior Subordinated Securities" means the securities issued under
the Junior Subordinated Indenture dated as of ________, 2001, between the
Company and [        ]].

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

            "Officers' Certificate" means [, with respect to the company or the
Guarantor,] a certificate signed by the Chairman of the Board, the President or
a Vice President, and by the Treasurer, an Assistant Treasurer, the Controller,
an Assistant Controller, the Secretary or an Assistant Secretary of the Company
[or the Guarantor, as the case may be], and delivered to the Trustee. Wherever
this Indenture requires that an Officers' Certificate be signed also by an
engineer or an accountant or other expert, such engineer, accountant or other
expert (except as otherwise expressly provided in this Indenture) may be in the
employ of the Company [or the Guarantor, as the case may be], and shall be
acceptable to the Trustee.

            "Opinion of Counsel" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be an employee of or
of counsel to the


                                                                               7


Company [or the Guarantor]. Such counsel shall be acceptable to the Trustee,
whose acceptance shall not be unreasonably withheld.

            "Original Issue Discount Security" means (i) 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, and (ii) any
other Security deemed an Original Issue Discount Security for United States
Federal income tax purposes.

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

            (i) such Securities theretofore canceled by the Trustee or delivered
      to the Trustee for cancellation;

            (ii) such Securities for whose payment or redemption 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 therefor satisfactory
      to the Trustee has been made; and

            (iii) such Securities in exchange for or in lieu of which other
      Securities have been authenticated and delivered pursuant to this
      Indenture, or which shall have been paid pursuant to the terms of Section
      306 (except with respect to any such Security as to which proof
      satisfactory to the Trustee is presented that such Security is held by a
      person in whose hands such Security is a legal, valid and binding
      obligation of the Company).

In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, (i) the principal amount of any Original
Issue Discount Security that shall be deemed to be


                                                                               8


Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of the taking of such action upon a declaration of
acceleration of the Maturity thereof and (ii) Securities 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. In
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Responsible Officer assigned to the corporate trust
department of the Trustee knows to be owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or such other obligor 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 to act as owner 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.

            "Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.

            Notwithstanding the foregoing, the Company may, and may permit any
Restricted Subsidiary to, create, assume, incur or suffer to exist any Mortgage
upon any Principal Property without equally and ratably securing the Senior Debt
Securities if the aggregate amount of all Debt then outstanding secured by such
Mortgage and all similar Mortgages does not exceed [10]% of the total
consolidated stockholders' equity (including preferred stock) of the Company as
shown on the audited consolidated balance sheet contained in the latest annual
report to stockholders of the Company; PROVIDED that Debt secured by Permitted
Mortgages shall not be included in the amount of such secured Debt.

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

            "Place of Payment" means with respect to any


                                                                               9


series of Securities issued hereunder the city or political subdivision so
designated with respect to the series of Securities in question in accordance
with the provisions of Section 301.

            "Predecessor Securities" 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.

            "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 specified in the Security at which it is to be
redeemed pursuant to this Indenture.

            "Regular Record Date" for the interest payable on any Security on
any Interest Payment Date means the date specified in such Security as the
Regular Record Date.

            "Repayment Date", when used with respect to any Security to be
repaid, means the date fixed for such repayment pursuant to such Security.

            "Repayment Price", when used with respect to any Security to be
repaid, means the price at which it is to be repaid pursuant to such Security.

            "Responsible Officer", when used with respect to the Trustee, means
the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
senior trust officer or


                                                                              10


trust officer, the controller and any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.

            "Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, of any series authenticated and delivered from time to time under this
Indenture.

            "Security Register" shall have the meaning specified in Section 305.

            "Security Registrar" means the Person who keeps the Security
Register specified in Section 305.

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

            "Senior Indebtedness" means the principal of and premium, if any,
and interest on the following whether outstanding on the date of execution of
this Indenture or thereafter incurred or created (i) indebtedness of the Company
[or the Guarantor] for money borrowed by the Company [or the Guarantor]
(including purchase money obligations with an original maturity in excess of one
year) or evidenced by securities (other than the Junior Subordinated Securities
and the Securities [and, in each case, any guarantees by the Guarantor
thereof]), notes, bankers' acceptances or other corporate debt securities or
similar instruments issued by the Company [or the Guarantor]; (ii) obligations
with respect to letters of credit; (iii) indebtedness of the Company [or the
Guarantor] constituting a guarantee of indebtedness of others of the type
referred to in the preceding clauses (i) and (ii); or (iv) renewals, extensions
or refundings of any of the indebtedness referred to in the preceding clauses
(i), (ii) and (iii) unless, in the case of any particular


                                                                              11


indebtedness, renewal, extension or refunding, under the express provisions of
the instrument creating or evidencing the same, or pursuant to which the same is
outstanding, such indebtedness or such renewal, extension or refunding thereof
is not superior in right of payment to the Securities.

            "Special Record Date" for the payment of any Defaulted Interest (as
defined in Section 307) 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.

            "Subsidiary" of any specified Person means any corporation, limited
liability company, limited or general partnership, business trust or other
business entity at least a majority of whose outstanding Voting Stock shall at
the time be owned, directly or indirectly, by the specified Person or by one or
more of its Subsidiaries, or both.

            "Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended by the Trust Indenture Reform Act of 1990, as in force at the
date as of which this instrument was executed except as provided in Section 905.

            "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 and include each Person who is then a Trustee hereunder. 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.

            "U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (y) 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 as a full faith and
credit


                                                                              12


obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof.

            "Vice President" when used with respect to [the Guarantor,] the
Company or the Trustee means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president",
including, without limitation, an assistant vice president.

            "Voting Stock", as applied to the stock of any Person, means stock
of any class or classes (however designated) having by the terms thereof
ordinary voting power to elect a majority of the members of the board of
directors (or other governing body) of such Person other than stock having such
power only by reason of the happening of a contingency.

            Section 102. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any
application or request by the Company [or the Guarantor] to the Trustee to take
any action under any provision of this Indenture, the Company [or the Guarantor,
as applicable,] shall furnish to the Trustee an Officers' Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such Counsel all such conditions precedent, 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 (except for the written
statement required by 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;


                                                                              13


            (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 the 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 [or the
Guarantor] 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 of the
Company [or the Guarantor, as the case may be,] stating that the information
with respect to such factual matters is in the possession of the Company [or the
Guarantor, as the case may be,], 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.


                                                                              14


            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 consoli dated and
form one instrument.

            Section 104. ACTS OF SECURITYHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Securityholders or Securityholders of any
series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders 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 [or the Guarantor or both of them]. If any Securities are denominated in
coin or currency other than that of the United States, then for the purposes of
determining whether the Holders of the requisite principal amount of Securities
have taken any action as herein described, the principal amount of such
Securities shall be deemed to be that amount of United States dollars that could
be obtained for such principal amount on the basis of the spot rate of exchange
into United States dollars for the currency in which such Securities are
denominated (as evidenced to the Trustee by an Officers' Certificate) as of the
date the taking of such action by the Holders of such requisite principal amount
is evidenced to the Trustee as provided in the immediately preceding sentence.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders
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 [, the Guarantor] and 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


                                                                              15


the affidavit of a witness to such execution or by the 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 an officer of a
corporation or a member of a partnership, on behalf of such corporation or
partnership, 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 the Trustee deems sufficient.

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

            (d) If the Company [or the Guarantor] shall solicit from the Holders
any request, demand, authorization, direction, notice, consent, waiver or other
action, the Company [or the Guarantor, as the case may be,] may, at its option,
by Board Resolution or Guarantor's Board Resolution, as applicable, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
action, but the Company [or the Guarantor, as the case may be,] shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Holders of record at the close of
business on the record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Securities
Outstanding have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for that
purpose the Securities Outstanding shall be computed as of the record date;
provided that no such authorization, agreement or consent by the Holders on the
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months after the record
date.

            (e) Any request, demand, authorization, direc tion, notice, consent,
waiver or other action by the Holder of any Security shall bind the Holder of
every


                                                                              16


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 [or the Guarantor] in reliance thereon whether or not notation of
such action is made upon such Security.

            Section 105. NOTICES, ETC., TO TRUSTEE [, GUARANTOR] AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Securityholders 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 Securityholder or by the Company [or the
      Guarantor] 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

            (2) the Company [or the Guarantor] by the Trustee or by any
      Securityholder shall be sufficient for every purpose hereunder (except as
      provided in Section 501(4) or, in the case of a request for repayment, as
      specified in the Security carrying the right to repayment) if in writing
      and mailed, first-class postage prepaid, to the Company [or the Guarantor,
      as the case may be,] 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 [or
      the Guarantor, as the case may be,].

            Section 106. NOTICES TO SECURITYHOLDERS; WAIVER. Where this
Indenture or any Security provides for notice to Securityholders of any event,
such notice shall be sufficiently given (unless otherwise herein or in such
Security expressly provided) if in writing and mailed, first-class postage
prepaid, to each Securityholder affected by such event, at his address as it
appears in the Security 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 Securityholders is given by mail, neither the failure to
mail such notice, nor


                                                                              17


any defect in any notice so mailed, to any particular Securityholder shall
affect the sufficiency of such notice with respect to other Securityholders.
Where this Indenture or any Security 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 Securityholders 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 as a
result of a strike, work stoppage or otherwise, it shall be impractical to mail
notice of any event to any Securityholder when such notice is required to be
given pursuant to any provision of this Indenture, then any method of
notification as shall be satisfactory to the Trustee [, the Guarantor] and the
Company shall be deemed to be a sufficient giving of such notice.

            Section 107. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with the duties imposed by any of Sections
310 to 317, inclusive, of the Trust Indenture Act through the 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 [each of] the Company [and the Guarantor] 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.


                                                                              18


            Section 111. BENEFITS OF INDENTURE. Nothing in this Indenture or in
any Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Authenticating Agent or
Paying Agent, the Security Registrar and the Holders of Securities (or such of
them as may be affected thereby), any benefit or any legal or equitable right,
remedy or claim under this Indenture.

            Section 112. GOVERNING LAW. This Indenture shall be construed in
accordance with and governed by the laws of the State of New York.

            Section 113. COUNTERPARTS. 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.

            Section 114. JUDGMENT CURRENCY. The Company [and the Guarantor each]
agrees, to the fullest extent that it may effectively do so under applicable
law, that (a) if for the purpose of obtaining judgment in any court it is
necessary to convert the sum due in respect of the principal of, or premium or
interest, if any, on the Securities of any series (the "Required Currency") into
a currency in which a judgment will be rendered (the "Judgment Currency"), the
rate of exchange used shall be the rate at which in ac cordance with normal
banking procedures the Trustee could purchase in New York City the Required
Currency with the Judgment Currency on the Banking Day (as defined below)
immediately preceding the date on which final unappealable judgment is given and
(b) its obligations under this Indenture to make payments in the Required
Currency (i) shall not be discharged or satisfied by any tender, or any recovery
pursuant to any judgment (whether or not entered in accordance with subsection
(a)), in any currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the actual receipt, by the payee,
of the full amount of the Required Currency expressed to be payable in respect
of such payments, (ii) shall be enforceable as an alternative or additional
cause of action for the purpose of recovering in the Required Currency the
amount, if any, by which such actual


                                                                              19


receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "Banking Day" means any day except a Saturday, Sunday or a legal
holiday in New York City or a day on which banking institutions in New York City
are authorized or required by law or executive order to close.

                                   ARTICLE TWO

                                 SECURITY FORMS

            Section 201. FORMS GENERALLY. The Securities shall have 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 laws or regulations or with the
rules of any securities exchange, or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. Any portion of the text of any Security may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Security.

            The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods on steel engraved borders or may
be produced in any other manner, all as determined by the officers executing
such Securities, as evidenced by their execution of such Securities, subject,
with respect to the Securities of any series, to the rules of any securities
exchange on which such Securities are listed.

            Section 202. FORMS OF SECURITIES. Each Security shall be in one of
the forms approved from time to time by or pursuant to a Board Resolution, or
established in one or more indentures supplemental hereto. Prior to the delivery
of a Security to the Trustee for authentication in any form


                                                                              20


approved by or pursuant to a Board Resolution, the Company shall deliver to the
Trustee the Board Resolution by or pursuant to which such form of Security has
been approved, which Board Resolution shall have attached thereto a true and
correct copy of the form of Security which has been approved thereby or, if a
Board Resolution authorizes a specific officer or officers to approve a form of
Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form or a
certificate signed by a Responsible Officer of the Trustee and delivered to the
Company.

[Each Security shall bear a notation of Guarantee in substantially the form set
forth in Section 205. Notwithstanding the foregoing, the notation of Guarantee
to be endorsed on the Securities of any series may have such appropriate
insertions, omissions, substitutions and other corrections from the form thereof
referred to above 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 the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers delivering the same, in each case as evidenced by such delivery.]

            Section 203. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
form of Trustee's Certificate of Authentication for any Security issued pursuant
to this Indenture shall be substantially as follows:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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


                                        [           ],
                                          as Trustee,


                                                                              21


Dated:__________________                By:_____________________________________
                                                            Authorized Signatory

            Section 204. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.
(a) If the Company shall establish pursuant to Sections 202 and 301 that the
Securities of a particular series are to be issued in whole or in part in the
form of one or more Global Securities, then the Company shall execute and the
Trustee or its agent shall, in accordance with Section 303 and the Company
Request delivered to the Trustee or its agent thereunder, authenticate and
deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Securities of such series to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
a Company Request, (ii) shall be registered in the name of the Depositary for
such Global Security or Securities or its nominee, (iii) shall be delivered by
the Trustee or its agent to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for the individual
Securities represented hereby, this Global Security may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary."

            (b) Notwithstanding any other provisions of this Section 204 or of
Section 305, and subject to the provisions of paragraph (c) below, unless the
terms of a Global Security expressly permit such Global Security to be exchanged
in whole or in part for individual Securities, a Global Security may be
transferred, in whole but not in part and in the manner provided in Section 305,
only to a nominee of the Depositary for such Global Security, or to the
Depositary, or a successor Depositary for such Global Security selected or
approved by the Company, or to a nominee of such successor Depositary.


                                                                              22


            (c) (i) If at any time the Depositary for a Global Security notifies
the Company that it is unwilling or unable to continue as Depositary for such
Global Security or if at any time the Depositary for the Securities for such
series ceases to be a clearing agency registered under the Securities Exchange
Act of 1934, as amended, or other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to such Global Security. If a
successor Depositary for such Global Security 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 or its agent, upon
receipt of a Company Request for the authentication and delivery of individual
Securities of such series in exchange for such Global Security, will
authenticate and deliver, individual Securities of such series of like tenor and
terms in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security.

      (ii) The Company may at any time and in its sole discretion determine that
the Securities of any series or portion thereof issued or issuable 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 Request for the authentication and delivery of
individual Securities of such series in exchange in whole or in part for such
Global Security, will authenticate and deliver individual Securities of such
series of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such Global Security or Securities
representing such series or portion thereof in exchange for such Global Security
or Securities.

      (iii) If specified by the Company pursuant to Sections 202 and 301 with
respect to Securities issued or issuable in the form of a Global Security, the
Depositary for such Global Security may surrender such Global Security in
exchange in whole or in part for individual Securities of such series of like
tenor and terms in definitive form on such terms as are acceptable to the
Company and such Depositary. Thereupon the Company shall execute, and the
Trustee or its agent shall authenticate and deliver, without


                                                                              23


service charge, (1) to each Person specified by such Depositary a new Security
or Securities of the same series of like tenor and terms and 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 of like tenor and terms and in
an authorized denomination equal to the difference, if any, between the
principal amount of the surrendered Global Security and the aggregate principal
amount of Securities delivered to the Holders thereof.

      (iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Securities in definitive registered form in
authorized denominations. Upon the exchange of the entire principal amount of a
Global Security for individual Securities, such Global Security shall be
canceled by the Trustee or its agent. Except as provided in the preceding
paragraph, 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 or the
Security Registrar. The Trustee or the Security Registrar shall deliver such
Securities to the Persons in whose names such Securities are so registered.

            [SECTION 205. FORM OF NOTATION OF GUARANTEE. The form of notation of
Guarantee to be endorsed on any Security issued pursuant to this Indenture shall
be substantially as follows:

                              NOTATION OF GUARANTEE

            White Mountains Insurance Group, Ltd., a company existing under the
law of Bermuda (the "Guarantor", which term includes any successor thereto under
the Indenture (the "Indenture") referred to in the Security on which this
notation is endorsed) has unconditionally guaranteed,


                                                                              24


pursuant to the terms of the Guarantee contained in Article Twelve of the
Indenture, the due and punctual payment of the principal of and any premium and
interest on this Security, when and as the same shall become due and payable,
whether at the Stated Maturity, by declaration of acceleration, call for
redemption, early repayment or otherwise, in accordance with the terms of this
Security and the Indenture.

            The obligations of the Guarantor to the Holders of the Securities
and to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth in Article Twelve of the Indenture, and reference is hereby made to such
Article and Indenture for the precise terms of the Guarantee.

            The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Security upon which this notation of
the Guarantee is endorsed shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized signatories.

                                        WHITE MOUNTAINS INSURANCE GROUP, LTD.

                                        by
                                              _______________________________
                                              Name:
                                              Title:]

                                  ARTICLE THREE

                                 THE SECURITIES

            Section 301. GENERAL TITLE; GENERAL LIMITATIONS; ISSUABLE IN SERIES;
TERMS OF PARTICULAR SERIES. The aggregate principal amount of Securities which
may be authenticated and delivered and Outstanding under this Indenture is not
limited.

            The Securities may be issued in one or more series up to an
aggregate principal amount of Securities as from time to time may be authorized
by the Board of Directors. All Securities of each series under this Indenture
shall in


                                                                              25


all respects be equally and ratably entitled to the benefits hereof with respect
to such series without preference, priority or distinction on account of the
actual time of the authentication and delivery or Stated Maturity of the
Securities of such series.

            Each series of Securities shall be created either by or pursuant to
a Board Resolution or by or pursuant to an indenture supplemental hereto. The
Securities of each such series may bear such date or dates, be payable at such
place or places, have such Stated Maturity or Maturities, be issuable at such
premium over or discount from their face value, bear interest at such rate or
rates (which may be fixed or floating), from such date or dates, payable in such
installments and on such dates and at such place or places to the Holders of
Securities registered as such on such Regular Record Dates, or may bear no
interest, and may be redeemable or repayable at such Redemption Price or Prices
or Repayment Price or Prices, as the case may be, whether at the option of the
Holder or otherwise, and upon such terms, all as shall be provided for in or
pursuant to the Board Resolution or in or pursuant to the supplemental indenture
creating that series. There may also be established in or pursuant to a Board
Resolution or in or pursuant to a supplemental indenture prior to the issuance
of Securities of each such series, provision for:

            (1) the exchange or conversion of the Securities of that series, at
      the option of the Holders thereof, for or into new Securities of a
      different series or other securities or other property of the Company[,
      the Guarantor] or another Person, including shares of common stock,
      preferred stock, indebtedness or securities of any kind of the Company[,
      the Guarantor], any Subsidiary of the Company [or of the Guarantor] or of
      any other Person or securities directly or indirectly convertible into or
      exchangeable for any such securities;

            (2) a sinking or purchase fund or other analogous obligation;


                                                                              26


            (3) if other than U.S. dollars, the currency or currencies or units
      based on or related to currencies (including European Currency Units) in
      which the Securities of such series shall be denominated and in which
      payments of principal of, and any premium and interest on, such Securities
      shall or may be payable;

            (4) if the principal of (and premium, if any) or interest, if any,
      on the Securities of such series are to be payable, at the election of the
      Company or a holder thereof, in a currency or currencies or units based on
      or related to currencies (including European Currency Units) other than
      that in which the Securities are stated to be payable, the period or
      periods within which, and the terms and conditions upon which, such
      election may be made;

            (5) if the amount of payments of principal of (and premium, if any)
      or interest, if any, on the Securities of such series may be determined
      with reference to an index based on (i) a currency or currencies or units
      based on or related to currencies (including European Currency Units)
      other than that in which the Securities are stated to be payable, (ii)
      changes in the price of one or more other securities or groups or indexes
      of securities or (iii) changes in the prices of one or more commodities or
      groups or indexes of commodities, or any combination of the foregoing, the
      manner in which such amounts shall be determined;

            (6) if the aggregate principal amount of the Securities of that
      series is to be limited, such limitations, and the maturity date of the
      principal amount of such Securities of that series (which may be fixed or
      extendible), and the rate or rates (which may be fixed or floating) per
      annum at which the Securities of that series will bear interest, if any,
      or the method of determining such rate or rates, and the payment dates and
      record dates relating to such interest payments;

            (7) the exchange of Securities of that series, at the option of the
      Holders thereof, for other Securities of the same series of the same
      aggregate principal amount of a different authorized kind or different


                                                                              27


      authorized denomination or denominations, or both;

            (8) the appointment by the Trustee of an Authenticating Agent in one
      or more places other than the location of the office of the Trustee with
      power to act on behalf of the Trustee and subject to its direction in the
      authentication and delivery of the Securities of any one or more series in
      connection with such transactions as shall be specified in the provisions
      of this Indenture or in or pursuant to the Board Resolution or the
      supplemental indenture creating such series;

            (9) the percentage of their principal amount at which such
      Securities will be issued, and the portion of the principal amount of
      Securities of the series, if other than the total principal amount
      thereof, which shall be payable upon declaration of acceleration of the
      Maturity thereof pursuant to Section 502 or provable in bankruptcy
      pursuant to Section 504;

            (10) any Event of Default with respect to the Securities of such
      series, if not set forth herein and any additions, deletions or other
      changes to the Events of Default set forth herein that shall be applicable
      to the Securities of such series (including a provision making any Event
      of Default set forth herein inapplicable to the Securities of that
      series);

            (11) any covenant solely for the benefit of the Securities of such
      series and any additions, deletions or other changes to the provisions of
      Article Ten or any definitions relating to such Article that shall be
      applicable to the Securities of such series (including a provision making
      any Section of such Article inapplicable to the Securities of such
      series);

            (12) the applicability of Section 402(b) of this Indenture to the
      Securities of such series;

            (13) if the Securities of the series shall be issued in whole or in
      part in the form of a Global Security or


                                                                              28


      Global Securities, the terms and conditions, if any, upon which such
      Global Security or Global Securities may be exchanged in whole or in part
      for other individual Securities; and the Depositary for such Global
      Security or Global Securities (if other than the Depositary specified in
      Section 101 hereof);

            (14) the subordination of the Securities of such series to any other
      indebtedness of the Company [and the Guarantor], including without
      limitation, the Securities of any other series; and

            (15) any other terms of the series, which shall not be inconsistent
      with the provisions of this Indenture,

all upon such terms as may be determined in or pursuant to a Board Resolution or
in or pursuant to a supplemental indenture with respect to such series. All
Securities of the same series shall be substantially identical in tenor and
effect, except as to denomination.

            The form of the Securities of each series shall be established
pursuant to the provisions of this Indenture in or pursuant to the Board
Resolution or in or pursuant to the supplemental indenture creating such series.
The Securities of each series shall be distinguished from the Securities of each
other series in such manner, reasonably satisfactory to the Trustee, as the
Board of Directors may determine.

            Unless otherwise provided with respect to Securities of a particular
series, the Securities of any series may only be issuable in registered form,
without coupons.

            Any terms or provisions in respect of the Securities of any series
issued under this Indenture may be determined pursuant to this Section by
providing in a Board Resolution or supplemental indenture for the method by
which such terms or provisions shall be determined.

            Section 302. DENOMINATIONS. The Securities of each series shall be
issuable in such denominations and


                                                                              29


currency as shall be provided in the provisions of this Indenture or in or
pursuant to the Board Resolution or the supplemental indenture creating such
series. In the absence of any such provisions with respect to the Securities of
any series, the Securities of that series shall be issuable only in fully
registered form in denominations of $1,000 and any integral multiple thereof.

            Section 303. EXECUTION, AUTHENTICATION AND DELIVERY AND DATING. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President, one of its Vice Presidents or its Treasurer under its
corporate seal reproduced thereon and attested by its 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,
notwith standing 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; and the Trustee shall, upon Company Order,
authenticate and make available for delivery such Securities as in this
Indenture provided and not otherwise.

            Prior to any such authentication and delivery, the Trustee shall be
entitled to receive, in addition to any Officers' Certificate and Opinion of
Counsel required to be furnished to the Trustee pursuant to Section 102, and the
Board Resolution and any certificate relating to the issuance of the series of
Securities required to be furnished pursuant to Section 202, an Opinion of
Counsel stating that:

            (1) all instruments furnished to the Trustee conform to the
      requirements of the Indenture and constitute sufficient authority
      hereunder for the Trustee to authenticate and deliver such Securities;


                                                                              30


            (2) the form and terms (or in connection with the issuance of
      medium-term Securities under Section 311, the manner of determining the
      terms) of such Securities have been established in conformity with the
      provisions of this Indenture;

            (3) all laws and requirements with respect to the execution and
      delivery by the Company of such Securities have been complied with, the
      Company has the corporate power to issue such Securities and such
      Securities have been duly authorized and delivered by the Company and,
      assuming due authentication and delivery by the Trustee, constitute legal,
      valid and binding obligations of the Company enforceable in accordance
      with their terms (subject, as to enforcement of remedies, to applicable
      bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium
      or other laws and legal principles affecting creditors' rights generally
      from time to time in effect and to general equitable principles, whether
      applied in an action at law or in equity) and entitled to the benefits of
      this Indenture, equally and ratably with all other Securities, if any, of
      such series Outstanding; and

            (4) such other matters as the Trustee may reasonably request;

and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental hereto, also stating that all laws and
requirements with respect to the form and execution by the Company of the
supplemental indenture with respect to that series of Securities have been
complied with, the Company has cor porate power to execute and deliver any such
supplemental indenture and has taken all necessary corporate action for those
purposes and any such supplemental indenture has been executed and delivered and
constitutes the legal, valid and binding obligation of the Company enforceable
in accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other laws and legal


                                                                              31


principles affecting creditors' rights generally from time to time in effect and
to general equitable principles, whether applied in an action at law or in
equity).

            The Trustee shall not be required to authenticate such Securities if
the issue thereof will adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture.

            Unless otherwise provided in the form of Security for any series,
all Securities shall be dated the date of their 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 manual signature of an authorized signatory, 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 receipt
of the documents required by Section 303, together with a Company Order, the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities 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
of such series shall be exchangeable for definitive Securities of such series
upon surrender of the temporary Securities of such series at the office or
agency of the Company in a Place of Payment, without charge to the Holder; and
upon surrender for cancellation of any one or


                                                                              32


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 such series of authorized denominations and of like
tenor and terms. Until so exchanged the temporary Securities of such series
shall in all respects be entitled to the same bene fits under this Indenture as
definitive Securities of such series.

            Section 305. REGISTRATION, TRANSFER AND EXCHANGE. The Company shall
keep or cause to be kept a register (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, or of
Securities of a particular series, and for transfers of Securities or of
Securities of such series. Any such register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time. At all reasonable times the information contained in such register or
registers shall be available for inspection by the Trustee at the office or
agency to be maintained by the Company as provided in Section 1002.

            Subject to Section 204, upon surrender for transfer of any Security
of any series at the office or agency of the Company in a Place of Payment, the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or transferees, one or more
new Securities of such series of any authorized denominations, of a like
aggregate principal amount and Stated Maturity and of like tenor and terms.

            Subject to Section 204, at the option of the Holder, Securities of
any series may be exchanged for other Securities of such series of any
authorized denominations, of a like aggregate principal amount and Stated
Maturity and of like tenor and 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
make available for delivery, the Securities which the


                                                                              33


Securityholder 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 [and the Guarantor], 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 Trustee) 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.

            Unless otherwise provided in the Security to be transferred or
exchanged, no service charge shall be made on any Securityholder for any
transfer or exchange of Securities, but the Company may (unless otherwise
provided in such Security) require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any transfer
or exchange of Securities, other than exchanges pursuant to Section 304 or 906
not involving any transfer.

            The Company shall not be required (i) 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 the mailing of a notice of redemption of Securities of
such series selected for redemption under Section 1103 and ending at the close
of business on the date of such mailing, or (ii) to transfer or exchange any
Security so selected for redemption in whole or in part, except for the portion
of such Security not so selected for redemption.

            None of the Company, [the Guarantor,] the Trustee, any agent of the
Trustee, any Paying Agent or the Security Registrar 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 for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.

            The Company initially appoints the Trustee to act


                                                                              34


as Security Registrar for the Securities on its behalf. The Company may at any
time and from time to time authorize any Person to act as Security Registrar in
place of the Trustee with respect to any series of Securities issued under this
Indenture.

            Section 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If
(i) any mutilated Security is surrendered to the Trustee, or the Company [, the
Guarantor] and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and (ii) there is delivered to the
Company [, the Guarantor] and the Trustee 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 [, the Guarantor] or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Security, a new Security of
like tenor, series, Stated Maturity and principal amount, 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 [and the Guarantor], 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


                                                                              35


any and all other Securities of the same series 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. Unless
otherwise provided with respect to such Security pursuant to Section 301,
interest on any Security 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.

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

            (1) The Company [or the Guarantor], may elect to make payment of any
      Defaulted Interest to the Persons in whose names any such Securities (or
      their respective Predecessor Securities) are registered at the close of
      business on a Special Record Date for the payment of such Defaulted
      Interest, which shall be fixed in the following manner. The Company [or
      the Guarantor, as the case may be,] shall notify the Trustee in writing of
      the amount of Defaulted Interest proposed to be paid on each such Security
      and the date of the proposed payment, and at the same time the Company [or
      the Guarantor, as the case may be] 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


                                                                              36


      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 nor less than 10 days prior to the date of
      the proposed payment and not less than 10 days after the receipt by the
      Trustee of the notice of the proposed payment. The Trustee shall promptly
      notify the Company [or Guarantor, as the case may be,] of such Special
      Record Date and, in the name and at the expense of the Company [or the
      Guarantor], 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 the Holder of each such Security at his address 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 mailed as
      aforesaid, such Defaulted Interest shall be paid to the Persons in whose
      names such Securities (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 [or the Guarantor] may make payment of any Defaulted
      Interest in any other lawful manner not inconsistent with the requirements
      of any securities exchange on which such Securities may be listed, and
      upon such notice as may be required by such exchange, if, after notice
      given by the Company [or Guarantor, as the case may be,] to the Trustee of
      the proposed payment pursuant to this Clause, such manner of payment shall
      be deemed practicable by the Trustee.

            If any installment of interest the Stated Maturity of which is on or
prior to the Redemption Date for any Security called for redemption pursuant to
Article Eleven is not paid or duly provided for on or prior to the Redemption
Date in accordance with the foregoing provisions of this Section, such interest
shall be payable as part of the Redemption Price of such Securities.


                                                                              37


            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 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 Guarantor],
the Trustee and any agent of the Company [, the Guarantor,] or the Trustee may
treat the Person in whose name any Security is registered in the Security
Register as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any), 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 Guarantor] the Trustee nor
any agent of the Company [, the Guarantor] or the Trustee shall be affected by
notice to the contrary.

            Section 309. CANCELLATION. All Securities surrendered for payment,
redemption, transfer, conversion or exchange or credit against a sinking fund
shall, if surren dered to any Person other than the Trustee, be delivered to the
Trustee and, if not already canceled, shall be promptly canceled by it. The
Company [or the Guarantor] may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company [or the Guarantor] may have acquired in any manner whatsoever,
and all Securities so delivered shall be promptly canceled by the Trustee. No
Security 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. The Trustee shall return all canceled Securities to the Company.

            Section 310. COMPUTATION OF INTEREST. Unless otherwise provided as
contemplated in Section 301, interest on the Securities shall be calculated on
the basis of a 360-day year of twelve 30-day months.

            Section 311. MEDIUM-TERM SECURITIES. Notwithstanding any contrary
provision herein, if all Securities of a series are not to be originally issued
at one time, it shall not be necessary for the Company to deliver to the Trustee
an Officers' Certificate, Board


                                                                              38


Resolution, supplemental indenture, Opinion of Counsel or Company Request
otherwise required pursuant to Sections 202, 301 and 303 at or prior to the time
of authentication of each Security of such series if such documents are
delivered to the Trustee or its agent at or prior to the authentication upon
original issuance of the first Security of such series to be issued; provided
that any subsequent request by the Company to the Trustee to authenticate
Securities of such series upon original issuance shall constitute a
representation and warranty by the Company that as of the date of such request,
the statements made in the Officers' Certificate delivered pursuant to Section
102 shall be true and correct as if made on such date.

            An Officers' Certificate, supplemental indenture or Board Resolution
delivered by the Company to the Trustee in the circumstances set forth in the
preceding paragraph may provide that Securities which are the subject thereof
will be authenticated and delivered by the Trustee or its agent on original
issue from time to time upon the telephonic or written order of persons
designated in such Officers' Certificate, Board Resolution or supplemental
indenture (any such telephonic instructions to be confirmed promptly in writing
by such persons) and that such persons are authorized to determine, consistent
with such Officers' Certificate, supplemental indenture or Board Resolution,
such terms and conditions of said Securities as are specified in such Officers'
Certificate, supplemental indenture or Board Resolution.

            Section 312. 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 of any change in the "CUSIP"


                                                                              39


numbers.

            SECTION 313. GLOBAL SECURITIES. (a) Each Global Security
authenticated under this Indenture shall be registered in the name of the
Depositary designated by the Company for such Global Security or a nominee
thereof and delivered to such Depositary or a nominee thereof or custodian
therefor, and each such Global Security shall constitute a single Security for
all purposes of this Indenture.

            (b) Notwithstanding any other provision of this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary (A) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be a clearing agency registered as such under the Exchange Act or
announces an intention permanently to cease business or does in fact do so or
(ii) there shall have occurred and be continuing an Event of Default with
respect to such Global Security.

            (c) If any Global Security is to be exchanged for other Securities
or canceled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee to the Trustee, as Security Registrar, for exchange or
cancellation, as provided in this Article Three. If any Global Security is to be
exchanged for other Securities or canceled in part, or if another Security is to
be exchanged in whole or in part for a beneficial interest in any Global
Security, in each case, as provided in Section 305, then either (i) such Global
Security shall be so surrendered for exchange or cancellation, as provided in
this Article Three or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Trustee, as Security
Registrar, whereupon the Trustee, in accordance with the Applicable Procedures,
shall instruct the Depositary or its authorized representative to make a


                                                                              40


corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security, the Trustee shall, subject to Section 305 and as otherwise
provided in this Article Three authenticate and deliver any Securities issuable
in exchange for such Global Security (or any portion thereof) to or upon the
order of, and registered in such names as may be directed by, the Depositary or
its authorized representative. Upon the request of the Trustee in connection
with the occurrence of any of the events specified in the preceding paragraph,
the Company shall promptly make available to the Trustee a reasonable supply of
Securities that are not in the form of Global Securities. The Trustee shall be
entitled to rely upon any order, direction or request of the Depositary or its
authorized representative which is given or made pursuant to this Article Three
if such order, direction or request is given or made in accordance with the
Applicable Procedures.

            (d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article Three or otherwise, shall be
authenticated and delivered in the form of, and shall be, a registered Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof, in which case such
Registered Security shall be authenticated and delivered in definitive, fully
registered form, without interest coupons.

            (e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
Indenture and the Registered Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members and
such owners of beneficial interests in a Global Security will not be considered
the owners or holders thereof.


                                                                              41


                                  ARTICLE FOUR

                    SATISFACTION AND DISCHARGE OF INDENTURE;
                          DEFEASANCE; UNCLAIMED MONEYS

            SECTION 401. APPLICABILITY OF ARTICLE. If, pursuant to Section 301,
provision is made for the defeasance of Securities of a series and if the
Securities of such series are denominated and payable only in Dollars (except as
provided pursuant to Section 301), then the provisions of this Article Four
relating to defeasance of Securities shall be applicable except as otherwise
specified pursuant to Section 301 for Securities of such series. Defeasance
provisions, if any, for Securities denominated in a Foreign Currency may be
specified pursuant to Section 301.

            SECTION 402. SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE.
(a) If at any time (i) the Company shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authenticated and
delivered (other than (1) any Securities of such series which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as provided
in Section 306 and (2) Securities for whose payment money has theretofore been
deposited in trust and thereafter repaid to the Company as provided in Section
405) or (ii) all Securities of such series not theretofore delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit with the
Trustee as trust funds the entire amount in the Currency in which such
Securities are denominated (except as otherwise provided pursuant to Section
301) sufficient (in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee) without consideration of any reinvestment and after payment of all
taxes or other charges and assessments in respect thereof payable by the
Trustee, to pay at maturity or upon redemption all Securities of such series not
theretofore delivered to the Trustee for cancellation, including principal and
premium, if any, and


                                                                              42


interest due or to become due on such date of maturity or redemption date, as
the case may be, no default with respect to the Securities has occurred and is
continuing on the date of such deposit, such deposit does not result in a breach
or violation of, or constitute a default under, the Indenture or any other
agreement or instrument to which the Company is a party and the Company delivers
an Officers' Certificate and an Opinion of Counsel each stating that such
conditions have been complied with and if in either case the Company shall also
pay or cause to be paid all other sums payable hereunder by the Company, then
this Indenture shall cease to be of further effect (except as to any surviving
rights of registration of transfer or exchange of such Securities herein
expressly provided for and rights to receive payments of principal of, and
premium, if any, and interest on, such Securities) with respect to the
Securities of such series, and the Trustee, on demand of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture.

            (b) Subject to Sections 402(c), 403 and 407, the Company at any time
may terminate, with respect to Securities of a particular series, (i) all of the
Company's and the Guarantor's obligations under the Securities of such series
and this Indenture with respect to the Securities of such series ("legal
defeasance option") or (ii) the Company's and the Guarantor's obligations under
any covenants specified pursuant to Section 301 applicable to the Securities of
such series ("covenant defeasance option"). The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant defeasance
option.

            If the Company exercises the legal defeasance option, payment of the
Securities of the defeased series may not be accelerated because of an Event of
Default. If the Company exercises the covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default related to the
specified covenants.

            Upon satisfaction of the conditions set forth herein and upon
request of the Company [or the Guarantor],


                                                                              43


the Trustee shall acknowledge in writing the discharge of those obligations that
the Company terminates.

            (c) Notwithstanding clause (a) above and the exercise of the legal
defeasance option in clause (b) above, the Company's [and the Guarantor's]
obligations in Sections 305, 306, 405, 406, 407, 607, 608, 701 and 1002 shall
survive until the Securities of the defeased series have been paid in full.
Thereafter, the Company's [and the Guarantor's] obligations in Sections 607, 405
and 406 shall survive.

            SECTION 403. CONDITIONS OF DEFEASANCE. The Company may exercise the
legal defeasance option or the covenant defeasance option with respect to
Securities of a particular series only if:

            (1) the Company [or the Guarantor] irrevocably deposits in trust
      with the Trustee money or U.S. Government Obligations for the payment of
      principal of, and premium, if any, and interest on, the Securities of such
      series to maturity or redemption, as the case may be;

            (2) the Company [or the Guarantor] delivers to the Trustee a
      certificate from a nationally recognized firm of independent public
      accountants expressing their opinion that the payments of principal and
      interest when due and without reinvestment on the deposited U.S.
      Government Obligations plus any deposited money without investment will
      provide cash at such times and in such amounts as will be sufficient to
      pay the principal, premium, if any, and interest when due on all the
      Securities of such series to maturity or redemption, as the case may be;

            (3) 91 days pass after the deposit is made and during the 91-day
      period no Default specified in Section 501(5) or (6) with respect to the
      Company occurs which is continuing at the end of the period;

            (4) no Default has occurred and is continuing on the date of such
      deposit and after giving effect thereto;


                                                                              44


            (5) the deposit does not constitute a default under any other
      agreement binding on the Company [or the Guarantor];

            (6) the Company [or the Guarantor] delivers to the Trustee an
      Opinion of Counsel to the effect that the trust resulting from the deposit
      does not constitute, or is qualified as, a regulated investment company
      under the Investment Company Act of 1940;

            (7) in the event of the legal defeasance option, the Company [or the
      Guarantor] shall have delivered to the Trustee an Opinion of Counsel
      stating that (i) the Company has received from the Internal Revenue
      Service a ruling, or (ii) since the date of this Indenture there has been
      a change in the applicable Federal income tax law, in either case to the
      effect that, and based thereon such Opinion of Counsel shall confirm that,
      the Holders of Securities of such series will not recognize income, gain
      or loss for Federal income tax purposes as a result of such defeasance and
      will be subject to Federal income tax on the same amounts, in the same
      manner and at the same times as would have been the case if such
      defeasance had not occurred;

            (8) in the event of the covenant defeasance option, the Company [or
      the Guarantor] shall have delivered to the Trustee an Opinion of Counsel
      to the effect that the Holders of Securities of such series will not
      recognize income, gain or loss for Federal income tax purposes as a result
      of such covenant defeasance and will be subject to Federal income tax on
      the same amounts, in the same manner and at the same times as would have
      been the case if such covenant defeasance had not occurred; and

            (9) the Company [or the Guarantor] delivers to the Trustee an
      Officers' Certificate and an Opinion of Counsel, each stating that all
      conditions precedent to the defeasance and discharge of the Securities of
      such series as contemplated by this Article Four have been complied with.


                                                                              45


            Before or after a deposit, the Company [or the Guarantor] may make
arrangements satisfactory to the Trustee for the redemption of Securities of
such series at a future date in accordance with Article Eleven.

            SECTION 404. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article Four. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Securities of the defeased series.

            SECTION 405. REPAYMENT TO COMPANY [OR GUARANTOR]. The Trustee and
any paying agent shall promptly turn over to the Company [or the Guarantor] upon
request any excess money or securities held by them at any time.

            Subject to any applicable abandoned property law, the Trustee and
any paying agent shall pay to the Company [or the Guarantor] upon request any
money held by them for the payment of principal, premium or interest that
remains unclaimed for two years, and, thereafter, Holders entitled to such money
must look to the Company [or the Guarantor] for payment as general creditors and
all liability of the Trustee or such paying agent with respect to such money
shall thereupon cease.

            SECTION 406. INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The Company
[and the Guarantor (without duplication)] shall pay and shall indemnify the
Trustee and the Holders against any tax, fee or other charge imposed on or
assessed against deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.

            SECTION 407. REINSTATEMENT. If the Trustee or any paying agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article Four by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's [and the Guarantor's]
obligations under this Indenture and the Securities of the defeased series shall
be


                                                                              46


revived and reinstated as though no deposit had occurred pursuant to this
Article Four until such time as the Trustee or any paying agent is permitted to
apply all such money or U.S. Government Obligations in accordance with this
Article Four.

                                  ARTICLE FIVE

                                    REMEDIES

            Section 501. EVENTS OF DEFAULT. "Event of Default", wherever used
herein, means with respect to any series of Securities 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), unless such event is either inapplicable
to a particular series or it is specifically deleted or modified in the
supplemental indenture creating such series of Securities or in the form of
Security for such series:

            (1) default in the payment of any interest upon any Security of that
      series when it becomes due and payable, and continuance of such default
      for a period of 90 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 payment of any sinking or purchase fund or
      analogous obligation when the same becomes due by the terms of the
      Securities of such series; or

            (4) default in the performance, or breach, of any covenant or
      warranty of the Company [or the Guarantor] in this Indenture in respect of
      the Securities of such series (other than a covenant or warranty in
      respect of the Securities of such series a default in the performance of
      which or the breach of which is else where in this Section specifically
      dealt with), all


                                                                              47


      of such covenants and warranties in the Indenture which are not expressly
      stated to be for the benefit of a particular series of Securities being
      deemed in respect of the Securities of all series for this purpose, 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 [and the
      Guarantor] by the Trustee or to the Company [and the Guarantor] and the
      Trustee by the Holders of at least 25% in principal amount of the
      Outstanding Securities of such 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

            (5) with respect to any series of Securities issued or guaranteed
       by the Guarantor, the Guarantor's consolidation or amalgamation with
       or merger into any other Person or conveyance or transfer of its
       properties and assets substantially as an entirety to any Person,
       unless:

                  (A) the Person formed by such consolidation or amalgamation
       or into which the Guarantor is merged or the Person which acquires by
       conveyance or transfer the properties and assets of the Guarantor
       substantially as an entirety shall be a corporation or limited
       liability company organized and existing under the laws of the United
       States of America, any State thereof, the District of Columbia or
       Bermuda, and shall expressly assume, by an indenture supplemental
       hereto, executed by the successor Person and the Company 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 on all the Securities and the performance of every covenant
       of this Indenture on the part of the Guarantor to be performed or
       observed;

                  (B) 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

                  (C) either the Guarantor or the successor Person has
       delivered to the Trustee an Officers' Certificate and an Opinion of
       Counsel each stating that such consolidation, amalgamation, merger,
       conveyance or transfer and such supplemental indenture comply with
       this Article and that all conditions precedent herein provided for
       relating to such transaction have been complied with,

and continuance of any failure to comply with the conditions set forth under
items (A), (B) or (C) of this paragraph (5) for a period of 90 days after there
has been given, by registered or certified mail, to the Guarantor by the Trustee
or to the Guarantor and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of such series, a written notice specifying
such failure to comply and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or


            (6) the entry of an order for relief against the Company [or the
      Guarantor] under the Federal Bankruptcy Code by a court having
      jurisdiction in the premises or a decree or order by a court having
      jurisdiction in the premises adjudging the Company [or the Guarantor] a
      bankrupt or insolvent under any other applicable Federal, State or Foreign
      law, or the entry of a decree or order approving as properly filed a
      petition seeking reorganization, arrangement, adjustment or composition of
      or in respect of the Company [or the Guarantor] under the Federal
      Bankruptcy Code or any other applicable Federal, State or Foreign law
      (other than a reorganization under a foreign law that does not relate to
      insolvency), or appointing a receiver, liquidator, assignee, trustee,
      sequestrator (or other similar official) of the Company [or the Guarantor]
      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

            (7) the consent by the Company [or the Guarantor] 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 the
      Federal Bankruptcy Code or any other applicable Federal, State or Foreign
      law (other than a reorganization under a foreign law that does not relate


                                                                              48


      to insolvency) 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 the
      Guarantor] 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, or
      the taking of corporate action by the Company [or the Guarantor] in
      furtherance of any such action; or

            (8) any other Event of Default provided in the supplemental
      indenture under which such series of Securities is issued or in the form
      of Security for such series.

            Section 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default described in paragraph (1), (2), (3), (4), (5) or (8)
(if the Event of Default under paragraph (4), (5) or (8) is with respect to
less than all series of Securities then Outstanding) of Section 501 occurs
and is continuing with respect to any series, then and in each and every such
case, unless the principal of all the Securities of such series shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Securities of such series then
Outstanding hereunder (each such series acting as a separate class), by
notice in writing to the Company [and the Guarantor] (and to the Trustee if
given by Holders), may declare the principal amount (or, if the Securities of
such 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 such series then Outstanding and all accrued interest thereon
to be due and payable immediately, and upon any such declaration the same
shall become and shall be immediately due and payable, anything in this
Indenture or in the Securities of such series contained to the contrary
notwithstanding. If an Event of Default described in paragraph (4), (5) or
(8) (if the Event of Default under paragraph (4), (5) or (8) is with respect
to all series of Securities then Outstanding), or (6) or (7) of Section 501
occurs and is continuing, then and in each and every such case, unless the
principal of all the Securities shall have


                                                                              49


already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of all the Securities then Outstanding
hereunder (treated as one class), by notice in writing to the Company [and the
Guarantor] (and to the Trustee if given by Holders), may de clare the principal
amount (or, if any Securities are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms thereof) of all
the Securities then Outstanding and all accrued interest thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the
Securities contained to the contrary notwithstanding.

            At any time after such a declaration of accel eration has been made
with respect to the Securities of any series 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 such series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if

            (1) the Company [or the Guarantor] has paid or deposited with the
      Trustee a sum sufficient to pay

                  (A) all overdue installments of interest on the Securities of
            such series,

                  (B) the principal of (and premium, if any, on) any Securities
            of such series which have become due otherwise than by such
            declaration of acceleration, and interest thereon at the rate or
            rates prescribed therefor by the terms of the Securities of such
            series, to the extent that payment of such interest is lawful,

                  (C) interest upon overdue installments of interest at the rate
            or rates prescribed therefor by the terms of the Securities of such
            series to the extent that payment of such interest is


                                                                              50


            lawful, 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 all other amounts due the
            Trustee under Section 607; and

            (2) all Events of Default with respect to such series of Securities,
      other than the nonpayment of the principal of the Securities of such
      series which have 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.

            Section 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Company [and the Guarantor each] covenants that if

            (1) default is made in the payment of any installment of interest on
      any Security of any series when such interest becomes due and payable, or

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

            (3) default is made in the payment of any sinking or purchase fund
      or analogous obligation when the same becomes due by the terms of the
      Securities of any series,

and any such default continues for any period of grace provided with respect to
the Securities of such series, the Company [or the Guarantor, as the case may
be,] will, upon demand of the Trustee, pay to it, for the benefit of the Holder
of any such Security (or the Holders of any such series in the case of Clause
(3) above), the whole amount then due and payable on any such Security (or on
the Securities of any such series in the case of Clause (3) above) for principal
(and premium, if any) and interest, with interest, to the extent that payment of
such interest shall be legally enforceable, upon the overdue principal


                                                                              51


(and premium, if any) and upon overdue installments of interest, at such rate or
rates as may be prescribed therefor by the terms of any such Security (or of
Securities of any such series in the case of Clause (3) above); and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and all other
amounts due the Trustee under Section 607.

            If the Company [or the Guarantor] 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 the Guarantor] or any
other obligor upon the Securities of such series and collect the money adjudged
or decreed to be payable in the manner provided by law out of the property of
the Company [or the Guarantor] or any other obligor upon such Securities,
wherever situated.

            If an Event of Default with respect to any series of Securities
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 [, Guarantor] or any other obligor upon the
Securities or the property of the Company [, Guarantor] or of such other obligor
or their creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of


                                                                              52


whether the Trustee shall have made any demand on the Company [or the Guarantor]
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceedings or otherwise,

            (i) to file and prove a claim for the whole amount of principal (and
      premium, if any) and interest owing and unpaid in respect of the
      Securities and to file such other papers or documents as may be necessary
      and advisable in order to have the claims of the Trustee (including any
      claim for the reasonable compensation, expenses, disbursements and
      advances of the Trustee, its agents and counsel and all other amounts due
      the Trustee under Section 607) and of the Securityholders allowed in such
      judicial proceeding, and

            (ii) to collect and receive any moneys or other property payable or
      deliverable on any such claims and to distribute the same;

and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee 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 Securityholder any
plan or 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 Securityholder in any such proceeding.

            Section 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES. All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities of such series or the production thereof
in any proceeding relating thereto, and


                                                                              53


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 reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, be for the
ratable benefit of the Holders of the Securities of the series in respect of
which such judgment has been recovered.

            Section 506. APPLICATION OF MONEY COLLECTED. Any money collected 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 on account of principal
(or premium, if any) or interest, upon presentation of the Securities of such
series and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:

            FIRST: To the payment of all amounts due the Trustee under Section
607.

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

            THIRD: To the Company [or the Guarantor or both, as they are
entitled].

            Section 507. LIMITATION ON SUITS. No Holder of any Security 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


                                                                              54


      with respect to Securities of such series;

            (2) the Holders of not less than 25% in principal amount of the
      Outstanding Securities of such 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 such series;

it being understood and intended that no one or more Holders of Securities of
such series 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 of such series, or to obtain or to
seek to obtain priority or preference over any other such Holders or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal and proportionate benefit of all the Holders of all Securities of such
series.

            Section 508. UNCONDITIONAL RIGHT OF SECURITY HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST. Not withstanding any other provisions 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 or
repayment, on the Redemption Date or Repayment Date, as the case may be) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.


                                                                              55


            Section 509. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or
any Securityholder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, then and in every such case the Company, [the Guarantor,] the
Trustee and the Securityholders 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
Securityholders shall continue as though no such proceeding had been instituted.

            Section 510. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon or reserved to the Trustee or to the Securityholders 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 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
Securityholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Securityholders, as the case may be.

            Section 512. CONTROL BY SECURITYHOLDERS. 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


                                                                              56


Securities of such series, provided that

            (1) the Trustee shall have the right to decline to follow any such
      direction if the Trustee, being advised by counsel, determines that the
      action so directed may not lawfully be taken or would conflict with this
      Indenture or if the Trustee in good faith shall, by a Responsible Officer,
      determine that the proceedings so directed would involve it in personal
      liability or be unjustly prejudicial to the Holders not taking part in
      such direction, 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 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 not theretofore cured

            (1) in the payment of the principal of (or premium, if any) or
      interest on any Security of such series, or in the payment of any sinking
      or purchase fund or analogous obligation with respect to the Securities 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.

            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


                                                                              57


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 Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount of
the Outstanding Securities of any series to which the suit relates, or to any
suit instituted by any Securityholder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repayment, on or after the Redemption Date or Repayment Date).

            Section 515. WAIVER OF STAY OR EXTENSION LAWS. The Company [and the
Guarantor each] 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 force, which may affect the covenants or the
performance of this Indenture; and the Company [and the Guarantor each] (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 with respect to any series of Securities,


                                                                              58


            (1) the Trustee undertakes to perform such duties and only such
      duties as are specifically set forth in this Indenture with respect to the
      Securities of such series, 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, with
      respect to Securities of such series, 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.

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

            (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;

            (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 the Holders of a majority in principal amount of the


                                                                              59


      Outstanding Securities of any series 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

            (4) no provision of this Indenture shall require the Trustee to
      expend or risk its own funds or otherwise incur any financial liability in
      the per formance 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. Within 90 days after the occurrence
of any default hereunder with respect to Securities of any series, the Trustee
shall transmit by mail to all Securityholders of such series, as their names and
addresses appear in the Security 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 on any Security of such series or
in the payment of any sinking or purchase fund installment or analogous
obligation with respect to Securities 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 determine that the withholding of such
notice is in the interests of the Securityholders of such series; and PROVIDED,
FURTHER, that in the case of any default of the character specified in Section
501(4) or (5) with respect to Securities of such series no such notice to
Securityholders of such series shall be given until at least


                                                                              60


90 days after the occurrence thereof. For the purpose of this Section, the term
"default", with respect to Securities of any series, 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. Except as otherwise provided
in 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 or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;

            (b) any request or direction of the Company [or the Guarantor]
mentioned herein shall be sufficiently evidenced by a Company Request or Company
Order[, or a Guarantor Request or Guarantor Order, as applicable,] and any
resolution of the Board of Directors [or the Guarantor Board of Directors] may
be sufficiently evidenced by a Board Resolution [or a Guarantor's Board
Resolution, as applicable];

            (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 of its selection and the
written 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


                                                                              61


Indenture at the request or direction of any of the Securityholders pursuant to
this Indenture, unless such Securityholders 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,
debenture or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investi gation 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; 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 certificates of
authen tication, shall be taken as the statements of the Company [or the
Guarantor, as applicable], 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 [or the Guarantor] of
Securities or the proceeds thereof.

            Section 605. MAY HOLD SECURITIES. The Trustee, any Paying Agent, the
Security Registrar or any other agent of the Company [or the Guarantor], 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 [or
the Guarantor] with the same rights it would have if it were not Trustee, Paying


                                                                              62


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 otherwise agreed with the Company [or the
Guarantor].

            Section 607. COMPENSATION AND REIMBURSEMENT. The Company [and the
Guarantor (without duplication)] agrees

            (1) to pay to the Trustee from time to time as the parties shall
      agree from time to time such 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 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 for, and to hold it harmless against,
      any loss, liability 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, 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.

            As security for the performance of the obligations of the Company
[and the Guarantor] under this Section the Trustee shall have a lien prior to
the Securities upon all property and funds held or collected by the Trustee as
such,


                                                                              63


except funds held in trust for the payment of principal of (and premium, if any)
or interest on particular Securities.

            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 during the period of
time provided for therein. In determining whether the Trustee has a conflicting
interest as defined in Section 310(b) of the Trust Indenture Act with respect to
the Securities of any series, there shall be excluded for purposes of the
conflicting interest provisions of such Section 310(b) the Securities of every
other series issued under this Indenture (i) and every series of securities
issued under any other indentures if the requirements for such exclusion set
forth in Section 310(b) of the Trust Indenture Act are met. 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 with respect to each series of Securities,
which shall be a corporation organized and doing business under the laws of the
United States of America or of any State, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, and 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 purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee with respect to any series of 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.

            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


                                                                              64


Article shall become effective until the acceptance of appointment by the
successor Trustee under Section 611.

            (b) The Trustee may resign with respect to any series of Securities
at any time by giving written notice thereof to the Company [and the Guarantor].
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
removal, the removed Trustee may petition any court of competent jurisdiction
for the appointment of a successor Trustee.

            (c) The Trustee may be removed with respect to any series of
Securities at any time by Act of the Holders of a majority in principal amount
of the Outstanding Securities of that series, delivered to the Trustee and to
the Company [and the Guarantor]. 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 removal, the removed Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

            (d) If at any time:

            (1) the Trustee shall fail to comply with Section 310(b) of the
      Trust Indenture Act pursuant to Section 608(a) with respect to any series
      of Securities after written request therefor by the Company [, by the
      Guarantor] or by any Securityholder who has been a bona fide Holder of a
      Security of that series for at least 6 months, or

            (2) the Trustee shall cease to be eligible under Section 609 with
      respect to any series of Securities and shall fail to resign after written
      request therefor by the Company [, by the Guarantor] or by any such Se
      curityholder, or

            (3) the Trustee shall become incapable of acting with respect to any
      series of Securities, or


                                                                              65


            (4) the Trustee 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 a Board Reso lution [, or the
Guarantor by a Guarantor's Board Resolution,] may remove the Trustee, with
respect to the se ries, or in the case of Clause (4), with respect to all
series, or (ii) subject to Section 514, any Securityholder who has been a bona
fide Holder of a Security of such series for at least 6 months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee with respect to the series, or, in the case of Clause (4), with respect
to all series.

            (e) If the Trustee shall resign, be removed or become incapable of
acting with respect to any series of Securities, or if a vacancy shall occur in
the office of the Trustee with respect to any series of Securities for any
cause, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee for that series of Securities. If, within one year after such
resignation, removal or incapacity, or the occurrence of such vacancy, a
successor Trustee with respect to such series of Securities 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 [, the Guarantor] and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to
such series and supersede the successor Trustee appointed by the Company with
respect to such series. If no successor Trustee with respect to such series
shall have been so appointed by the Company or the Securityholders of such
series and accepted appointment in the manner hereinafter provided, any
Securityholder who has been a bona fide Holder of a Security of that series for
at least 6 months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to such series.


                                                                              66


            (f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to any series and each appointment of a
successor Trustee with respect to any series by mailing written notice of such
event by first-class mail, postage prepaid, to the Holders of Securities of that
series as their names and addresses appear in the Security Register. Each notice
shall include the name of the successor Trustee and the address of its principal
Corporate Trust Office.

            Section 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company [, the Guarantor] and to the predecessor Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the predecessor
Trustee shall become effective with respect to any series as to which it is
resigning or being removed as Trustee, and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the predecessor Trustee with respect to any such
series; but, on request of the Company [, the Guarantor] or the successor
Trustee, such predecessor Trustee shall, upon payment of its reasonable charges,
if any, execute and deliver an instrument transferring to such successor Trustee
all the rights, powers and trusts of the predecessor Trustee, and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such predecessor Trustee hereunder with respect to all or any such
series, subject nevertheless to its lien, if any, provided for in Section 607.
Upon request of any such successor Trustee, the Company [and the Guarantor]
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.

            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 Guarantor] the predecessor Trustee and each successor Trustee with respect
to the Securities of any applicable series shall


                                                                              67


execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor Trustee with respect to the
Securities of any series as to which the predecessor Trustee is not being
succeeded shall continue to be vested in the predecessor Trustee, and shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the 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.

            No successor Trustee with respect to any series of Securities shall
accept its appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible with respect to that series 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 authenticat ing 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. (a)
Subject to Subsection (b) of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company
within 3 months prior to a default, as defined in


                                                                              68


Subsection (c) of this Section, or subsequent to such a default, then, unless
and until such default shall be cured, the Trustee shall set apart and hold in a
special account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities (as defined in
Subsection (c) of this Section):

            (1) an amount equal to any and all reductions in the amount due and
      owing upon any claim as such creditor in respect of principal or interest,
      effected after the beginning of such 3-month period and valid as against
      the Company and its other creditors, except any such reduction resulting
      from the receipt or disposition of any property described in paragraph (2)
      of this Subsection, or from the exercise of any right of set-off which the
      Trustee could have exercised if a petition in bankruptcy had been filed by
      or against the Company upon the date of such default; and

            (2) all property received by the Trustee in respect of any claim as
      such creditor, either as security therefor, or in satisfaction or
      composition thereof, or otherwise, after the beginning of such 3-month
      period, or an amount equal to the proceeds of any such property, if
      disposed of, subject, however, to the rights, if any, of the Company and
      its other creditors in such property or such proceeds.

Nothing herein contained, however, shall affect the right of the Trustee

                  (A) to retain for its own account (i) payments made on account
            of any such claim by any Person (other than the Company) who is
            liable thereon, and (ii) the proceeds of the bona fide sale of any
            such claim by the Trustee to a third person, and (iii) distributions
            made in cash, securities or other property in respect of claims
            filed against the Company in bankruptcy or receivership or in
            proceedings for reorganization pursuant to the Federal Bankruptcy
            Act or applicable State law;


                                                                              69


                  (B) to realize, for its own account, upon any property held by
            it as security for any such claim, if such property was so held
            prior to the beginning of such 3-month period;

                  (C) to realize, for its own account, but only to the extent of
            the claim hereinafter mentioned, upon any property held by it as
            security for any such claim, if such claim was created after the
            beginning of such 3-month period and such property was received as
            security therefor simultaneously with the creation thereof, and if
            the Trustee shall sustain the burden of proving that at the time
            such property was so received the Trustee had no reasonable cause to
            believe that a default as defined in Subsection (c) of this Section
            would occur within 3 months; or

                  (D) to receive payment on any claim referred to in paragraph
            (B) or (C), against the release of any property held as security for
            such claim as provided in paragraph (B) or (C), as the case may be,
            to the extent of the fair value of such property.

            For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such 3-month period for property held as
security at the time of such substitution shall, to the extent of the fair value
of the property released, have the same status as the property released, and, to
the extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.

            If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, the Securityholders and the holders
of other indenture secu rities realize, as a result of payments from such
special account and payments of dividends on claims filed


                                                                              70


against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State law,
the same percentage of their respective claims, figured before crediting to the
claim of the Trustee anything on account of the receipt by it from the Company
of the funds and property in such special account and before crediting to the
respective claims of the Trustee and the Securityholders and the holders of
other indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, but after crediting thereon
receipts on account of the indebtedness represented by their respective claims
from all sources other than from such dividends and from the funds and property
so held in such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect to such
claim, in bankruptcy or receivership or proceedings for reorganization pursuant
to the Federal Bankruptcy Act or applicable State law, whether such distribution
is made in cash, securities, or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceedings for reorganization
is pending shall have jurisdiction (i) to apportion between the Trustee and the
Securityholders and the holders of other indenture securities in accordance with
the provisions of this paragraph, the funds and property held in such special
account and proceeds thereof, or (ii) in lieu of such apportionment, in whole or
in part, to give to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the Trustee and the
Securityholders and the holders of other indenture securities with respect to
their respective claims, in which event it shall not be necessary to liquidate
or to appraise the value of any securities or other property held in such
special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.

            Any Trustee which has resigned or been removed after the beginning
of such 3-month period shall be subject to the provisions of this Subsection as
though such


                                                                              71


resignation or removal had not occurred. If any Trustee has resigned or been
removed prior to the beginning of such 3-month period, it shall be subject to
the provisions of this Subsection if and only if the following conditions exist:

                  (i) the receipt of property or reduction of claim, which would
            have given rise to the obligation to account, if such Trustee had
            continued as Trustee, occurred after the beginning of such 3-month
            period; and

                  (ii) such receipt of property or reduction of claim occurred
            within 3 months after such resignation or removal.

            (b) There shall be excluded from the operation of Subsection (a) of
this Section a creditor relationship arising from

            (1) the ownership or acquisition of securities issued under any
      indenture, or any security or secu rities having a maturity of one year or
      more at the time of acquisition by the Trustee;

            (2) advances authorized by a receivership or bankruptcy court of
      competent jurisdiction, or by this Indenture, for the purpose of
      preserving any property which shall at any time be subject to the lien of
      this Indenture or of discharging tax liens or other prior liens or
      encumbrances thereon, if notice of such advances and of the circumstances
      surrounding the making thereof is given to the Securityholders at the time
      and in the manner provided in this Indenture;

            (3) disbursements made in the ordinary course of business in the
      capacity of trustee under an indenture, transfer agent, registrar,
      custodian, paying agent, fiscal agent or depositary, or other similar
      capacity;

            (4) an indebtedness created as a result of services rendered or
      premises rented; or an indebt edness created as a result of goods or
      securities sold in a cash transaction as defined in Subsection (c) of this
      Section;


                                                                              72


            (5) the ownership of stock or of other securities of a corporation
      organized under the provisions of Section 25(a) of the Federal Reserve
      Act, as amended, which is directly or indirectly a creditor of the
      Company; or

            (6) the acquisition, ownership, acceptance or negotiation of any
      drafts, bills of exchange, accep tances or obligations which fall within
      the classi fication of self liquidating paper as defined in Subsection (c)
      of this Section.

            (c) For the purposes of this Section only:

            (1) The term "default" means any failure to make payment in full of
      the principal of or interest on any of the Securities or upon the other
      indenture securities when and as such principal or interest becomes due
      and payable.

            (2) The term "other indenture securities" means securities upon
      which the Company is an obligor outstanding under any other indenture (i)
      under which the Trustee is also trustee, (ii) which contains provisions
      substantially similar to the provisions of this Section, and (iii) under
      which a default exists at the time of the apportionment of the funds and
      property held in such special account.

            (3) The term "cash transaction" means any transaction in which full
      payment for goods or secu rities sold is made within 7 days after delivery
      of the goods or securities in currency or in checks or other orders drawn
      upon banks or bankers and payable upon demand.

            (4) The term "self-liquidating paper" means any draft, bill of
      exchange, acceptance or obligation which is made, drawn, negotiated or
      incurred by the Company for the purpose of financing the purchase,
      processing, manufacturing, shipment, storage or sale of goods, wares or
      merchandise and which is secured by documents


                                                                              73


      evidencing title to, possession of, or a lien upon, the goods, wares or
      merchandise or the receivables or proceeds arising from the sale of the
      goods, wares or merchandise previously constituting the security, provided
      the security is received by the Trustee simultaneously with the creation
      of the creditor relationship with the Company arising from the making,
      drawing, negotiating or incurring of the draft, bill of exchange,
      acceptance or obligation.

            (5) The term "Company" means any obligor upon the Securities.

            Section 614. APPOINTMENT OF AUTHENTICATING AGENT. At any time when
any of the Securities remain Outstanding the Trustee, with the approval of the
Company, 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 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 thereof or the
District of Columbia, authorized under such laws to act as an Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and,
if other than the Company itself, 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,


                                                                              74


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 the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, 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, if other than the Company, 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, if other than
the Company, 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,
with the approval of the Company, may appoint a successor Authenticating Agent
which shall be acceptable to the Company and shall mail written notice of such
appointment by first-class mail, postage prepaid, to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve, as
their names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder 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.


                                                                              75


            The Trustee agrees to pay to each Authenticating Agent (other than
an Authenticating Agent appointed at the request of the Company 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
alternate certificate of authentication in the following form:

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

                                        [           ],
                                        as Trustee


                                        By:_____________________________________
                                           As Authenticating Agent


Dated:_______________                   By:_____________________________________
                                                            Authorized Signatory

                                  ARTICLE SEVEN

                      SECURITYHOLDERS' LISTS AND REPORTS BY
                        TRUSTEE [, GUARANTOR] AND COMPANY

            Section 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS. The Company will furnish or cause to be furnished to the
Trustee

            (a) semi-annually, not more than 30 days after each Regular Record
      Date, in each year in such form as the Trustee may reasonably require, a
      list of the names


                                                                              76


      and addresses of the Holders of Securities of such series as of such date,
      and

            (b) at such other times as the Trustee may request in writing,
      within 30 days after the receipt by the Company of any such request, a
      list of similar form and content as of a date not more than 30 days prior
      to the time such list is furnished,

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

            Section 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
SECURITYHOLDERS. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders of Securities 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.

            (b) If 3 or more Holders of Securities of any series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security of such
series for a period of at least 6 months preceding the date of such application,
and such application states that the applicants desire to communicate with other
Holders of Securities of such series or with the Holders of all Securities with
respect to their rights under this Indenture or under such Securities and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within 5 Business Days
after the receipt of such application, at its election, either

            (i) afford such applicants access to the information preserved at
      the time by the Trustee in accordance with Section 702(a), or

            (ii) inform such applicants as to the approximate number of Holders
      of Securities of such series or all Securities, as the case may be, whose
      names and


                                                                              77


      addresses appear in the information preserved at the time by the Trustee
      in accordance with Section 702(a), and as to the approximate cost of
      mailing to such Securityholders the form of proxy or other communication,
      if any, specified in such application.

            If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of a Security of such series or to all Security
holders, as the case may be, whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section 702(a), a copy
of the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless, within 5 days after such tender, the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests of the Holders
of Securities of such series or all Securityholders, as the case may be, or
would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all Securityholders of such series or all
Securityholders, as the case may be, with reasonable promptness after the entry
of such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.

            (c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee


                                                                              78


that neither the Company nor the Trustee shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders of Securities in accordance with Section 702(b), regardless of the
source from which such information was derived, and that the Trustee shall not
be held accountable by reason of mailing any material pursuant to a request made
under Section 702(b).

            Section 703. REPORTS BY TRUSTEE. (a) The term "reporting date" as
used in this Section means [      ] of each year. Within 60 days after the
reporting date in each year, beginning in 200 , the Trustee shall transmit by
mail to all Securityholders, as their names and addresses appear in the Security
Register, a brief report dated as of such reporting date with respect to any of
the following events which may have occurred during the 12 months preceding the
date of such report (but if no such event has occurred within such period no
report need be transmitted):

            (1) any change to its eligibility under Section 609 and its
      qualifications under Section 608;

            (2) the creation of or any material change to a relationship
      specified in Section 310(b)(1) through Section 310(b)(10) of the Trust
      Indenture Act;

            (3) the character and amount of any advances (and if the Trustee
      elects so to state, the circumstances surrounding the making thereof) made
      by the Trustee (as such) which remain unpaid on the date of such report,
      and for the reimbursement of which it claims or may claim a lien or
      charge, prior to that of Securities of any series, on any property or
      funds held or collected by it as Trustee, except that the Trustee shall
      not be required (but may elect) to report such advances if such advances
      so remaining unpaid aggregate not more than [1%] of the principal amount
      of the Securities of such series outstanding on the date of such report;

            (4) any change to the amount, interest rate and maturity date of all
      other indebtedness owing by the Company (or by any other obligor on the
      Securities) to the Trustee in its individual capacity, on the date of such
      report, with a brief description of any property


                                                                              79


      held as collateral security therefor, except an indebtedness based upon a
      creditor relationship arising in a manner described in Section 613(b)(2),
      (3), (4) or (6);

            (5) any change to the property and funds, if any, physically in the
      possession of the Trustee as such on the date of such report;

            (6) any additional issue of Securities which the Trustee has not
      previously reported; and

            (7) any action taken by the Trustee in the performance of its duties
      hereunder which it has not previously reported and which in its opinion
      materially affects the Securities, except action in respect of a default,
      notice of which has been or is to be withheld by the Trustee in accordance
      with Section 602.

            (b) The Trustee shall transmit by mail to all Securityholders, as
their names and addresses appear in the Security Register, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
Subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Securities of any series, on property or funds held or collected by it as
Trustee, and which it has not previously reported pursuant to this Subsection,
except that the Trustee shall not be required (but may elect) to report such
advances if such advances remaining unpaid at any time aggregate [ ]% or less of
the principal amount of the Securities Outstanding of such series at such time,
such report to be transmitted within 90 days after such time.

            (c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange upon which the Securities


                                                                              80


are listed, and also with the Commission. The Company will notify the Trustee
when the Securities are listed on any stock exchange.

            Section 704. REPORTS BY COMPANY [AND GUARANTOR]. The Company [and
the Guarantor each] will

            (1) file with the Trustee, within 30 days after the Company [or the
      Guarantor] 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 [or the
      Guarantor] may be required to file with the Commission pursuant to Section
      13 or Section 15(d) of the Securities Exchange Act of 1934; or, if
      [neither] the Company [nor the Guarantor] is [not] required to file
      information, documents or reports pursuant to either of said Sections,
      then [it] [the Guarantor] will 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
      Securities Exchange Act of 1934 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 [or the Guarantor] 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 Securityholders, as their names and
      addresses appear in the Security Register, within [30] days after the
      filing thereof


                                                                              81


      with the Trustee, such summaries of any information, documents and reports
      required to be filed by the Company [or the Guarantor] pursuant to
      paragraphs (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, AMALGAMATION, MERGER, CONVEYANCE OR TRANSFER

            Section 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate or amalgamate with or merge into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:

            (1) the Person formed by such consolidation or amalgamation or into
      which the Company is merged or the Person which acquires by conveyance or
      transfer the properties and assets of the Company substantially as an
      entirety shall be a corporation or limited liability company organized and
      existing under the laws of the United States of America, any State
      thereof, the District of Columbia or Bermuda, and shall expressly assume,
      by an indenture supplemental hereto, executed by the successor Person [and
      the Guarantor] 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 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; and

            (3) the Company has delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel each stating that such
      consolidation, merger, conveyance or transfer and such supplemental
      indenture comply with


                                                                              82


      this Article and that all conditions precedent herein provided for
      relating to such transaction have been complied with.

            Section 802. SUCCESSOR PERSON SUBSTITUTED FOR COMPANY. Upon any
consolidation, amalgamation or merger, or any conveyance or transfer of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolida tion or into
which the Company is merged or to which such conveyance or transfer 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. In the event of any such
conveyance or transfer, the Company as the predecessor corporation may be
dissolved, wound up or liquidated at any time thereafter.



                                                                              83


            [Section 803. Successor Person Substituted for Guarantor. Upon any
consolidation, amalgamation or merger, or any conveyance or transfer of the
properties and assets of the Guarantor substantially as an entirety, whether
or not such event gives rise to an Event of Default under Section 501(5), the
successor Person formed by such consolidation or amalgamation or into which
the Guarantor is merged or to which such conveyance or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power
of, the Guarantor under this Indenture with the same effect as if such
successor Person had been named as the Guarantor herein. In the event of any
such conveyance or transfer, the Guarantor as the predecessor corporation may
be dissolved, wound up or liquidated at any time thereafter.]

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

            Section 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITYHOLDERS. Without the consent of the Holders of any Securities, the
Company, when authorized by a Board Resolution, [the Guarantor, when authorized
by a Guarantor's Board Resolution,] and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

            (1) to evidence the succession of another Person to the Company, [or
      the Guarantor] and the assumption by any such successor of the covenants
      of the Company [or the Guarantor] herein and in the Securities


                                                                              84


      contained; or

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

            (3) to cure any ambiguity, to correct or supplement any provision
      herein 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; or

            (4) to add to this Indenture such provisions as may be expressly
      permitted by the TIA, excluding, however, the provisions referred to in
      Section 316(a)(2) of the TIA as in effect at the date as of which this
      instrument was executed or any corre sponding provision in any similar
      federal statute hereafter enacted; or

            (5) to establish any form of Security, as provided in Article Two,
      and to provide for the issuance of any series of Securities as provided in
      Article Three and to set forth the terms thereof, and/or to add to the
      rights of the Holders of the Securities of any series; or

            (6) to evidence and provide for the acceptance of appointment by
      another corporation as a successor Trustee hereunder with respect to one
      or more series of Securities and to add to or change any of the provisions
      of this Indenture as shall be necessary to provide for or facilitate the
      administration of the trusts hereunder by more than one Trustee, pursuant
      to Section 611; or


                                                                              85


            (7) to add any additional Events of Default in respect of the
      Securities of any or all series (and if such additional Events of Default
      are to be in respect of less than all series of Securities, stating that
      such Events of Default are expressly being included solely for the benefit
      of one or more specified series); or

            (8) to provide for the issuance of Securities in coupon as well as
      fully registered form.

            No supplemental indenture for the purposes identified in Clauses
(2), (3), (5) or (7) above may be entered into if to do so would adversely
affect the interest of the Holders of Securities of any series.

            Section 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF
SECURITYHOLDERS. 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 or indentures, by Act of said Holders delivered to the
Company [, the Guarantor] and the Trustee, the Company, when authorized by a
Board Resolution [the Guarantor, when authorized by a Guarantor's Board
Resolution], and the Trustee may enter into an indenture or indentures supple
mental 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 the Securities of each such series under
this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected thereby,

            (1) change the Maturity of the principal of, or the Stated Maturity
      of any premium on, or any installment of interest on, any Security, or
      reduce the principal amount thereof or the interest or any premium
      thereon, or change the method of computing the amount of principal thereof
      or interest thereon on any date or change any Place of Payment where, or
      the coin or currency in which, any Security or any premium or interest
      thereon is payable, or impair the right to institute suit for the
      enforcement of any such payment on or after the Maturity or the Stated
      Maturity, as the


                                                                              86


      case may be, thereof (or, in the case of redemption or repayment, on or
      after the Redemption Date or the Repayment Date, as the case may be); 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 or Section 513,
      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.

            A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, 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 Securityholders 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 Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may,


                                                                              87


but shall not (except to the extent required in the case of a supplemental
indenture entered into under Section 901(4) or 901(6)) be obligated to, enter
into any such supplemental indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.

            Section 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 to the extent provided therein.

            Section 905. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the TIA 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
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.

                                   ARTICLE TEN

                                    COVENANTS

            Section 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. With
respect to each series of Securities, the Company will duly and punctually pay
the principal of (and premium, if any) and interest on such Securities in
accordance with their terms and this Indenture, and will duly comply with all
the other terms, agreements and conditions contained in, or made in the
Indenture for the


                                                                              88


benefit of, the Securities of such series.

            Section 1002. MAINTENANCE OF OFFICE OR AGENCY. The Company will
maintain an office or agency in each Place of Payment where Securities may be
presented or surrendered for payment, 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 will
give prompt written notice to the Trustee of the location, and of any change in
the location, of such office or agency. If at any time the Company shall fail to
maintain such 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 principal Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee its agent to receive all such presentations,
surrenders, notices and demands.

            [The Guarantor will maintain an office or agency in each Place of
Payment where Securities to which the Guarantee applies may be presented or
surrendered for payment pursuant to the Guarantee and where notices and demands
to or upon the Guarantor in respect of the Guarantee and this Indenture may be
served. The Guarantor will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Guarantor shall fail to maintain any such office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders and demands may be made or served at the Principal Corporate Trust
Office of the Trustee, and the Guarantor hereby appoints the Trustee as its
agent to receive all such presentations, surrenders and demands.]

            Section 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST. If
the Company shall at any time act as its own Paying Agent for 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


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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 action or failure to act.

            Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
(and premium, if any) or interest on, any Securities of such series, 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 action or failure so to act.

            The Company will cause each Paying Agent other than the Trustee for
any series of Securities 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 principal of (and
      premium, if any) or interest on Securities of such series 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 of such series) in the making of any
      such payment of principal (and premium, if any) or interest on the
      Securities of such series; 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 [or the Guarantor] may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture with respect to any
series of Securities or for any other purpose, pay, or by Company Order [or the


                                       90


Guarantor Order] direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company [, the Guarantor] or such Paying Agent in respect of each
and every series of Securities as to which it seeks to discharge this Indenture
or, if for any other purpose, all sums so held in trust by the Company [or the
Guarantor] in respect of all Securities, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company [,
the Guarantor] or such Paying Agent; and, upon such payment by 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 [or the Guarantor], in trust for the payment of the
principal of (and premium, if any) or interest on any Security of any series and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall be paid to the Company on Company
Request [(or, if deposited by the Guarantor, paid to the Guarantor upon
Guarantor Request)], or (if then held by the Company [or the Guarantor]) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company [and the Guarantor]
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. The Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company [and the
Guarantor] mail to the Holders of the Securities as to which the money to be
repaid was held in trust, as their names and addresses appear in the Security
Register, a notice that such moneys remain unclaimed and that, after a date
specified in the notice, which shall not be less than [30] days from the date on
which the notice was first mailed to the Holders of the Securities as to which
the money to be repaid was held in trust, any unclaimed balance of such moneys
then remaining will be paid to the Company [or the Guarantor, as the case may
be,] free of the trust formerly impressed upon it.


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            The Company initially authorizes the Trustee to act as Paying Agent
for the Securities on its behalf. The Company may at any time and from time to
time authorize one or more Persons to act as Paying Agent in addition to or in
place of the Trustee with respect to any series of Securities issued under this
Indenture.

            Section 1004. STATEMENT AS TO COMPLIANCE. The Company [and the
Guarantor each] will deliver to the Trustee, within [120] days after the end of
each fiscal year, a written statement signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company [or
the Guarantor, as the case may be], stating that

            (1) a review of the activities of the Company [or the Guarantor, as
      the case may be,] during such year and of its performance under this
      Indenture and under the terms of the Securities has been made under his
      supervision; and

            (2) to the best of his knowledge, based on such review, the Company
      [or the Guarantor, as the case may be,] has complied with all conditions
      and covenants under this Indenture through such year, or, if there has
      been a default in the fulfillment of any such obligation, specifying each
      such default known to him and the nature and status thereof.

            For purposes of this Section 1004, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant to
the terms of this Indenture.

            Section 1005. CORPORATE EXISTENCE. Subject to Article Eight [each
of] the Company [and the Guarantor] will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

            Section 1101. APPLICABILITY OF ARTICLE. The


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Company may reserve the right to redeem and pay before Stated Maturity all or
any part of the Securities of any series, either by optional redemption, sinking
or purchase fund or analogous obligation or otherwise, by provision therefor in
the form of Security for such series established and approved pursuant to
Section 202 and on such terms as are specified in such form or in the Board
Resolution or indenture supplemental hereto with respect to Securities of such
series as provided in Section 301. Redemption of Securities of any series shall
be made in accordance with the terms of such Securities and, to the extent that
this Article does not conflict with such terms, the succeeding Sections of this
Article.

            Section 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of
the Company to redeem any Securities redeemable at the election of the Company
shall be evidenced by, or made pursuant to authority granted by, a Board
Resolution. In case of any redemption at the election of the Company of any
Securities of any series, the Company shall, at least 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 and of
the principal amount of Securities of such series to be redeemed.

            In the case of any redemption of Securities (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (ii) 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
evidencing compliance with such restriction or condition.

            Section 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If
less than all the Securities of like tenor and terms of any series are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the


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Trustee shall deem fair and appropriate and which may include provision for the
selection for redemption of portions of the principal of Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of that series. Unless otherwise provided in the terms of a
particular series of Securities, the portions of the principal of Securities so
selected for partial redemption shall be equal to the minimum authorized
denomination of the Securities of such series, or an integral multiple thereof,
and the principal amount which remains outstanding shall not be less than the
minimum authorized denomination for Securities of such series. If less than all
the Securities of unlike tenor and terms of a series are to be redeemed, the
particular Securities to be redeemed shall be selected by the Company.

            The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected for
partial redemption, 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 of such Security which has been or is to be redeemed.

            Section 1104. 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 his address appearing in the Security Register.

            All notices of redemption shall state:

            (1) the Redemption Date;

            (2) the Redemption Price;

            (3) if less than all Outstanding Securities of any series are to be
      redeemed, the identification,


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      including CUSIP Numbers (and, in the case of partial redemption, the
      respective principal amounts) of the Securities to be redeemed, from the
      Holder to whom the notice is given;

            (4) that on the Redemption Date the Redemption Price will become due
      and payable upon each such Security, and that interest, if any, thereon
      shall cease to accrue from and after said date;

            (5) the place where such Securities are to be surrendered for
      payment of the Redemption Price, which shall be the office or agency of
      the Company in the Place of Payment; and

            (6) that the redemption is on account of a sinking or purchase fund,
      or other analogous obligation, if that be 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. Such notice shall be
deemed to have been given to each Holder if sent in accordance with Section 105
hereof.

            Section 1105. DEPOSIT OF REDEMPTION PRICE. On or prior to 10:00 a.m.
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 all the Securities which are to be redeemed on that
date.

            Section 1106. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of
Redemption having been given as aforesaid, the Securities so to be 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) such Securities shall cease to bear
interest. Upon surrender of such Securities for redemption in accordance with
the notice, such Securities shall be paid by the Company at the Redemption
Price. Installments of interest the Stated Maturity of which is on or prior to
the Redemption Date


                                                                              95


shall be payable to the Holders of such Securities registered as such 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 shall, until paid, bear interest
from the Redemption Date at the rate borne by the Security, or as otherwise
provided in such Security.

            Section 1107. SECURITIES REDEEMED IN PART. Any Security which is to
be redeemed only in part shall be surrendered at the office or agency of the
Company in the Place of Payment with respect to that series (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
the same series and Stated Maturity and of like tenor and terms, 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.

            Section 1108. PROVISIONS WITH RESPECT TO ANY SINKING FUNDS. Unless
the form or terms of any series of Securities shall provide otherwise, in lieu
of making all or any part of any mandatory sinking fund payment with respect to
such series of Securities in cash, the Company may at its option (1) deliver to
the Trustee for cancellation any Securities of such series theretofore acquired
by the Company, or (2) receive credit for any Securities of such series (not
previously so credited) acquired by the Company and theretofore delivered to the
Trustee for cancellation or redeemed by the Company other than through the
mandatory sinking fund, and if it does so then (i) Securities so delivered or
credited shall be credited at the applicable sinking fund Redemption Price with
respect to Securities of such series, and (ii) on or before the 60th day next
preceding each sinking fund Redemption Date with respect to


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such series of Securities, the Company will deliver to the Trustee (A) an
Officers' Certificate specifying the portions of such sinking fund payment to be
satisfied by payment of cash and by delivery or credit of Securities of such
series acquired by the Company or so redeemed, and (B) such Securities so
acquired, to the extent not previously surrendered. Such Officers' Certificate
shall also state the basis for such credit and that the Securities for which the
Company elects to receive credit have not been previously so credited and were
not redeemed by the Company through operation of the mandatory sinking fund, if
any, provided with respect to such Securities and shall also state that no Event
of Default with respect to Securities of such series has occurred and is
continuing. All Securities so delivered to the Trustee shall be canceled by the
Trustee and no Securities shall be authenticated in lieu thereof.

            If the sinking fund payment or payments (mandatory or optional) with
respect to any series of Securities made in cash plus any unused balance of any
preceding sinking fund payments with respect to Securities of such series made
in cash shall exceed $50,000 (or a lesser sum if the Company shall so request),
unless otherwise provided by the terms of such series of Securities, that cash
shall be applied by the Trustee on the sinking fund Redemption Date with respect
to Securities of such series next following the date of such payment to the
redemption of Securities of such series at the applicable sinking fund
Redemption Price with respect to Securities of such series, together with
accrued interest, if any, to the date fixed for redemption, with the effect
provided in Section 1106. The Trustee shall select, in the manner provided in
Section 1103, for redemption on such sinking fund Redemption Date a sufficient
principal amount of Securities of such series to utilize that cash and shall
thereupon cause notice of redemption of the Securities of such series for the
sinking fund to be given in the manner provided in Section 1104 (and with the
effect provided in Section 1106) for the redemption of Securities in part at the
option of the Company. Any sinking fund moneys not so applied or allocated by
the Trustee to the redemption of Securities of such series shall be added to the
next cash sinking fund payment with respect to Securities of such series
received by the Trustee and, together with such payment, shall be applied in
accordance with the provisions of this Section 1108. Any and all sinking fund
moneys with


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respect to Securities of any series held by the Trustee at the Maturity of
Securities of such series, and not held for the payment or redemption of
particular Securities of such series, shall be applied by the Trustee, together
with other moneys, if necessary, to be deposited sufficient for the purpose, to
the payment of the principal of the Securities of such series at Maturity.

            On or before each sinking fund Redemption Date provided with respect
to Securities of any series, the Company shall pay to the Trustee in cash a sum
equal to all accrued interest, if any, to the date fixed for redemption on
Securities to be redeemed on such sinking fund Redemption Date pursuant to this
Section 1108.

                                 ARTICLE TWELVE

                                  SUBORDINATION

            Section 1201. AGREEMENT OF SECURITYHOLDERS THAT SECURITIES
SUBORDINATED TO EXTENT PROVIDED. The Company, for itself, its successors and
assigns, covenants and agrees and each Holder of the Securities by his or her
acceptance thereof likewise covenants and agrees that the payment of the
principal of, premium, if any, and interest on each and all of the Securities is
hereby expressly subordinated, to the extent and in the manner hereinafter set
forth, to the prior payment in full of all Senior Indebtedness. The provisions
of this Article shall constitute a continuing offer to all persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are hereby made obligees hereunder the
same as if their names were written herein as such, and the and/or each of them
may proceed to enforce such provisions.

            Section 1202. COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO
SECURITIES IN CERTAIN CIRCUMSTANCES. (a) Upon the maturity of any Senior
Indebtedness by lapse of time, acceleration or otherwise, all principal thereof
and premium, if any, and interest thereon shall first be paid in


                                                                              98


full, or such payment duly provided for in cash or in a manner satisfactory to
the holder or holders of such Senior Indebtedness, before any payment is made on
account of the principal of or premium, if any, or interest on the Securities or
to acquire any of the Securities or on account of any sinking fund (except
sinking fund payments made in Securities acquired by the Company before the
maturity of such Senior Indebtedness).

            (b) Upon the happening of (i) an event of default with respect to
any Senior Indebtedness, as such event of default is defined therein or in the
instrument under which it is outstanding, permitting the holders to accelerate
the maturity thereof, or (ii) an event which, with the giving of notice, or
lapse of time, or both, would constitute such an event of default, then, unless
and until such event shall have been cured or waived or shall have ceased to
exist, no payment shall be made by the Company with respect to the principal of
or premium, if any, or interest on the Securities or to acquire any of the
Securities or on account of any sinking fund for the Securities (except sinking
fund payments made in Securities acquired by the Company before such default and
notice thereof).

            (c) In the event that notwithstanding the provisions of this Section
1202 the Company shall make any payment to the Trustee on account of the
principal of or premium, if any, or interest on the Securities, or on account of
any sinking fund, or the Holders of the Securities shall receive any such
payment, after the happening of a default in payment of the principal of or
premium, if any, or interest on Senior Indebtedness, then, unless and until such
default or event of default shall have been cured or waived or shall have ceased
to exist, such payment (subject to the provisions of Section 1206) shall be held
by the Trustee or the Holders of the Securities, as the case may be, in trust
for the benefit of, and shall be paid forthwith over and delivered to, the
holders of Senior Indebtedness (pro rata as to each of such holders on the basis
of the respective amounts of Senior Indebtedness held by them) or their
representatives or the trustee under the indenture or other agreement (if any)
pursuant to which any instruments evidencing any Senior Indebtedness may have
been issued, as their respective interests may appear, for application to the
payment of all Senior Indebtedness


                                                                              99


remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in accordance with the terms of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness. The Company shall give prompt written notice to the Trustee of any
default under any Senior Indebtedness or under any agreement pursuant to which
Senior Indebtedness may have been issued.

            Section 1203. SECURITIES SUBORDINATED TO PRIOR PAYMENTS OF ALL
SENIOR INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE
COMPANY. Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise):

            (a) the holders of all Senior Indebtedness shall first be entitled
      to receive payment in full of the principal thereof, premium, if any, and
      interest due thereon before the Holders of the Securities are entitled to
      receive any payment on account of the principal of, premium, if any, or
      interest on the Securities;

            (b) any payment or distribution of assets of the Company of any kind
      or character, whether in cash, property or securities, to which the
      Holders of the Securities or the Trustees would be entitled except for the
      provisions of this Article Twelve, shall be paid by the liquidating
      trustee or agent or other person making such payment or distribution,
      whether a trustee in bankruptcy, a receiver or liquidating trustee or
      other trustee or agent, directly to the holders of Senior Indebtedness or
      their representative or representatives, or to the trustee or trustees
      under any indenture under which any instruments evidencing any of such
      Senior Indebtedness may have been issued, to the extent necessary to make
      payment in full of all Senior Indebtedness remaining unpaid, after giving
      effect to any concurrent payment or distribution or


                                                                             100


      provision therefor to the holders of such Senior Indebtedness;

            (c) in the event that notwithstanding the foregoing provisions of
      this Section 1203, any payment or distribution of assets of the Company of
      any kind or character, whether in cash, property or securities, shall be
      received by the Trustee or the Holders of the Securities on account of
      principal, or premium, if any, or interest on the Securities before all
      Senior Indebtedness is paid in full, or effective provisions made for its
      payment, such payment or distribution (subject to the provisions of
      Sections 1206 and 1207) shall be received and held in trust for and shall
      be paid over to the holders of the Senior Indebtedness remaining unpaid or
      unprovided for or their representative or representatives, or to the
      trustee or trustees under any indenture under which any instruments
      evidencing any of such Senior Indebtedness may have been issued, for
      application to the payment of such Senior Indebtedness until all such
      Senior Indebtedness shall have been paid in full, after giving effect to
      any concurrent payment or distribution or provision therefor to the
      holders of such Senior Indebtedness.

            Section 1204. SECURITYHOLDERS TO BE SUBROGATED TO RIGHT OF HOLDERS
OF SENIOR INDEBTEDNESS. Subject to the payment in full of all Senior
Indebtedness, the Holders of the Securities shall be subrogated to the rights of
the holders of Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Securities shall be paid in full, and for the purpose of such
subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the Holders of
the Securities by virtue of this Article which otherwise would have been made to
the Holders of the Securities, be deemed to be payment by the Company to or on
account of the Senior Indebtedness, it being understood that the provisions of
this Article Twelve 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 the Senior Indebtedness, on the other hand.


                                                                             101


            Section 1205. OBLIGATION OF THE COMPANY UNCONDITIONAL. Nothing
contained in this Article Twelve or elsewhere in this Indenture or in the
Securities is intended to or shall impair as between the Company and the Holders
of the Securities, the obligations of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of,
premium, if any, and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture subject to the rights, if any, under this Article Twelve of
the holders of Senior Indebtedness in respect of cash, property or securities of
the Company received upon the exercise of any such remedy. Upon any distribution
of assets of the Company referred to in this Article Twelve, the Trustee,
subject to the provisions of Section 601, and the Holders of the Securities
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the Trustee or to
the Holders of the Securities, for the purpose of ascertaining the persons
entitled to participate in such 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 Twelve.

            Section 1206. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE. The Trustee shall not at any time be charged with knowledge
of the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Company or from one
or more holders of


                                                                             102


Senior Indebtedness or from any trustee therefor; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Section 601,
shall be entitled to assume conclusively that no such facts exist.

            Section 1207. APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT.
Anything in this Indenture to the contrary notwithstanding, any deposit of
monies by the Company with the Trustee or any paying agent (whether or not in
trust) for the payment of the principal of or premium, if any, or interest on
any Securities shall be subject to the provisions of Sections 1201, 1202, 1203
and 1204 except that, if prior to the date on which by the terms of this
Indenture any such monies may become payable for any purpose (including, without
limitation, the payment of either the principal of or interest or premium, if
any, on any Security) a Responsible Officer of the Trustee shall not have
received with respect to such monies the notice provided for in Section 1206,
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 on or after such date.

            Section 1208. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS. No right of any present or future
holders 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
which any such holder may have or be otherwise charged with.

            Section 1209. SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES. Each Holder of the Securities by his or her
acceptance thereof authorizes and expressly directs the Trustee on his or her
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Twelve and appoints the Trustee his/her
attorney-in-fact for such purpose, including, in the event of any dissolution,
winding


                                                                             103


up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company, the immediate filing of a claim for the unpaid balance of its or
his or her Securities in the form required in said proceedings and cause said
claim to be approved. If the trustee does not file a proper claim or proof of
debt in the form required in such proceeding prior to 30 days before the
expiration of the time to file such claim or claims, then the holder or holders
of the Senior Indebtedness are hereby authorized to and have the right to file
an appropriate claim for and on behalf of the holders of said Securities.

            Section 1210. RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS. The
Trustee shall be entitled to all of the rights set forth in this Article Twelve
in respect of any Senior Indebtedness at any time held by it to the same extent
as any other holder of Senior Indebtedness, and nothing in Section 613 or
elsewhere in this Indenture shall be construed to deprive the Trustee of any of
its rights as such holder.

            Section 1211. ARTICLE TWELVE NOT TO PREVENT EVENTS OF DEFAULT. The
failure to make a payment on account of principal, interest or sinking fund by
reason of any provision of this Article Twelve shall not be construed as
preventing the occurrence of an Event of Default under Section 501.

                               [ARTICLE THIRTEEN]

                            [GUARANTEE OF SECURITIES]

            [SECTION 1301. GUARANTEE. The Guarantor hereby fully and
unconditionally guarantees to each Holder of a Security of each series issued by
the Company, authenticated and delivered by the Trustee, the due and punctual
payment of the principal (including any amount due in respect of any Original
Issue Discount Security) of and any premium and


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interest on such Security, and the due and punctual payment of any sinking fund
payments provided for pursuant to the terms of such Security, when and as the
same shall become due and payable, whether at the Stated Maturity, by
declaration of acceleration, call for redemption, early repayment or otherwise,
in accordance with the terms of such Security and this Indenture. The Guarantor
hereby agrees that in the event of an Event of Default its obligations hereunder
shall be as if it were a principal debtor and not merely a surety, and shall be
absolute and unconditional, irrespective of, and shall be unaffected by, any
invalidity, irregularity or unenforceability of any Security of any series or
this Indenture, any failure to enforce the provisions of any Security of any
series or this Indenture, any waiver, modification or indulgence granted to the
Company with respect thereto by the Holder of any Security of any series or the
Trustee, or any other circumstances which may otherwise constitute a legal or
equitable discharge of a surety or guarantor; provided, however, that,
notwithstanding the foregoing, no such waiver, modification or indulgence shall,
without the consent of the Guarantor, increase the principal amount of any
Security or the interest rate thereon or increase any premium payable upon
redemption thereof. The Guarantor hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of merger or bankruptcy
of the Company, any right to require a proceeding first against the Company, the
benefit of discussion, protest or notice with respect to any Security or the
indebtedness evidenced thereby or with respect to any sinking fund payment
required pursuant to the terms of such Security issued under this Indenture and
all demands whatsoever, and covenants that this Guarantee will not be discharged
with respect to such Security except by payment in full of the principal thereof
and any premium and interest thereon or as provided in Article Four or Section
802. If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantor, or any custodian, trustee, liquidator or
other similar official acting in relation to the Company or the Guarantor any
amount paid by the Company or the Guarantor to the Trustee or such Holder, this
Guarantee to the extent theretofore discharged, shall be reinstated in full
force and effect. The Guarantor further agrees that, as between the Guarantor,
on the one hand, and the Holders and the Trustee, on the other hand, the
Maturity of the obligations guaranteed


                                                                             105


hereby may be accelerated as provided in Article Five hereof for the purposes of
this Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby.

            The Guarantor also agrees, to pay any and all reasonable costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Trustee or any Holders in enforcing any rights under this Guarantee.

            The Guarantor hereby waives any right of set off which the Guarantor
may have against the Holder of any Security in respect of any amounts which are
or may become payable by such Holder to the Company.

            The Guarantor shall be subrogated to all rights of the Holders of
any series of Securities and the Trustee against the Company in respect of any
amounts paid to such Holders and the Trustee by the Guarantor pursuant to the
provisions of the Guarantee; provided, however, that the Guarantor shall not be
entitled to enforce or to receive any payments arising out of or based upon,
such right of subrogation until the principal of, premium, if any, and interest,
if any, on all of the Securities of such series shall have been paid in full.

            No past, present or future stockholder, officer, director, employee
or incorporator of the Guarantor shall have any personal liability under the
Guarantees set forth in this Section 1301 by reason of his, her or its status as
such stockholder, officer, director, employee or incorporator.

            The Guarantee set forth in this Section 1301 shall not be valid or
become obligatory for any purpose with respect to any Security until the
certificate of authentication on such Security shall have been signed by or on
behalf of the Trustee.]

            [SECTION 1302. SUBORDINATION OF GUARANTEE. The obligation of the
Guarantor under the Guarantee pursuant to


                                                                             106


this Article 13 shall be junior and subordinated to Senior Indebtedness of the
Guarantor on the same basis as the Securities are junior and subordinated to
Senior Indebtedness of the Company. For purposes of the foregoing sentence, the
Trustee and the Holders shall have the right to receive and/or retain payments
by the Guarantor only at such times as them may receive and/or retain payments
in respect of the Securities pursuant to this Indenture, including Article 12
hereof. The Guarantee made by the Guarantor hereunder and evidenced by any
notation of Guarantee endorsed on any Security is subject to the provisions of
Article 12 hereof.]

            [SECTION 1303. EXECUTION OF NOTATIONS OF GUARANTEE. To evidence its
Guarantee to the Holders specified in Section 1301, the Guarantor hereby agrees
to execute the notation of the Guarantee in substantially the form set forth in
Section 205 to be endorsed on each Security authenticated and delivered by the
Trustee. The Guarantor hereby agrees that its Guarantee set forth in Section
1301 shall remain in full force and effect notwithstanding any failure to
endorse on any Security a notation of such Guarantee. Each such notation of
Guarantee shall be signed on behalf of the Guarantor by any proper officer of
the Guarantor prior to the authentication of the Security on which it is
endorsed, and the delivery of such Security by the Trustee, after the due
authentication thereof by the Trustee hereunder, shall constitute due delivery
of the Guarantee on behalf of the Guarantor. Such signatures upon the notation
of the Guarantee may be manual or facsimile signatures of any present, past or
future proper officer of the Guarantor and may be imprinted or otherwise
reproduced below the notation of the Guarantee, and in case any such proper
officer of the Guarantor who shall have signed the notation of the Guarantee
shall cease to be such officer before the Security on which such notation is
endorsed shall have been authenticated and delivered by the Trustee or disposed
of by the Company, such Security nevertheless may be authenticated and delivered
or disposed of as though the person who signed the notation of the Guarantee had
not ceased to be such officer of the Guarantor.]]

            IN WITNESS WHEREOF, the parties hereto have caused


                                                                             107


this Indenture to be duly executed, all as of the day and year first above
written.


                                        WHITE MOUNTAINS INSURANCE
                                        GROUP, LTD.

                                        by

                                          Name:
                                          Title:


                                        FUND AMERICAN COMPANIES, INC.,

                                        by

                                          Name:
                                          Title:


                                        BANK ONE, NATIONAL
                                        ASSOCIATION,

                                        by

                                            Name:
                                            Title:




                                                                     Exhibit 4.5

                     [Form of Junior Subordinated Indenture]
================================================================================

                      WHITE MOUNTAINS INSURANCE GROUP, LTD.
                                    Guarantor

                          FUND AMERICAN COMPANIES, INC.
                                     Company

                                       and

                         BANK ONE, NATIONAL ASSOCIATION
                                     Trustee

                          JUNIOR SUBORDINATED INDENTURE

                         Dated as of ____________, 200_

                 Providing for Issuance of Securities in Series

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

                                                                               2


                              CROSS-REFERENCE TABLE

  TIA                                                            INDENTURE
SECTION                                                           SECTION
- -------                                                           -------

310(a)(1)                                                      609
   (a)(2)                                                      609
   (a)(3)                                                      N.A.
   (a)(4)                                                      N.A.
      (b)                                                      608; 610
      (c)                                                      N.A.
   311(a)                                                      613
      (b)                                                      613
      (c)                                                      N.A.
   312(a)                                                      701
      (b)                                                      702
      (c)                                                      702
   313(a)                                                      703
   (b)(1)                                                      N.A.
   (b)(2)                                                      703
      (c)                                                      703
      (d)                                                      703
   314(a)                                                      704
      (b)                                                      N.A.
   (c)(1)                                                      102
   (c)(2)                                                      102
   (c)(3)                                                      N.A.
      (d)                                                      N.A.
      (e)                                                      102
   315(a)                                                      601
      (b)                                                      602
      (c)                                                      602
      (d)                                                      602
      (e)                                                      602
316(a)(last sentence)                                          502
(a)(1)(A)                                                      512
(a)(1)(B)                                                      502
   (a)(2)                                                      N.A.
      (b)                                                      508
317(a)(1)                                                      503
   (a)(2)                                                      504
      (b)                                                      1003
   318(a)                                                      107
                           N.A. means Not Applicable.


                              ---------------------
          Note: This Cross-Reference Table shall not, for any purpose,
                     be deemed to be part of the Indenture.

                                                                               3


                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

Recitals of the Company                                                        1
Agreements of the Parties                                                      1

                                   ARTICLE ONE
                              DEFINITIONS AND OTHER
                        PROVISIONS OF GENERAL APPLICATION

Section 101.           Definitions                                             2
                       Act                                                     2
                       Affiliate                                               2
                       Authenticating Agent                                    3
                       Board of Directors                                      3
                       Board Resolution                                        3
                       Business Day                                            3
                       Commission                                              3
                       Common Securities                                       3
                       Company                                                 3
                       Company Request, Company Order and
                         Company Consent                                       4
                       Corporate Trust Office                                  4
                       Debt                                                    4
                       Declaration of Trust                                    4
                       Defaulted Interest                                      4
                       Depositary                                              4
                       Event of Default                                        4
                       Extension Period                                        4
                       Fund American Trust                                     4
                       Fund American Trust Guarantee                           4
                       Global Security                                         5
                       Guarantee                                               5
                       Guarantor                                               5
                       Guarantor Board of Directors                            5
                       Guarantor's Board Resolution                            5
                       Guarantor Request, Guarantor
                         Order, Guarantor Consent                              5
                       Holder                                                  5
                       Indenture, this Indenture                               5
                       Interest                                                6


                                                                               4


                       Interest Payment Date                                   6
                       Maturity                                                6
                       Officers' Certificate                                   6
                       Opinion of Counsel                                      6
                       Original Issue Discount Security                        6
                       Outstanding                                             7
                       Paying Agent                                            8
                       Person                                                  8
                       Place of Payment                                        8
                       Predecessor Securities                                  8
                       Preferred Securities                                    8
                       Property Trustee                                        8
                       Redemption Date                                         8
                       Redemption Price                                        8
                       Regular Record Date                                     8
                       Repayment Date                                          9
                       Repayment Price                                         9
                       Responsible Officer                                     8
                       Security or Securities                                  9
                       Security Exchange                                       9
                       Security Register                                       9
                       Security Registrar                                      9
                       Securityholder                                          9
                       Senior Indebtedness                                     9
                       Special Record Date                                    10
                       Stated Maturity                                        10
                       Subsidiary                                             10
                       Trust Indenture Act or TIA                             10
                       Trustee                                                10
                       U.S. Government Obligations                            11
                       Vice President                                         11
                       Voting Stock                                           11
Section 102.           Compliance Certificates and Opinions                   11
Section 103.           Form of Documents Delivered to
                         Trustee                                              12
Section 104.           Acts of Securityholders                                13
Section 105.           Notices, etc., to Trustee, Guarantor
                         and Company                                          14
Section 106.           Notices to Securityholders; Waiver                     15
Section 107.           Conflict with Trust Indenture Act                      15
Section 108.           Effect of Headings and Table of
                         Contents                                             15
Section 109.           Successors and Assigns                                 16
Section 110.           Separability Clause                                    16
Section 111.           Benefits of Indenture                                  16
Section 112.           Governing Law                                          16


                                                                               5


Section 113.           Counterparts                                           16
Section 114.           Judgment Currency                                      16
Section 115.           Certain Rights of Holders of
                         Preferred Securities                                 17

                                   ARTICLE TWO

                                 SECURITY FORMS

Section 201.           Forms Generally                                        17
Section 202.           Forms of Securities                                    18
Section 203.           Form of Trustee's Certificate of
                         Authentication                                       18
Section 204.           Securities Issuable in the Form of a
                         Global Security                                      19
Section 205.           Form of Notation of Guarantee                          21

                                  ARTICLE THREE

                                 THE SECURITIES

Section 301.           General Title; General Limitations;
                         Issuable in Series; Terms of
                         Particular Series                                    22
Section 302.           Denominations                                          26
Section 303.           Execution, Authentication and
                       Delivery and Dating                                    26
Section 304.           Temporary Securities                                   28
Section 305.           Registration, Transfer and Exchange                    29
Section 306.           Mutilated, Destroyed, Lost and
                         Stolen Securities                                    30
Section 307.           Payment of Interest; Interest Rights
                         Preserved                                            31
Section 308.           Persons Deemed Owners                                  33
Section 309.           Cancellation                                           33
Section 310.           Computation of Interest                                33
Section 311.           Medium-Term Securities                                 33
Section 312.           CUSIP Numbers                                          34
Section 313.           Global Securities                                      34
Section 314.           Deferrals of Interest Payment Dates                    36

                                                                               6


                                  ARTICLE FOUR

                    SATISFACTION AND DISCHARGE OF INDENTURE;
                          DEFEASANCE; UNCLAIMED MONEYS

Section 401.           Applicability of Article                               38
Section 402.           Satisfaction and Discharge of
                         Indenture; Defeasance                                38
Section 403.           Conditions of Defeasance                               40
Section 404.           Application of Trust Money                             41
Section 405.           Repayment to Company or Guarantor                      41
Section 406.           Indemnity for U.S. Government
                         Obligations                                          42
Section 407.           Reinstatement                                          42

                                  ARTICLE FIVE

                                    REMEDIES

Section 501.           Events of Default                                      42
Section 502.           Acceleration of Maturity; Rescission
                         and Annulment                                        44
Section 503.           Collection of Indebtedness and Suits
                         for Enforcement by Trustee                           46
Section 504.           Trustee May File Proofs of Claim                       47
Section 505.           Trustee May Enforce Claims Without
                         Possession of Securities                             48
Section 506.           Application of Money Collected                         48
Section 507.           Limitation on Suits                                    49
Section 508.           Unconditional Right of
                         Securityholders to Receive
                         Principal, Premium and Interest                      50
Section 509.           Restoration of Rights and Remedies                     51
Section 510.           Rights and Remedies Cumulative                         51
Section 511.           Delay or Omission Not Waiver                           51
Section 512.           Control by Securityholders                             51
Section 513.           Waiver of Past Defaults                                52
Section 514.           Undertaking for Costs                                  52
Section 515.           Waiver of Stay or Extension Laws                       53

                                                                               7


                                ARTICLE SIX

                                THE TRUSTEE

Section 601.           Certain Duties and Responsibilities                    53
Section 602.           Notice of Defaults                                     55
Section 603.           Certain Rights of Trustee                              55
Section 604.           Not Responsible for Recitals or
                         Issuance of Securities                               57
Section 605.           May Hold Securities                                    57
Section 606.           Money Held in Trust                                    57
Section 607.           Compensation and Reimbursement                         57
Section 608.           Disqualification; Conflicting
                         Interests                                            58
Section 609.           Corporate Trustee Required;
                         Eligibility                                          58
Section 610.           Resignation and Removal; Appointment
                         of Successor                                         59
Section 611.           Acceptance of Appointment by
                         Successor                                            61
Section 612.           Merger, Conversion, Consolidation or
                         Succession to Business                               62
Section 613.           Preferential Collection of Claims
                         Against Company                                      62
Section 614.           Appointment of Authenticating Agent                    67

                                  ARTICLE SEVEN

                      SECURITYHOLDERS' LISTS AND REPORTS BY
                         TRUSTEE, GUARANTOR AND COMPANY

Section 701.           Company to Furnish Trustee Names and
                         Addresses of Securityholders                         69
Section 702.           Preservation of Information;
                       Communications to Securityholders                      69
Section 703.           Reports by Trustee                                     71
Section 704.           Reports by Company                                     73

                                                                               8


                                  ARTICLE EIGHT

               CONSOLIDATION, AMALGAMATION, MERGER, CONVEYANCE OR
                                    TRANSFER

Section 801.           Company May Consolidate, etc., only
                         on Certain Terms                                     74
Section 802.           Successor Person Substituted for
                         Company                                              74
Section 803.           Guarantor May Consolidate, etc. only
                         on Certain Terms                                     75
Section 804.           Successor Person Substituted for
                         Guarantor                                            75

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

Section 901.           Supplemental Indentures Without
                         Consent of Securityholders                           76
Section 902.           Supplemental Indentures with Consent
                         of Securityholders                                   77
Section 903.           Execution of Supplemental Indentures                   79
Section 904.           Effect of Supplemental Indentures                      79
Section 905.           Conformity with Trust Indenture Act                    79
Section 906.           Reference in Securities to
                         Supplemental Indentures                              79

                                   ARTICLE TEN

                                    COVENANTS

Section 1001.          Payment of Principal, Premium and
                         Interest                                             79
Section 1002.          Maintenance of Office or Agency                        80
Section 1003.          Money for Security Payments to Be
                         Held in Trust                                        80
Section 1004.          Statement as to Compliance                             82
Section 1005.          Corporate Existence                                    83
Section 1006.          Additional Covenants                                   83

                                                                               9


                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

Section 1101.          Applicability of Article                               84
Section 1102.          Election to Redeem; Notice to
                         Trustee                                              84
Section 1103.          Selection by Trustee of Securities
                         to Be Redeemed                                       85
Section 1104.          Notice of Redemption                                   85
Section 1105.          Deposit of Redemption Price                            86
Section 1106.          Securities Payable on Redemption
                         Date                                                 86
Section 1107.          Securities Redeemed in Part                            87
Section 1108.          Provisions with Respect to any
                         Sinking Funds                                        87

                                 ARTICLE TWELVE

                                  SUBORDINATION

Section 1201.          Agreement of Securityholders that
                         Securities Subordinated to Extent
                         Provided                                             89
Section 1202.          Company not to Make Payments With
                         Respect to Securities in Certain
                         Circumstances                                        89
Section 1203.          Securities Subordinated to Prior
                         Payments of All Senior
                         Indebtedness on Dissolution,
                         Liquidation or
                         Reorganization of the Company                        90
Section 1204.          Securityholders to be Subrogated to
                         Right of Holders of Senior
                         Indebtedness                                         91
Section 1205.          Obligation of the Company
                         Unconditional                                        92
Section 1206.          Trustee Entitled to Assume Payments
                         Not Prohibited in Absence of
                         Notice                                               92
Section 1207.          Application by Trustee of Monies
                         Deposited With It                                    93
Section 1208.          Subordination Rights Not Impaired by
                         Acts or Omissions of Company or
                         Holders of Senior Indebtedness                       93

                                                                              10


Section 1209.          Securityholders Authorize Trustee to
                         Effectuate Subordination of
                         Securities                                           93
Section 1210.          Right of Trustee to Hold Senior
                         Indebtedness                                         94
Section 1211.          Article Twelve Not to Prevent Events
                         of Default                                           94

                                ARTICLE THIRTEEN

                             GUARANTEE OF SECURITIES

Section 1301.          Guarantee of Securities                                94
Section 1302.          Subordination of Guarantee                             96
Section 1303.          Execution of Notations of Guarantee                    96

                                                                              11


                                    [Form of]

                        JUNIOR SUBORDINATED INDENTURE (this "Indenture") between
                  WHITE MOUNTAINS INSURANCE GROUP, LTD. a company existing under
                  the laws of Bermuda (the "Guarantor") having its principal
                  office at 80 South Main Street, Hanover, New Hampshire
                  03755-2053, FUND AMERICAN COMPANIES, INC., a Delaware
                  corporation (the "Company") having its principal office at One
                  Beacon Street, Boston, Massachusetts 02108-3100 (White
                  Mountains Insurance Group, Ltd., and Fund American Companies
                  Inc., each hereinafter called the "Company"), and BANK ONE,
                  NATIONAL ASSOCIATION, trustee (hereinafter called the
                  "Trustee"), is made and entered into as of this ___ day of
                  ________, 200_.

                    RECITALS OF THE COMPANY AND THE GUARANTOR

            The Company and the Guarantor each has duly authorized the execution
and delivery of this Indenture to provide for, in the case of the Company, the
issuance of, and in the case of the Guarantor, the guarantee of, the Company's
debentures, notes, bonds or other evidences of indebtedness, to be issued in one
or more fully registered series.

            All things necessary to make this Indenture a valid agreement of
each of the Company and the Guarantor, in accordance with its terms, have been
done.

                            AGREEMENTS OF THE PARTIES

            To set forth or to provide for the establishment of the terms and
conditions upon which the Securities are and are to be authenticated, issued and
delivered, and in consideration of the premises and the purchase of Securities
by the Holders thereof, it is mutually covenanted and agreed

                                                                              12


as follows, for the equal and proportionate benefit of all Holders of the
Securities or of a series thereof, as the case may be:

                                   ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

            Section 101. DEFINITIONS. For all purposes of this Indenture and of
any indenture supplemental hereto, 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 or by Commission rule under 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 in the United States of America at the date of such
      computation;

            (4) all references in this instrument to designated "Articles",
      "Sections" and other subdivisions are to the designated Articles, Sections
      and other subdivisions of this instrument as originally executed. 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; and

            (5) "including" and words of similar import shall be deemed to be
      followed by "without limitation".

                                                                              13


            Certain terms, used principally in Article Six, are defined in that
Article.

            "ACT", when used with respect to any Securityholder, 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 to
authenticate Securities under Section 614.

            "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 and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

            "BUSINESS DAY" means each day which is neither a Saturday, Sunday or
other day on which banking institutions in the pertinent Place or Places of
Payment are authorized or required by law or executive order to be closed.

            "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

                                                                              14


duties on such date.

            "COMMON SECURITIES" means the common undivided beneficial interests
in the assets of the applicable Fund American Trust.

            "COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor replaces it and, thereafter,
"Company" shall mean the successor and, for purposes of any provision contained
herein and required by the TIA, each other obligor on the Securities.

            "COMPANY REQUEST", "COMPANY ORDER" and "COMPANY CONSENT" mean,
respectively, a written request, order or consent signed in the name of the
Company by its Chairman of the Board, President or a Vice President, and by its
Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.

            "CORPORATE TRUST OFFICE" means the principal office of the Trustee
in [  ] at which at any particular time its corporate trust business shall be
principally administered, which office at the date hereof is located at [  ],
except that with respect to the presentation of Securities for payment or for
registration of transfer and exchange, such term shall mean the office or the
agency of the Trustee in said city at which at any particular time its corporate
agency business shall be conducted, which office at the date hereof is located
at [  ].

            "DEBT" means indebtedness for money borrowed.

            "DECLARATION OF TRUST" means the Declaration of Trust of the Fund
American Trust, if any, specified in the applicable Board Resolution or
supplemental indenture establishing a particular series of Securities pursuant
to Section 301.

            "DEFAULTED INTEREST" has the meaning specified in Section 307.

                                                                              15


            "DEPOSITARY" means, unless otherwise specified by the Company
pursuant to either Section 204 or 301, with respect to Securities of any series
issuable or issued as a Global Security, The Depository Trust Company, New York,
New York, or any successor thereto registered as a clearing agency under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation.

            "FUND AMERICAN TRUST" means, as the context requires, Fund American
Trust I, Fund American Trust II or Fund American Trust III, each a business
trust created under the laws of the State of Delaware, or any other business
trust created under the laws of the State of Delaware, any of which may be
specified in the applicable Board Resolution or supplemental indenture
establishing a particular series of Securities pursuant to Section 301 as the
Person who will hold such series of Securities.

            "FUND AMERICAN TRUST GUARANTEE" means the guarantee, if any, that
the Guarantor may enter into that operates directly or indirectly for the
benefit of holders of Preferred Securities issued by a Fund American Trust.

            "EVENT OF DEFAULT" has the meaning specified in Article Five.

            "EXTENSION PERIOD" has the meaning specified in Section 314 of this
Indenture.

            "GLOBAL SECURITY" means with respect to any series of Securities
issued hereunder, a Security which is executed by the Company and authenticated
and delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Indenture and an indenture supplemental
hereto, if any, or Board Resolution and pursuant to a Company Request, which
shall be registered in the name of the Depositary or its nominee and which shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all of the Outstanding Securities of such series or any
portion thereof, in either case having the same terms, including, without
limitation, the same original issue date, date or dates on which principal is
due, and interest rate or method of determining interest.

                                                                              16


            "GUARANTEE" means the irrevocable and unconditional guarantee by the
Guarantor of any Security of any series of the Company authenticated and
delivered pursuant to Article Thirteen.

            "GUARANTOR" means the Person named as the "Guarantor" in the first
paragraph of this instrument until a successor replaces it and, thereafter,
"Guarantor" shall mean the successor.

            "GUARANTOR BOARD OF DIRECTORS" means either the board of directors
of the Guarantor or any duly authorized committee of that board.

            "GUARANTOR'S BOARD RESOLUTION" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Guarantor to have
been duly adopted by the Guarantor Board of Directors.

            "GUARANTOR REQUEST", "GUARANTOR ORDER", "GUARANTOR CONSENT" means,
respectively, a written request, order or consent signed in the name of the
Guarantor by its Chairman of the Board, President or a Vice President, and by
its Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.

            "HOLDER", when used with respect to any Security, means a
Securityholder.

            "INDENTURE" or "THIS 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 particular series of Securities
established as contemplated by Section 301.

            "INTEREST", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

                                                                              17


            "INTEREST PAYMENT DATE", when used with respect to any series of
Securities, means the Stated Maturity of any installment of interest on those
Securities.

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

            "OFFICERS' CERTIFICATE" means, with respect to the Company or the
Guarantor, a certificate signed by the Chairman of the Board, the President or a
Vice President, and by the Treasurer, an Assistant Treasurer, the Controller, an
Assistant Controller, the Secretary or an Assistant Secretary of the Company or
the Guarantor, as the case may be, and delivered to the Trustee. Wherever this
Indenture requires that an Officers' Certificate be signed also by an engineer
or an accountant or other expert, such engineer, accountant or other expert
(except as otherwise expressly provided in this Indenture) may be in the employ
of the Company or the Guarantor, as the case may be, and shall be acceptable to
the Trustee.

            "OPINION OF COUNSEL" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be an employee of or
of counsel to the Company or the Guarantor. Such counsel shall be acceptable to
the Trustee, whose acceptance shall not be unreasonably withheld.

            "ORIGINAL ISSUE DISCOUNT SECURITY" means (i) 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, and (ii) any
other Security deemed an Original Issue Discount Security for United States
Federal income tax purposes.

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

            (i) such Securities theretofore canceled by

                                                                              18

      the Trustee or delivered to the Trustee for cancellation;

      (ii) such Securities for whose payment or redemption 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 therefor satisfactory
      to the Trustee has been made; and

      (iii) such Securities in exchange for or in lieu of which other Securities
      have been authenticated and delivered pursuant to this Indenture, or which
      shall have been paid pursuant to the terms of Section 306 (except with
      respect to any such Security as to which proof satisfactory to the Trustee
      is presented that such Security is held by a person in whose hands such
      Security is a legal, valid and binding obligation of the Company).

In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, (i) the principal amount of any Original
Issue Discount Security that shall be deemed to be Outstanding shall be the
amount of the principal thereof that would be due and payable as of the date of
the taking of such action upon a declaration of acceleration of the Maturity
thereof and (ii) Securities 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. In determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer assigned to the corporate trust department of the Trustee knows to be
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or such other obligor 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

                                                                              19


of the Trustee the pledgee's right to act as owner 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.

            "PAYING AGENT" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.

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

            "PLACE OF PAYMENT" means with respect to any series of Securities
issued hereunder the city or political subdivision so designated with respect to
the series of Securities in question in accordance with the provisions of
Section 301.

            "PREDECESSOR SECURITIES" 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" means the preferred undivided beneficial
interests in the assets of the applicable Fund American Trust.

            "PROPERTY TRUSTEE" means the entity performing the function of the
Property Trustee under the applicable Declaration of Trust of a Fund American
Trust.

            "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.

                                                                              20


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

            "REGULAR RECORD DATE" for the interest payable on any Security on
any Interest Payment Date means the date specified in such Security as the
Regular Record Date.

            "REPAYMENT DATE", when used with respect to any Security to be
repaid, means the date fixed for such repayment pursuant to such Security.

            "REPAYMENT PRICE", when used with respect to any Security to be
repaid, means the price at which it is to be repaid pursuant to such Security.

            "RESPONSIBLE OFFICER", when used with respect to the Trustee, means
the chairman or vice-chairman of the board of directors, the chairman or vice-
chairman of the executive committee of the board of directors, the president,
any vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any senior trust
officer or trust officer, the controller and any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.

            "SECURITY" or "SECURITIES" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, of any series authenticated and delivered from time to time under this
Indenture.

            "SECURITY EXCHANGE" when used with respect to the Securities of any
series which are held as trust assets of a Fund American Trust pursuant to the
Declaration of Trust of such Fund American Trust means the distribution of the
Securities of such series by such Fund American Trust in exchange for the
Preferred Securities and Common Securities of such Fund American Trust in
dissolution of such Fund

                                                                              21


American Trust pursuant to the Declaration of Trust of such Fund American Trust.

            "SECURITY REGISTER" shall have the meaning specified in Section 305.

            "SECURITY REGISTRAR" means the Person who keeps the Security
Register specified in Section 305.

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

            "SENIOR INDEBTEDNESS" means the principal of and premium, if any,
and interest on the following, whether outstanding on the date of execution of
this Indenture or thereafter incurred or created (i) indebtedness of the Company
or the Guarantor for money borrowed by the Company or the Guarantor (including
purchase money obligations with an original maturity in excess of one year) or
evidenced by securities (other than the Securities), notes, bankers' acceptances
or other corporate debt securities or similar instruments issued by the Company
or the Guarantor; (ii) obligations with respect to letters of credit; (iii)
indebtedness of the Company or the Guarantor constituting a guarantee of
indebtedness of others of the type referred to in the preceding clauses (i) and
(ii); or (iv) renewals, extensions or refundings of any of the indebtedness
referred to in the preceding clauses (i), (ii) and (iii) unless, in the case of
any particular indebtedness, renewal, extension or refunding, under the express
provisions of the instrument creating or evidencing the same, or pursuant to
which the same is outstanding, such indebtedness or such renewal, extension or
refunding thereof is not superior in right of payment to the Securities.

            "SPECIAL RECORD DATE" for the payment of any Defaulted Interest (as
defined in Section 307) 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

                                                                              22


fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.

            "SUBSIDIARY" of any specified Person means any corporation, limited
liability company, limited or general partnership, business trust or other
business entity at least a majority of whose outstanding Voting Stock shall at
the time be owned, directly or indirectly, by the specified Person or by one or
more of its Subsidiaries, or both.

            "TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of
1939, as amended by the Trust Indenture Reform Act of 1990, as in force at the
date as of which this instrument was executed except as provided in Section 905.

            "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 and include each Person who is then a Trustee hereunder. 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.

            "U.S. GOVERNMENT OBLIGATIONS" means securities that are (x) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (y) 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 as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof.

            "VICE PRESIDENT" when used with respect to the Guarantor, the
Company or the Trustee means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president",
including, without limitation, an assistant vice president.

            "VOTING STOCK", as applied to the stock of any Person, means stock
of any class or classes (however designated) having by the terms thereof
ordinary voting power to elect a majority of the members of the board of

                                                                              23


directors (or other governing body) of such Person other than stock having such
power only by reason of the happening of a contingency.

            Section 102. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any
application or request by the Company or the Guarantor to the Trustee to take
any action under any provision of this Indenture, the Company or the Guarantor,
as applicable, shall furnish to the Trustee an Officers' Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such Counsel all such conditions precedent, 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 (except for the written
statement required by 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

                                                                              24


      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 the 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 or the
Guarantor 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 of the
Company or the Guarantor, as the case may be, 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 SECURITYHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Securityholders or Securityholders of any
series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
agent duly appointed in writing; and, except as herein otherwise expressly
provided,

                                                                              25


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 or the Guarantor or both of them. If any Securities are denominated in
coin or currency other than that of the United States, then for the purposes of
determining whether the Holders of the requisite principal amount of Securities
have taken any action as herein described, the principal amount of such
Securities shall be deemed to be that amount of United States dollars that could
be obtained for such principal amount on the basis of the spot rate of exchange
into United States dollars for the currency in which such Securities are
denominated (as evidenced to the Trustee by an Officers' Certificate) as of the
date the taking of such action by the Holders of such requisite principal amount
is evidenced to the Trustee as provided in the immediately preceding sentence.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders
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, the Company and the Guarantor, 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 to such
execution or by the 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 an officer of a corporation or a member of a partnership, on
behalf of such corporation or partnership, 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 the Trustee
deems sufficient.

            (c) The ownership of Securities shall be proved

                                                                              26


by the Security Register.

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

            (e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind 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 or the Guarantor in reliance thereon whether or not notation of
such action is made upon such Security.

            Section 105. NOTICES, ETC., TO TRUSTEE, GUARANTOR AND COMPANY. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Securityholders 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 Securityholder or by the Company or the
      Guarantor shall be sufficient for every purpose hereunder if made, given,
      furnished or filed in

                                                                              27


      writing to or with the Trustee at its Corporate Trust Office, or

            (2) the Company or the Guarantor by the Trustee or by any
      Securityholder shall be sufficient for every purpose hereunder (except as
      provided in Section 501(4) or, in the case of a request for repayment, as
      specified in the Security carrying the right to repayment) if in writing
      and mailed, first-class postage prepaid, to the Company or the Guarantor,
      as the case may be, 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 or
      the Guarantor, as the case may be.

            Section 106. NOTICES TO SECURITYHOLDERS; WAIVER. Where this
Indenture or any Security provides for notice to Securityholders of any event,
such notice shall be sufficiently given (unless otherwise herein or in such
Security expressly provided) if in writing and mailed, first-class postage
prepaid, to each Securityholder affected by such event, at his address as it
appears in the Security 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 Securityholders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Securityholder shall affect the sufficiency of such notice with respect to other
Securityholders. Where this Indenture or any Security 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 Securityholders 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 as a
result of a strike, work stoppage or otherwise, it shall be impractical to mail
notice of any

                                                                              28


event to any Securityholder when such notice is required to be given pursuant to
any provision of this Indenture, then any method of notification as shall be
satisfactory to the Trustee, the Guarantor and the Company shall be deemed to be
a sufficient giving of such notice.

            Section 107. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with the duties imposed by any of Sections
310 to 317, inclusive, of the Trust Indenture Act through the 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 each of the Company and the Guarantor 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
any Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Authenticating Agent or
Paying Agent, the Security Registrar and the Holders of Securities (or such of
them as may be affected thereby), any benefit or any legal or equitable right,
remedy or claim under this Indenture.

            Section 112. GOVERNING LAW. This Indenture shall be construed in
accordance with and governed by the laws of the State of New York.

            Section 113. COUNTERPARTS. 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.

                                                                              29


            Section 114. JUDGMENT CURRENCY. The Company and the Guarantor each
agrees, to the fullest extent that it may effectively do so under applicable
law, that (a) if for the purpose of obtaining judgment in any court it is
necessary to convert the sum due in respect of the principal of, or premium or
interest, if any, on the Securities of any series (the "Required Currency") into
a currency in which a judgment will be rendered (the "Judgment Currency"), the
rate of exchange used shall be the rate at which in accordance with normal
banking procedures the Trustee could purchase in New York City the Required
Currency with the Judgment Currency on the Banking Day (as defined below)
immediately preceding the date on which final unappealable judgment is given and
(b) its obligations under this Indenture to make payments in the Required
Currency (i) shall not be discharged or satisfied by any tender, or any recovery
pursuant to any judgment (whether or not entered in accordance with subsection
(a)), in any currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the actual receipt, by the payee,
of the full amount of the Required Currency expressed to be payable in respect
of such payments, (ii) shall be enforceable as an alternative or additional
cause of action for the purpose of recovering in the Required Currency the
amount, if any, by which such actual receipt shall fall short of the full amount
of the Required Currency so expressed to be payable and (iii) shall not be
affected by judgment being obtained for any other sum due under this Indenture.
For purposes of the foregoing, "Banking Day" means any day except a Saturday,
Sunday or a legal holiday in New York City or a day on which banking
institutions in New York City are authorized or required by law or executive
order to close.

            Section 115. CERTAIN RIGHTS OF HOLDERS OF PREFERRED SECURITIES. The
Company hereby acknowledges that, to the extent specifically set forth herein,
prior to a Security Exchange with respect to the Securities of any series held
as trust assets of a Fund American Trust, the holders of the Preferred
Securities of such Fund American Trust shall expressly be third party
beneficiaries of this

                                                                              30


Indenture. The Company further acknowledges that, prior to a Security Exchange
with respect to Securities of any series held as trust assets of a Fund American
Trust, if the Property Trustee of such Fund American Trust fails to enforce its
rights under this Indenture as the holder of the Securities of a series held as
trust assets of such Fund American Trust, any holder of the Preferred Securities
of such Fund American Trust may institute legal proceedings directly against the
Company to enforce such Property Trustee's rights under this Indenture without
first instituting any legal proceedings against such Property Trustee or any
other Person.

                                   ARTICLE TWO

                                 SECURITY FORMS

            Section 201. FORMS GENERALLY. The Securities shall have 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 laws or regulations or with the
rules of any securities exchange, or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. Any portion of the text of any Security may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Security.

            The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods on steel engraved borders or may
be produced in any other manner, all as determined by the officers executing
such Securities, as evidenced by their execution of such Securities, subject,
with respect to the Securities of any series, to the rules of any securities
exchange on which such Securities are listed.

            Section 202. FORMS OF SECURITIES. Each Security shall be in one of
the forms approved from time to time by

                                                                              31


or pursuant to a Board Resolution, or established in one or more indentures
supplemental hereto. Prior to the delivery of a Security to the Trustee for
authentication in any form approved by or pursuant to a Board Resolution, the
Company shall deliver to the Trustee the Board Resolution by or pursuant to
which such form of Security has been approved, which Board Resolution shall have
attached thereto a true and correct copy of the form of Security which has been
approved thereby or, if a Board Resolution authorizes a specific officer or
officers to approve a form of Security, a certificate of such officer or
officers approving the form of Security attached thereto. Any form of Security
approved by or pursuant to a Board Resolution must be acceptable as to form to
the Trustee, such acceptance to be evidenced by the Trustee's authentication of
Securities in that form or a certificate signed by a Responsible Officer of the
Trustee and delivered to the Company.

            Each Security shall bear a notation of Guarantee in substantially
the form set forth in Section 205. Notwithstanding the foregoing, the notation
of Guarantee to be endorsed on the Securities of any series may have such
appropriate insertions, omissions, substitutions and other corrections from the
form thereof referred to above 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 the
rules of any securities exchange or as may, consistently herewith, be determined
by the officers delivering the same, in each case as evidenced by such delivery.

            Section 203. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
form of Trustee's Certificate of Authentication for any Security issued pursuant
to this Indenture shall be substantially as follows:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

                                                                              32


                                    [                  ],
                                    as Trustee,


                                Dated:                        By:
                                           Authorized Signatory

            Section 204. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.
(a) If the Company shall establish pursuant to Sections 202 and 301 that the
Securities of a particular series are to be issued in whole or in part in the
form of one or more Global Securities, then the Company shall execute and the
Trustee or its agent shall, in accordance with Section 303 and the Company
Request delivered to the Trustee or its agent thereunder, authenticate and
deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Securities of such series to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
a Company Request, (ii) shall be registered in the name of the Depositary for
such Global Security or Securities or its nominee, (iii) shall be delivered by
the Trustee or its agent to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for the individual
Securities represented hereby, this Global Security may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary."

            (b) Notwithstanding any other provisions of this Section 204 or of
Section 305, and subject to the provisions of paragraph (c) below, unless the
terms of a Global Security expressly permit such Global Security to be exchanged
in whole or in part for individual Securities, a Global Security may be
transferred, in whole but not in part

                                                                              33


and in the manner provided in Section 305, only to a nominee of the Depositary
for such Global Security, or to the Depositary, or a successor Depositary for
such Global Security selected or approved by the Company, or to a nominee of
such successor Depositary.

            (c)(i) If at any time the Depositary for a Global Security notifies
the Company that it is unwilling or unable to continue as Depositary for such
Global Security or if at any time the Depositary for the Securities for such
series ceases to be a clearing agency registered under the Securities Exchange
Act of 1934, as amended, or other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to such Global Security. If a
successor Depositary for such Global Security 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 or its agent, upon
receipt of a Company Request for the authentication and delivery of individual
Securities of such series in exchange for such Global Security, will
authenticate and deliver, individual Securities of such series of like tenor and
terms in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security.

      (ii) The Company may at any time and in its sole discretion determine that
the Securities of any series or portion thereof issued or issuable 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 Request for the authentication and delivery of
individual Securities of such series in exchange in whole or in part for such
Global Security, will authenticate and deliver individual Securities of such
series of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such Global Security or Securities
representing such series or portion thereof in exchange for such Global Security
or Securities.

      (iii) If specified by the Company pursuant to Sections 202 and 301 with
respect to Securities issued or issuable in the form of a Global Security, the
Depositary for such Global Security may surrender such Global Security

                                                                              34


in exchange in whole or in part for individual Securities of such series of like
tenor and terms in definitive form on such terms as are acceptable to the
Company and such Depositary. Thereupon the Company shall execute, and the
Trustee or its agent shall authenticate and deliver, without service charge, (1)
to each Person specified by such Depositary a new Security or Securities of the
same series of like tenor and terms and 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 of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal amount of
the surrendered Global Security and the aggregate principal amount of Securities
delivered to the Holders thereof.

      (iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Securities in definitive registered form in
authorized denominations. Upon the exchange of the entire principal amount of a
Global Security for individual Securities, such Global Security shall be
canceled by the Trustee or its agent. Except as provided in the preceding
paragraph, 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 or the
Security Registrar. The Trustee or the Security Registrar shall deliver such
Securities to the Persons in whose names such Securities are so registered.

            SECTION 205. FORM OF NOTATION OF GUARANTEE. The form of notation of
Guarantee to be endorsed on any Security issued pursuant to this Indenture shall
be substantially as follows:

                              NOTATION OF GUARANTEE

                                                                              35


            White Mountains Insurance Group, Ltd., a company existing under the
law of Bermuda (the "Guarantor", which term includes any successor thereto under
the Indenture (the "Indenture") referred to in the Security on which this
notation is endorsed) has unconditionally guaranteed, pursuant to the terms of
the Guarantee contained in Article Twelve of the Indenture, the due and punctual
payment of the principal of and any premium and interest on this Security, when
and as the same shall become due and payable, whether at the Stated Maturity, by
declaration of acceleration, call for redemption, early repayment or otherwise,
in accordance with the terms of this Security and the Indenture.

            The obligations of the Guarantor to the Holders of the Securities
and to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth in Article Twelve of the Indenture, and reference is hereby made to such
Article and Indenture for the precise terms of the Guarantee.

            The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Security upon which this notation of
the Guarantee is endorsed shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized signatories.

                        WHITE MOUNTAINS INSURANCE GROUP, LTD.

                        by

                                                       _______________
                                     Name:
                                     Title:

                                  ARTICLE THREE

                                 THE SECURITIES

            Section 301. GENERAL TITLE; GENERAL LIMITATIONS; ISSUABLE IN SERIES;
TERMS OF PARTICULAR SERIES. The aggregate principal amount of Securities which
may be authenticated and delivered and Outstanding under this

                                                                              36


Indenture is not limited.

            The Securities may be issued in one or more series up to an
aggregate principal amount of Securities as from time to time may be authorized
by the Board of Directors. All Securities of each series under this Indenture
shall in all respects be equally and ratably entitled to the benefits hereof
with respect to such series without preference, priority or distinction on
account of the actual time of the authentication and delivery or Stated Maturity
of the Securities of such series.

            Each series of Securities shall be created either by or pursuant to
a Board Resolution or by or pursuant to an indenture supplemental hereto. The
Securities of each such series may bear such date or dates, be payable at such
place or places, have such Stated Maturity or Maturities, be issuable at such
premium over or discount from their face value, bear interest at such rate or
rates (which may be fixed or floating), from such date or dates, payable in such
installments and on such dates and at such place or places to the Holders of
Securities registered as such on such Regular Record Dates, or may bear no
interest, and may be redeemable or repayable at such Redemption Price or Prices
or Repayment Price or Prices, as the case may be, whether at the option of the
Holder or otherwise, and upon such terms, all as shall be provided for in or
pursuant to the Board Resolution or in or pursuant to the supplemental indenture
creating that series. There may also be established in or pursuant to a Board
Resolution or in or pursuant to a supplemental indenture prior to the issuance
of Securities of each such series, provision for:

            (1) the exchange or conversion of the Securities of that series, at
      the option of the Holders thereof, for or into new Securities of a
      different series or other securities or other property of the Company, the
      Guarantor or another Person, including shares of common stock, preferred
      stock, indebtedness or securities of any kind of the Company, the
      Guarantor, any Subsidiary of the Company or of the Guarantor or of any
      other Person or securities directly or indirectly convertible

                                                                              37


      into or exchangeable for any such securities;

            (2) a sinking or purchase fund or other analogous obligation;

            (3) if other than U.S. dollars, the currency or currencies or units
      based on or related to currencies (including European Currency Units) in
      which the Securities of such series shall be denominated and in which
      payments of principal of, and any premium and interest on, such Securities
      shall or may be payable;

            (4) if the principal of (and premium, if any) or interest, if any,
      on the Securities of such series are to be payable, at the election of the
      Company or a holder thereof, in a currency or currencies or units based on
      or related to currencies (including European Currency Units) other than
      that in which the Securities are stated to be payable, the period or
      periods within which, and the terms and conditions upon which, such
      election may be made;

            (5) if the amount of payments of principal of (and premium, if any)
      or interest, if any, on the Securities of such series may be determined
      with reference to an index based on (i) a currency or currencies or units
      based on or related to currencies (including European Currency Units)
      other than that in which the Securities are stated to be payable, (ii)
      changes in the price of one or more other securities or groups or indexes
      of securities or (iii) changes in the prices of one or more commodities or
      groups or indexes of commodities, or any combination of the foregoing, the
      manner in which such amounts shall be determined;

            (6) if the aggregate principal amount of the Securities of that
      series is to be limited, such limitations, and the maturity date of the
      principal amount of the Securities of that series (which may be fixed or
      extendible), and the rate or rates (which may be fixed or floating) per
      annum at which the Securities of such series will bear interest, if any,
      or the

                                                                              38


      method of determining such rate or rates and the payment dates and record
      dates relating to interest payments;

            (7) the exchange of Securities of that series, at the option of the
      Holders thereof, for other Securities of the same series of the same
      aggregate principal amount of a different authorized kind or different
      authorized denomination or denominations, or both;

            (8) the appointment by the Trustee of an Authenticating Agent in one
      or more places other than the location of the office of the Trustee with
      power to act on behalf of the Trustee and subject to its direction in the
      authentication and delivery of the Securities of any one or more series in
      connection with such transactions as shall be specified in the provisions
      of this Indenture or in or pursuant to the Board Resolution or the
      supplemental indenture creating such series;

            (9) the percentage of their principal amount of which such
      Securities will be issued and the portion of the principal amount of
      Securities of the series, if other than the total principal amount
      thereof, which shall be payable upon declaration of acceleration of the
      Maturity thereof pursuant to Section 502 or provable in bankruptcy
      pursuant to Section 504;

            (10) any Event of Default with respect to the Securities of such
      series, if not set forth herein and any additions, deletions or other
      changes to the Events of Default set forth herein that shall be applicable
      to the Securities of such series (including a provision making any Event
      of Default set forth herein inapplicable to the Securities of that
      series);

            (11) any covenant solely for the benefit of the Securities of such
      series and any additions, deletions or other changes to the provisions of
      Article Ten or any definitions relating to such Article that shall be
      applicable to the Securities of such series (including a provision making
      any Section of such Article inapplicable to the Securities of such
      series);

                                                                              39


            (12) the applicability of Section 402(b) of this Indenture to the
      Securities of such series;

            (13) if the Securities of the series shall be issued in whole or in
      part in the form of a Global Security or Global Securities, the terms and
      conditions, if any, upon which such Global Security or Global Securities
      may be exchanged in whole or in part for other individual Securities; and
      the Depositary for such Global Security or Global Securities (if other
      than the Depositary specified in Section 101 hereof);

            (14) the subordination of the Securities of such series to any other
      indebtedness of the Company and the Guarantor, including without
      limitation, the Securities of any other series;

            (15) if the Securities of the series are to be deposited as trust
      assets in a Fund American Trust, the name of the applicable Fund American
      Trust (which shall distinguish such statutory business trust from all
      other Fund American Trusts) into which the Securities of the series are to
      be deposited as trust assets and the date of its Declaration of Trust;

            (16) if the Securities of the series are to have an interest
      deferral feature, the terms relating to such interest deferral feature;
      and

            (17) any other terms of the series, which shall not be inconsistent
      with the provisions of this Indenture;

all upon such terms as may be determined in or pursuant to a Board Resolution or
in or pursuant to a supplemental indenture with respect to such series. All
Securities of the same series shall be substantially identical in tenor and
effect, except as to denomination.

            The form of the Securities of each series shall be established
pursuant to the provisions of this Indenture in or pursuant to the Board
Resolution or in or pursuant to the supplemental indenture creating such series.
The Securities

                                                                              40


of each series shall be distinguished from the Securities of each other series
in such manner, reasonably satisfactory to the Trustee, as the Board of
Directors may determine.

            Unless otherwise provided with respect to Securities of a particular
series, the Securities of any series may only be issuable in registered form,
without coupons.

            Any terms or provisions in respect of the Securities of any series
issued under this Indenture may be determined pursuant to this Section by
providing in a Board Resolution or supplemental indenture for the method by
which such terms or provisions shall be determined.

            Section 302. DENOMINATIONS. The Securities of each series shall be
issuable in such denominations and currency as shall be provided in the
provisions of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such series. In the absence of any such
provisions with respect to the Securities of any series, the Securities of that
series shall be issuable only in fully registered form in denominations of $25
and any integral multiple thereof.

            Section 303. EXECUTION, AUTHENTICATION AND DELIVERY AND DATING. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President, one of its Vice Presidents or its Treasurer. 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; and the Trustee shall, upon Company Order,
authenticate and make available for delivery such

                                                                              41


Securities as in this Indenture provided and not otherwise.

            Prior to any such authentication and delivery, the Trustee shall be
entitled to receive, in addition to any Officers' Certificate and Opinion of
Counsel required to be furnished to the Trustee pursuant to Section 102, and the
Board Resolution and any certificate relating to the issuance of the series of
Securities required to be furnished pursuant to Section 202, an Opinion of
Counsel stating that:

            (1) all instruments furnished to the Trustee conform to the
      requirements of the Indenture and constitute sufficient authority
      hereunder for the Trustee to authenticate and deliver such Securities;

            (2) the form and terms (or in connection with the issuance of
      medium-term Securities under Section 311, the manner of determining the
      terms) of such Securities have been established in conformity with the
      provisions of this Indenture;

            (3) all laws and requirements with respect to the execution and
      delivery by the Company of such Securities have been complied with, the
      Company has the corporate power to issue such Securities and such
      Securities have been duly authorized and delivered by the Company and,
      assuming due authentication and delivery by the Trustee, constitute legal,
      valid and binding obligations of the Company enforceable in accordance
      with their terms (subject, as to enforcement of remedies, to applicable
      bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium
      or other laws and legal principles affecting creditors' rights generally
      from time to time in effect and to general equitable principles, whether
      applied in an action at law or in equity) and entitled to the benefits of
      this Indenture, equally and ratably with all other Securities, if any, of
      such series Outstanding; and

            (4) such other matters as the Trustee may reasonably request;

                                                                              42


and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental hereto, also stating that all laws and
requirements with respect to the form and execution by the Company of the
supplemental indenture with respect to that series of Securities have been
complied with, the Company has corporate power to execute and deliver any such
supplemental indenture and has taken all necessary corporate action for those
purposes and any such supplemental indenture has been executed and delivered and
constitutes the legal, valid and binding obligation of the Company enforceable
in accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other laws and legal principles affecting creditors' rights
generally from time to time in effect and to general equitable principles,
whether applied in an action at law or in equity).

            The Trustee shall not be required to authenticate such Securities if
the issue thereof will adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture.

            Unless otherwise provided in the form of Security for any series,
all Securities shall be dated the date of their 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 manual signature of an authorized signatory, 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 receipt
of the documents required by Section 303, together with a Company Order, the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination,

                                                                              43


substantially of the tenor of the definitive Securities 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
of such series shall be exchangeable for definitive Securities of such series
upon surrender of the temporary Securities of such series at the office or
agency of the Company in a Place of Payment, without charge to the Holder; and
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 such series of
authorized denominations and of like tenor and terms. Until so exchanged the
temporary Securities of such series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series.

            Section 305. REGISTRATION, TRANSFER AND EXCHANGE. The Company shall
keep or cause to be kept a register (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, or of
Securities of a particular series, and for transfers of Securities or of
Securities of such series. Any such register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time. At all reasonable times the information contained in such register or
registers shall be available for inspection by the Trustee at the office or
agency to be maintained by the Company as provided in Section 1002.

            Subject to Section 204, upon surrender for transfer of any Security
of any series at the office or agency of the Company in a Place of Payment, the
Company shall execute, and the Trustee shall authenticate and make

                                                                              44


available for delivery, in the name of the designated transferee or transferees,
one or more new Securities of such series of any authorized denominations, of a
like aggregate principal amount and Stated Maturity and of like tenor and terms.

            Subject to Section 204, at the option of the Holder, Securities of
any series may be exchanged for other Securities of such series of any
authorized denominations, of a like aggregate principal amount and Stated
Maturity and of like tenor and 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
make available for delivery, the Securities which the Securityholder 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 and the Guarantor, 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 Trustee) 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.

            Unless otherwise provided in the Security to be transferred or
exchanged, no service charge shall be made on any Securityholder for any
transfer or exchange of Securities, but the Company may (unless otherwise
provided in such Security) require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any transfer
or exchange of Securities, other than exchanges pursuant to Section 304 or 906
not involving any transfer.

            The Company shall not be required (i) 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 the mailing of a notice of redemption of Securities of
such series selected for redemption under

                                                                              45


Section 1103 and ending at the close of business on the date of such mailing, or
(ii) to transfer or exchange any Security so selected for redemption in whole or
in part, except for the portion of such Security not so selected for redemption.

            None of the Company, the Guarantor, the Trustee, any agent of the
Trustee, any Paying Agent or the Security Registrar 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 for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.

            The Company initially appoints the Trustee to act as Security
Registrar for the Securities on its behalf. The Company may at any time and from
time to time authorize any Person to act as Security Registrar in place of the
Trustee with respect to any series of Securities issued under this Indenture.

            Section 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If
(i) any mutilated Security is surrendered to the Trustee, or the Company, the
Guarantor and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and (ii) there is delivered to the
Company, the Guarantor and the Trustee 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, the Guarantor or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Security, a new Security of
like tenor, series, Stated Maturity and principal amount, 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.

                                                                              46


            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 and the Guarantor, 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 of the same series 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. Unless
otherwise provided with respect to such Security pursuant to Section 301,
interest on any Security 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.

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

            (1) The Company or the Guarantor may elect to make payment of any
      Defaulted Interest to the Persons in whose names any such Securities (or
      their respective Predecessor Securities) are registered at the close of

                                                                              47


      business on a Special Record Date for the payment of such Defaulted
      Interest, which shall be fixed in the following manner. The Company or the
      Guarantor, as the case may be, shall notify the Trustee in writing of the
      amount of Defaulted Interest proposed to be paid on each such Security and
      the date of the proposed payment, and at the same time the Company or the
      Guarantor, as the case may be, 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 nor less than 10 days prior to
      the date of the proposed payment and not less than 10 days after the
      receipt by the Trustee of the notice of the proposed payment. The Trustee
      shall promptly notify the Company or the Guarantor, as the case may be, of
      such Special Record Date and, in the name and at the expense of the
      Company or the Guarantor, 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 the Holder of each such Security at his
      address 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 mailed
      as aforesaid, such Defaulted Interest shall be paid to the Persons in
      whose names such Securities (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 or the Guarantor may make payment of any Defaulted
      Interest in any other lawful manner not inconsistent with the requirements
      of any securities exchange on which such Securities may be

                                                                              48


      listed, and upon such notice as may be required by such exchange, if,
      after notice given by the Company or the Guarantor, as the case may be, to
      the Trustee of the proposed payment pursuant to this Clause, such manner
      of payment shall be deemed practicable by the Trustee.

            If any installment of interest the Stated Maturity of which is on or
prior to the Redemption Date for any Security called for redemption pursuant to
Article Eleven is not paid or duly provided for on or prior to the Redemption
Date in accordance with the foregoing provisions of this Section, such interest
shall be payable as part of the Redemption Price of such Securities.

            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 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 Guarantor, the
Trustee and any agent of the Company, the Guarantor or the Trustee may treat the
Person in whose name any Security is registered in the Security Register as the
owner of such Security for the purpose of receiving payment of principal of (and
premium, if any), 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 Guarantor, the Trustee nor any agent of the Company,
the Guarantor or the Trustee shall be affected by notice to the contrary.

            Section 309. CANCELLATION. All Securities surrendered for payment,
redemption, transfer, conversion or exchange or credit against a sinking fund
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and, if not already canceled, shall be promptly canceled by it. The
Company or the Guarantor may at any time deliver to the Trustee for cancellation
any Securities previously authenticated and delivered hereunder which the
Company or the Guarantor may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee. No Security
shall be authenticated in lieu of or in exchange for any Securities

                                                                              49


canceled as provided in this Section, except as expressly permitted by this
Indenture. The Trustee shall return all canceled Securities to the Company.

            Section 310. COMPUTATION OF INTEREST. Unless otherwise provided as
contemplated in Section 301, interest on the Securities shall be calculated on
the basis of a 360-day year of twelve 30-day months.

            Section 311. MEDIUM-TERM SECURITIES. Notwithstanding any contrary
provision herein, if all Securities of a series are not to be originally issued
at one time, it shall not be necessary for the Company to deliver to the Trustee
an Officers' Certificate, Board Resolution, supplemental indenture, Opinion of
Counsel or Company Request otherwise required pursuant to Sections 202, 301 and
303 at or prior to the time of authentication of each Security of such series if
such documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first Security of such series to be
issued; provided that any subsequent request by the Company to the Trustee to
authenticate Securities of such series upon original issuance shall constitute a
representation and warranty by the Company that as of the date of such request,
the statements made in the Officers' Certificate delivered pursuant to Section
102 shall be true and correct as if made on such date.

            An Officers' Certificate, supplemental indenture or Board Resolution
delivered by the Company to the Trustee in the circumstances set forth in the
preceding paragraph may provide that Securities which are the subject thereof
will be authenticated and delivered by the Trustee or its agent on original
issue from time to time upon the telephonic or written order of persons
designated in such Officers' Certificate, Board Resolution or supplemental
indenture (any such telephonic instructions to be confirmed promptly in writing
by such persons) and that such persons are authorized to determine, consistent
with such Officers' Certificate, supplemental indenture or Board Resolution,
such terms and conditions of said Securities as are specified in such Officers'
Certificate, supplemental

                                                                              50


indenture or Board Resolution.

            Section 312. 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 of any change in the "CUSIP" numbers.

            Section 313. GLOBAL SECURITIES. (a) Each Global Security
authenticated under this Indenture shall be registered in the name of the
Depositary designated by the Company for such Global Security or a nominee
thereof and delivered to such Depository or a nominee thereof or custodian
therefor, and each such Global Security shall constitute a single Security for
all purposes of this Indenture.

            (b) Notwithstanding any other provision of this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary (A) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be a clearing agency registered as such under the Exchange Act or
announces an intention permanently to cease business or does in fact do so or
(ii) there shall have occurred and be continuing an Event of Default with
respect to such Global Security.

            (c) If any Global Security is to be exchanged for other Securities
or canceled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee

                                                                              51


to the Trustee, as Security Registrar, for exchange or cancellation, as provided
in this Article Three. If any Global Security is to be exchanged for other
Securities or canceled in part, or if another Security is to be exchanged in
whole or in part for a beneficial interest in any Global Security, in each case,
as provided in Section 305, then either (i) such Global Security shall be so
surrendered for exchange or cancellation, as provided in this Article Three or
(ii) the principal amount thereof shall be reduced or increased by an amount
equal to the portion thereof to be so exchanged or canceled, or equal to the
principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, by means of an appropriate adjustment made
on the records of the Trustee, as Security Registrar, whereupon the Trustee in
accordance with the Applicable Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender or adjustment of a Global Security, the Trustee shall,
subject to Section 305 and as otherwise provided in this Article Three,
authenticate and deliver any Securities issuable in exchange for such Global
Security (or any portion thereof) to or upon the order of, and registered in
such names as may be directed by, the Depositary or its authorized
representative. Upon the request of the Trustee in connection with the
occurrence of any of the events specified in the preceding paragraph, the
Company shall promptly make available to the Trustee a reasonable supply of
Securities that are not in the form of Global Securities. The Trustee shall be
entitled to rely upon any order, direction or request of the Depositary or its
authorized representative which is given or made pursuant to this Article Three
if such order, direction or request is given or made in accordance with the
Applicable Procedures.

            (d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article Three or otherwise, shall be
authenticated and delivered in the form of, and shall be, a registered Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof, in which case such
Registered Security shall be authenticated and delivered in definitive, fully
registered form, without

                                                                              52


interest coupons.

            (e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
Indenture and the Registered Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members and
such owners of beneficial interests in a Global Security will not be considered
the owners of holders thereof.

            Section 314. DEFERRALS OF INTEREST PAYMENT DATES. If the Securities
of a particular series are to be deposited as trust assets in a Fund American
Trust and as specified by Section 301 with respect to the Securities of such
series, provided that no Event of Default has occurred and is continuing with
respect to such Securities, the Company shall have the right, at any time or
from time to time during the term of such series, to defer the payment of
interest on such Securities for such period or periods as may be specified as
contemplated by Section 301 (each, an "Extension Period") during which Extension
Periods the Company shall have the right to make partial payments of interest on
any Interest Payment Date. No Extension Period shall end on a date other than an
Interest Payment Date. At the end of any such Extension Period the Company shall
pay all interest then accrued and unpaid on the Securities (together with
interest thereon accrued in a manner to be specified in Section 301 compounded
in a manner to be specified in Section 301 from the relevant Interest Payment
Date, to the extent permitted by applicable law), provided, however, that no
Extension Period may extend beyond the Stated Maturity of such Securities.
During an Extension Period, interest will continue to accrue and Holders of the
Securities will be required to accrue interest income for U.S. Federal income
tax purposes. During any such Extension Period, the Company shall not (i)
declare or pay dividends or distributions on, or redeem, purchase, acquire or
make a

                                                                              53


liquidation payment with respect to, any of the Company's capital stock (which
includes the Common Stock and the Preferred Stock), or (ii) make any payment of
principal, interest, or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company (including other Securities) that rank pari passu
with or junior in interest to the Securities of such series or (iii) make any
guarantee payments with respect to any guarantee by the Company of the debt
securities of any Subsidiary of the Company if such guarantee ranks pari passu
with or junior in interest to the Securities of such series (other than (a)
dividends or distributions in Common Stock, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
applicable Fund American Trust Guarantee, (d) purchases or acquisitions of
shares of the Common Stock in connection with the satisfaction by the Company of
its obligations under any employee benefit plan or other contractual obligation
of the Company (other than a contractual obligation ranking pari passu with or
junior to these Securities), (e) as a result of a reclassification of the
Company's capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's capital
stock, or (f) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged). Prior to the termination of
any such Extension Period, the Company may further extend such Extension Period;
PROVIDED, HOWEVER, that no Extension Period shall exceed the specified number of
specified consecutive periods or extend beyond the Stated Maturity of such
Securities. Upon termination of any Extension Period and upon the payment of all
accrued and unpaid interest then due on any Interest Payment Date, and subject
to the foregoing limitations, the Company may elect to begin a new Extension
Period. No interest shall be due and payable during an Extension Period, except
at the end thereof. The Company shall give the Holders and the Trustee notice of
its election to begin any such Extension Period (or an extension thereof) at
least three Business Days prior to the Interest Payment Date or, with respect to
the Securities of a series issued to a Fund American Trust, prior to the earlier
of (i)

                                                                              54


the date the distributions on the Common Securities and the Preferred Securities
of such Fund American Trust would have been payable except for the election to
begin or extend such Extension Period or (ii) the date the regular trustees of
such Fund American Trust are required to give notice to any automated quotation
system or to holders of the Common Securities and the Preferred Securities of
the record date or the date such distributions are payable, but in any event not
less than three Business Days prior to such record date. There is no limitation
on the number of times that the Company may elect to begin an Extension Period.

                                  ARTICLE FOUR

              SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE;
                                UNCLAIMED MONEYS

            Section 401. APPLICABILITY OF ARTICLE. If, pursuant to Section 301,
provision is made for the defeasance of Securities of a series and if the
Securities of such series are denominated and payable only in U.S. dollars
(except as provided pursuant to Section 301), then the provisions of this
Article Four relating to defeasance of Securities shall be applicable except as
otherwise specified pursuant to Section 301 for Securities of such series.
Defeasance provisions, if any, for Securities denominated in a currency other
than U.S. dollars may be specified pursuant to Section 301.

            Section 402. SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE.
(a) If at any time (i) the Company or the Guarantor shall have delivered to the
Trustee for cancellation all Securities of any series theretofore authenticated
and delivered (other than (1) any Securities of such series which shall have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 306 and (2) Securities for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company or the
Guarantor as provided in Section 405) or (ii) all Securities of such series not
theretofore delivered to the Trustee for cancellation shall

                                                                              55


have become due and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption,
and the Company shall deposit with the Trustee as trust funds the entire amount
in the currency in which such Securities are denominated (except as otherwise
provided pursuant to Section 301) sufficient (in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee) without consideration of any
reinvestment and after payment of all taxes or other charges and assessments in
respect thereof payable by the Trustee, to pay at maturity or upon redemption
all Securities of such series not theretofore delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due on such date of maturity or redemption date, as the case may be, no
default with respect to the Securities has occurred and is continuing on the
date of such deposit, such deposit does not result in a breach or violation of,
or constitute a default under, the Indenture or any other agreement or
instrument to which the Company of the Guarantor is a party and the Company
delivers an Officers' Certificate and an Opinion of Counsel each stating that
such conditions have been complied with and if in either case the Company or the
Guarantor shall also pay or cause to be paid all other sums payable hereunder by
the Company or the Guarantor, then this Indenture shall cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of such Securities herein expressly provided for and rights to receive
payments of principal of, and premium, if any, and interest on, such Securities)
with respect to the Securities of such series, and the Trustee, on demand of the
Company or the Guarantor, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture.

            (b) Subject to Sections 402(c), 403 and 407, the Company at any time
may terminate, with respect to Securities of a particular series, (i) all of the
Company's and the Guarantor's obligations under the Securities of such series
and this Indenture with respect to the Securities of such series ("legal
defeasance option") or (ii) the Company's and the Guarantor's obligations under
any covenants specified pursuant to Section 301 applicable to

                                                                              56


the Securities of such Series ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.

            If the Company exercises its legal defeasance option, payment of the
Securities of the defeased series may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default related to the
specified covenants.

            Upon satisfaction of the conditions set forth herein and upon
request of the Company or the Guarantor, the Trustee shall acknowledge in
writing the discharge of those obligations that the Company terminates.

            (c) Notwithstanding clause (a) above and the exercise of the legal
defeasance option in clause (b) above, the Company's and the Guarantor's
obligations in Sections 305, 306, 405, 406, 407, 607, 608, 701 and 1002 shall
survive until the Securities of the defeased series have been paid in full.
Thereafter, the Company's and the Guarantor's obligations in Sections 607, 405
and 406 shall survive.

            Section 403. CONDITIONS OF DEFEASANCE. The Company may exercise the
legal defeasance option or the covenant defeasance option with respect to
Securities of a particular series only if:

            (1) the Company or the Guarantor irrevocably deposits in trust with
      the Trustee money or U.S. Government Obligations for the payment of
      principal of, and premium, if any, and interest on, the Securities of such
      series to maturity or redemption, as the case may be;

            (2) the Company or the Guarantor delivers to the Trustee a
      certificate from a nationally recognized firm of independent public
      accountants expressing their opinion that the payments of principal and
      interest when due and without reinvestment on the deposited U.S.

                                                                              57


      Government Obligations plus any deposited money without investment will
      provide cash at such times and in such amounts as will be sufficient to
      pay the principal, premium, if any, and interest when due on all the
      Securities of such series to maturity or redemption, as the case may be;

            (3) 91 days pass after the deposit is made and during the 91-day
      period no Default specified in Section 501(5) or (6) with respect to the
      Company occurs which is continuing at the end of the period;

            (4) no Default has occurred and is continuing on the date of such
      deposit and after giving effect thereto;

            (5) the deposit does not constitute a default under any other
      agreement binding on the Company or the Guarantor;

            (6) the Company or the Guarantor delivers to the Trustee an Opinion
      of Counsel to the effect that the trust resulting from the deposit does
      not constitute, or is qualified as, a regulated investment company under
      the Investment Company Act of 1940;

            (7) in the event of the legal defeasance option, the Company or the
      Guarantor shall have delivered to the Trustee an Opinion of Counsel
      stating that (i) the Company has received from the Internal Revenue
      Service a ruling, or (ii) since the date of this Indenture there has been
      a change in the applicable Federal income tax law, in either case to the
      effect that, and based thereon such Opinion of Counsel shall confirm that,
      the Holders of Securities of such series will not recognize income, gain
      or loss for Federal income tax purposes as a result of such defeasance and
      will be subject to Federal income tax on the same amounts, in the same
      manner and at the same times as would have been the case if such
      defeasance had not occurred;

            (8) in the event of the covenant defeasance option, the Company or
      the Guarantor shall have delivered to the Trustee an Opinion of Counsel to
      the effect that the Holders of Securities of such series will not
      recognize income, gain or loss for Federal

                                                                              58


      income tax purposes as a result of such covenant defeasance and will be
      subject to Federal income tax on the same amounts, in the same manner and
      at the same times as would have been the case if such covenant defeasance
      had not occurred; and

            (9) the Company or the Guarantor delivers to the Trustee an
      Officers' Certificate and an Opinion of Counsel, each stating that all
      conditions precedent to the defeasance and discharge of the Securities of
      such series as contemplated by this Article Four have been complied with.

            Before or after a deposit, the Company or the Guarantor may make
arrangements satisfactory to the Trustee for the redemption of Securities of
such series at a future date in accordance with Article Eleven.

            Section 404. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article Four. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Securities of the defeased series.

            Section 405. REPAYMENT TO COMPANY OR GUARANTOR. The Trustee and any
paying agent shall promptly turn over to the Company or the Guarantor upon
request any excess money or securities held by them at any time.

            Subject to any applicable abandoned property law, the Trustee and
any paying agent shall pay to the Company or the Guarantor upon request any
money held by them for the payment of principal, premium or interest that
remains unclaimed for two years, and, thereafter, Holders entitled to such money
must look to the Company or the Guarantor for payment as general creditors and
all liability of the Trustee or such paying agent with respect to such money
shall thereupon cease.

            Section 406. INDEMNITY FOR U.S. GOVERNMENT

                                                                              59


OBLIGATIONS. The Company and the Guarantor (without duplication) shall pay and
shall indemnify the Trustee and the Holders against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.

            Section 407. REINSTATEMENT. If the Trustee or any paying agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article Four by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's and the Guarantor's
obligations under this Indenture and the Securities of the defeased series shall
be revived and reinstated as though no deposit had occurred pursuant to this
Article Four until such time as the Trustee or any paying agent is permitted to
apply all such money or U.S. Government Obligations in accordance with this
Article Four.

                                  ARTICLE FIVE

                                    REMEDIES

            Section 501. EVENTS OF DEFAULT. "Event of Default", wherever used
herein, means with respect to any series of Securities 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), unless such event is either inapplicable
to a particular series or it is specifically deleted or modified in the
supplemental indenture creating such series of Securities or in the form of
Security for such series:

            (1) default in the payment of any interest upon any Security of that
      series when it becomes due and payable, and continuance of such default
      for a period of 90 days (subject to the deferral of any due date in the
      case of an Extension Period); or

                                                                              60


            (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 payment of any sinking or purchase fund or
      analogous obligation when the same becomes due by the terms of the
      Securities of such series; or

            (4) default in the performance, or breach, of any covenant or
      warranty of the Company or the Guarantor in this Indenture in respect of
      the Securities of such series (other than a covenant or warranty in
      respect of the Securities of such series a default in the performance of
      which or the breach of which is elsewhere in this Section specifically
      dealt with), all of such covenants and warranties in the Indenture which
      are not expressly stated to be for the benefit of a particular series of
      Securities being deemed in respect of the Securities of all series for
      this purpose, 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 and the Guarantor by the Trustee or to the Company, the Guarantor
      and the Trustee by the Holders of at least 25% in principal amount of the
      Outstanding Securities of such 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

            (5) with respect to any series of Securities issued or guaranteed
       by the Guarantor, the Guarantor's consolidation or amalgamation with
       or merger into any other Person or conveyance or transfer of its
       properties and assets substantially as an entirety to any Person,
       unless:

                  (A) the Person formed by such consolidation or amalgamation
       or into which the Guarantor is merged or the Person which acquires by
       conveyance or transfer the properties and assets of the Guarantor
       substantially as an entirety shall be a corporation or limited
       liability company organized and existing under the laws of the United
       States of America, any State thereof, the District of Columbia or
       Bermuda, and shall expressly assume, by an indenture supplemental
       hereto, executed by the successor Person and the Company 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 on all the Securities and the performance of every covenant
       of this Indenture on the part of the Guarantor to be performed or
       observed;

                  (B) 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

                  (C) either the Guarantor or the successor Person has
       delivered to the Trustee an Officers' Certificate and an Opinion of
       Counsel each stating that such consolidation, amalgamation, merger,
       conveyance or transfer and such supplemental indenture comply with
       this Article and that all conditions precedent herein provided for
       relating to such transaction have been complied with,

and continuance of any failure to comply with the conditions set forth under
items (A), (B) or (C) of this paragraph (5) for a period of 90 days after there
has been given, by registered or certified mail, to the Guarantor by the Trustee
or to the Guarantor and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of such series, a written notice specifying
such failure to comply and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or

            (6) the entry of an order for relief against the Company or the
      Guarantor under the Federal Bankruptcy Code by a court having jurisdiction
      in the premises or a decree or order by a court having jurisdiction in the
      premises adjudging the Company or the Guarantor a bankrupt or insolvent
      under any other applicable Federal, State or foreign law, or the entry of
      a decree or order approving as properly filed a petition seeking
      reorganization, arrangement, adjustment or composition of or in respect of
      the Company under the Federal Bankruptcy Code or any other applicable
      Federal, State or foreign law (other than a reorganization under a


                                                                              61


      foreign law that does not relate to insolvency), or appointing a receiver,
      liquidator, assignee, trustee, sequestrator (or other similar official) of
      the Company or the Guarantor 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

            (7) the consent by the Company or the Guarantor 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 the
      Federal Bankruptcy Code or any other applicable Federal, State or foreign
      law (other than a reorganization under a foreign law that does not relate
      to insolvency), 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 the Guarantor
      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, or the
      taking of corporate action by the Company or the Guarantor in furtherance
      of any such action; or

            (8) any other Event of Default provided in the supplemental
      indenture under which such series of Securities is issued or in the form
      of Security for such series.

            Section 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default described in paragraph (1), (2), (3), (4), (5) or (8)
(if the Event of Default under paragraph (4), (5) or (8) is with respect to
less than all series of Securities then Outstanding) of Section 501 occurs
and is continuing with respect to any series, then and in each and every such
case, unless the principal of all the Securities of such series shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Securities of such


                                                                              62


series then Outstanding hereunder (each such series acting as a separate
class), by notice in writing to the Company and the Guarantor (and to the
Trustee if given by Holders), may declare the principal amount (or, if the
Securities of such 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 such series then Outstanding and all accrued
interest thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Securities of such series contained to
the contrary notwithstanding. If an Event of Default described in paragraph
(4), (5) or (8) (if the Event of Default under paragraph (4), (5) or (8) is
with respect to all series of Securities then Outstanding), or (6) or (7) of
Section 501 occurs and is continuing, then and in each and every such case,
unless the principal of all the Securities shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of all the Securities then Outstanding hereunder (treated as
one class), by notice in writing to the Company and the Guarantor (and to the
Trustee if given by Holders), may declare the principal amount (or, if any
Securities are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms thereof) of all the
Securities then Outstanding and all accrued interest thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the
Securities contained to the contrary notwithstanding.

            At any time after such a declaration of acceleration has been made
with respect to the Securities of any series 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 such series (subject to, in the case of any series of
Securities held as trust assets of a Fund American Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of the
holders of the Preferred Securities and the Common Securities of such Fund
American Trust as may be required under the Declaration of Trust of such Fund
American Trust), by written notice to the

                                                                              63


Company and the Trustee, may rescind and annul such declaration and its
consequences if

            (1) the Company or the Guarantor has paid or deposited with the
      Trustee a sum sufficient to pay

                  (A) all overdue installments of interest on the Securities of
            such series,

                  (B) the principal of (and premium, if any, on) any Securities
            of such series which have become due otherwise than by such
            declaration of acceleration, and interest thereon at the rate or
            rates prescribed therefor by the terms of the Securities of such
            series, to the extent that payment of such interest is lawful,

                  (C) interest upon overdue installments of interest at the rate
            or rates prescribed therefor by the terms of the Securities of such
            series to the extent that payment of such interest is lawful, 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 all other amounts due the
            Trustee under Section 607;

                  and

            (2) all Events of Default with respect to such series of Securities,
      other than the nonpayment of the principal of the Securities of such
      series which have 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.

            Section 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Company and the Guarantor

                                                                              64


each covenants that if

            (1) default is made in the payment of any installment of interest on
      any Security of any series when such interest becomes due and payable, or

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

            (3) default is made in the payment of any sinking or purchase fund
      or analogous obligation when the same becomes due by the terms of the
      Securities of any series,

and any such default continues for any period of grace provided with respect to
the Securities of such series, the Company or the Guarantor, as the case may be,
will, upon demand of the Trustee, pay to it, for the benefit of the Holder of
any such Security (or the Holders of any such series in the case of Clause (3)
above), the whole amount then due and payable on any such Security (or on the
Securities of any such series in the case of Clause (3) above) for principal
(and premium, if any) and interest, with interest, to the extent that payment of
such interest shall be legally enforceable, upon the overdue principal (and
premium, if any) and upon overdue installments of interest, at such rate or
rates as may be prescribed therefor by the terms of any such Security (or of
Securities of any such series in the case of Clause (3) above); and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and all other
amounts due the Trustee under Section 607.

            If the Company or the Guarantor 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 the Guarantor or any other obligor
upon the Securities of such series and collect the money adjudged or decreed to
be payable in the manner provided by law out of the property of

                                                                              65


the Company or the Guarantor or any other obligor upon such Securities, wherever
situated.

            If an Event of Default with respect to any series of Securities
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, the Guarantor or any other obligor upon the
Securities or the property of the Company, the Guarantor or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Securities 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 or the Guarantor for the payment of overdue principal
or interest) shall be entitled and empowered, by intervention in such
proceedings or otherwise,

            (i) to file and prove a claim for the whole amount of principal (and
      premium, if any) and interest owing and unpaid in respect of the
      Securities and to file such other papers or documents as may be necessary
      and advisable in order to have the claims of the Trustee (including any
      claim for the reasonable compensation, expenses, disbursements and
      advances of the Trustee, its agents and counsel and all other amounts due
      the Trustee under Section 607) and of the Securityholders allowed in such
      judicial proceeding, and

            (ii) to collect and receive any moneys or other property payable or
      deliverable on any such claims and to distribute the same;

                                                                              66


and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee 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 Securityholder any
plan or 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 Securityholder in any such proceeding.

            Section 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES. All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities of such series 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 reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, be for the ratable benefit of the Holders of the Securities of the
series in respect of which such judgment has been recovered.

            Section 506. APPLICATION OF MONEY COLLECTED. Any money collected 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 on account of principal
(or premium, if any) or interest, upon presentation of the Securities of such
series and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:

                                                                              67


            FIRST: To the payment of all amounts due the Trustee under Section
      607.

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

            THIRD: To the Company or the Guarantor or both, as they are
      entitled.

            Section 507. LIMITATION ON SUITS. No Holder of any Security 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 Securities of such
      series;

            (2) the Holders of not less than 25% in principal amount of the
      Outstanding Securities of such 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-

                                                                              68


      day period by the Holders of a majority in principal amount of the
      Outstanding Securities of such series (subject to, in the case of any
      series of Securities held as trust assets of a Fund American Trust and
      with respect to which a Security Exchange has not theretofore occurred,
      such consent of the holders of the Preferred Securities and the Common
      Securities of such Fund American Trust as may be required under the
      Declaration of Trust of such Fund American Trust);

it being understood and intended that no one or more Holders of Securities of
such series 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 of such series, or to obtain or to
seek to obtain priority or preference over any other such Holders or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal and proportionate benefit of all the Holders of all Securities of such
series.

            The Company expressly acknowledges that if, prior to a Security
Exchange with respect to the Securities of any series, a Default with respect to
the Securities of such series shall have occurred, under the circumstances set
forth in the applicable Declaration of Trust, any holder of Preferred Securities
of the applicable Fund American Trust may, to the extent permitted by applicable
law, enforce directly against the Company the applicable Property Trustee's
rights hereunder. In furtherance of the foregoing and for the avoidance of any
doubt, the Company acknowledges that, under the circumstances described in the
applicable Declaration of Trust, any such holder of Preferred Securities, in its
own name, in the name of the applicable Fund American Trust or in the name of
the holders of the Preferred Securities issued by such Fund American Trust, may
institute or cause to be instituted a proceeding, including, without limitation,
any suit in equity, an action at law or other judicial or administrative
proceeding, to enforce the applicable Property Trustee's rights hereunder
directly against the Company as issuer of the applicable series of Securities,
and may prosecute such proceeding to judgment or final decree, and enforce the
same against the Company.

            Section 508. UNCONDITIONAL RIGHT OF

                                                                              69


SECURITYHOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST. Notwithstanding any
other provisions 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 or repayment, on the Redemption Date or Repayment Date, as the
case may be) and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.

            Section 509. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or
any Securityholder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, then and in every such case the Company, the Trustee, the Guarantor
and the Securityholders 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 Securityholders shall
continue as though no such proceeding had been instituted.

            Section 510. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon or reserved to the Trustee or to the Securityholders 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 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

                                                                              70


Article or by law to the Trustee or to the Securityholders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Securityholders, as the case may be.

            Section 512. CONTROL BY SECURITYHOLDERS. The Holders of a majority
in principal amount of the Outstanding Securities of any series (subject to, in
the case of any series of Securities held as trust assets of a Fund American
Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of the holders of the Preferred Securities and the Common
Securities of such Fund American Trust as may be required under the Declaration
of Trust of such Fund American Trust) 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) the Trustee shall have the right to decline to follow any such
      direction if the Trustee, being advised by counsel, determines that the
      action so directed may not lawfully be taken or would conflict with this
      Indenture or if the Trustee in good faith shall, by a Responsible Officer,
      determine that the proceedings so directed would involve it in personal
      liability or be unjustly prejudicial to the Holders not taking part in
      such direction, 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 principal amount of the Outstanding Securities of any series
(subject to, in the case of any series of Securities held as trust assets of a
Fund American Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of the holders of the Preferred Securities
and the Common Securities of such Fund American Trust as may be required under
the Declaration of Trust of such Fund American Trust) 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 not

                                                                              71


theretofore cured

            (1) in the payment of the principal of (or premium, if any) or
      interest on any Security of such series, or in the payment of any sinking
      or purchase fund or analogous obligation with respect to the Securities 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.

            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 Securityholder, or
group of Securityholders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series to which the suit relates, or
to any suit instituted by any Securityholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Security on or after
the respective Stated Maturities expressed in such Security (or, in the case of
redemption or repayment, on or after the Redemption Date or Repayment

                                                                              72


Date).

            Section 515. WAIVER OF STAY OR EXTENSION LAWS. The Company and the
Guarantor each 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 force, which may affect the covenants or the
performance of this Indenture; and the Company and the Guarantor each (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 with respect to any series of Securities,

            (1) the Trustee undertakes to perform such duties and only such
      duties as are specifically set forth in this Indenture with respect to the
      Securities of such series, 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, with
      respect to Securities of such series, 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

                                                                              73


      or not they conform to the requirements of this Indenture.

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

            (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;

            (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 the Holders of a majority in principal amount of the
      Outstanding Securities of any series 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

            (4) 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.

                                                                              74


            (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. Within 90 days after the occurrence
of any default hereunder with respect to Securities of any series, the Trustee
shall transmit by mail to all Securityholders of such series, as their names and
addresses appear in the Security 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 on any Security of such series or
in the payment of any sinking or purchase fund installment or analogous
obligation with respect to Securities 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 determine that the withholding of such
notice is in the interests of the Securityholders of such series; and provided,
further, that in the case of any default of the character specified in Section
501(4) or (5) with respect to Securities of such series no such notice to
Securityholders of such series shall be given until at least 90 days after the
occurrence thereof. For the purpose of this Section, the term "default", with
respect to Securities of any series, 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. Except as otherwise provided
in 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 other paper or document believed by it to be genuine and
      to have been signed or presented by the proper party or parties;

                                                                              75


            (b) any request or direction of the Company or the Guarantor
      mentioned herein shall be sufficiently evidenced by a Company Request or
      Company Order, or a Guarantor Request or Guarantor Order, as applicable,
      and any resolution of the Board of Directors or the Guarantor Board of
      Directors may be sufficiently evidenced by a Board Resolution or a
      Guarantor's Board Resolution, applicable;

            (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 of its selection and the
      written 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 Securityholders pursuant to this Indenture, unless
      such Securityholders 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, debenture 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 and the Guarantor, personally
      or by agent

                                                                              76


      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 certificates of
authentication, shall be taken as the statements of the Company or the
Guarantor, as applicable, 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 or the Guarantor of
Securities or the proceeds thereof.

            Section 605. MAY HOLD SECURITIES. The Trustee, any Paying Agent, the
Security Registrar or any other agent of the Company or the Guarantor, 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 or the
Guarantor with the same rights it would have if it were not Trustee, 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 otherwise agreed with the Company or the
Guarantor.

            Section 607. COMPENSATION AND REIMBURSEMENT. The Company and the
Guarantor each (without duplication) agrees

            (1) to pay to the Trustee from time to time such compensation for
      all services rendered by it hereunder

                                                                              77


      as the parties 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) 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 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 for, and to hold it harmless against,
      any loss, liability 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, 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.

            As security for the performance of the obligations of the Company
and the Guarantor under this Section the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premium, if any)
or interest on particular Securities.

            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 during the period of
time provided for therein. In determining whether the Trustee has a conflicting
interest as defined in Section 310(b) of the Trust Indenture Act with respect to
the Securities of any series, there shall be excluded for purposes of the
conflicting interest provisions of such Section 310(b) the Securities of every
other series issued under this Indenture and every series of securities issued
under any other indentures if the requirements for such exclusion set forth in
Section 310(b) of the Trust Indenture Act are met. Nothing herein shall prevent
the Trustee from

                                                                              78


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 with respect to each series of Securities,
which shall be a corporation organized and doing business under the laws of the
United States of America or of any State, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, and 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 purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee with respect to any series of 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.

            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 with respect to any series of Securities
at any time by giving written notice thereof to the Company and the Guarantor.
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.

            (c) The Trustee may be removed with respect to any series of
Securities at any time by Act of the Holders

                                                                              79


of a majority in principal amount of the Outstanding Securities of that series,
delivered to the Trustee and to the Company and the Guarantor. 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 removal, the removed
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.

            (d) If at any time:

            (1) the Trustee shall fail to comply with Section 310(b) of the
      Trust Indenture Act pursuant to Section 608(a) with respect to any series
      of Securities after written request therefor by the Company, by the
      Guarantor or by any Securityholder who has been a bona fide Holder of a
      Security of that series for at least 6 months, or

            (2) the Trustee shall cease to be eligible under Section 609 with
      respect to any series of Securities and shall fail to resign after written
      request therefor by the Company, the Guarantor or by any such
      Securityholder, or

            (3) the Trustee shall become incapable of acting with respect to any
      series of Securities, or

            (4) the Trustee 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 a Board Resolution, or the Guarantor
by a Guarantor's Board Resolution, may remove the Trustee, with respect to the
series, or in the case of Clause (4), with respect to all series, or (ii)
subject to Section 514, any Securityholder who has been a bona fide Holder of a
Security of such series for at least 6 months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee with respect
to the

                                                                              80


series, or, in the case of Clause (4), with respect to all series.

            (e) If the Trustee shall resign, be removed or become incapable of
acting with respect to any series of Securities, or if a vacancy shall occur in
the office of the Trustee with respect to any series of Securities for any
cause, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee for that series of Securities. If, within one year after such
resignation, removal or incapacity, or the occurrence of such vacancy, a
successor Trustee with respect to such series of Securities 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, the Guarantor and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to
such series and supersede the successor Trustee appointed by the Company with
respect to such series. If no successor Trustee with respect to such series
shall have been so appointed by the Company or the Securityholders of such
series and accepted appointment in the manner hereinafter provided, any
Securityholder who has been a bona fide Holder of a Security of that series for
at least 6 months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to such series.

            (f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to any series and each appointment of a
successor Trustee with respect to any series by mailing written notice of such
event by first-class mail, postage prepaid, to the Holders of Securities of that
series as their names and addresses appear in the Security Register. Each notice
shall include the name of the successor Trustee and the address of its principal
Corporate Trust Office.

            Section 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company, the

                                                                              81


Guarantor and to the predecessor Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the predecessor Trustee
shall become effective with respect to any series as to which it is resigning or
being removed as Trustee, and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the predecessor Trustee with respect to any such series; but, on
request of the Company, the Guarantor or the successor Trustee, such predecessor
Trustee shall, upon payment of its reasonable charges, if any, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the predecessor Trustee, and shall duly assign, transfer
and deliver to such successor Trustee all property and money held by such
predecessor Trustee hereunder with respect to all or any such series, subject
nevertheless to its lien, if any, provided for in Section 607. Upon request of
any such successor Trustee, the Company and the Guarantor 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.

            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
Guarantor, the predecessor Trustee and each successor Trustee with respect to
the Securities of any applicable series shall execute and deliver an indenture
supplemental hereto which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the predecessor Trustee with respect to the Securities of any series as to
which the predecessor Trustee is not being succeeded shall continue to be vested
in the predecessor Trustee, and shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the 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

                                                                              82


administered by any other such Trustee.

            No successor Trustee with respect to any series of Securities shall
accept its appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible with respect to that series 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. (a)
Subject to Subsection (b) of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company
within 3 months prior to a default, as defined in Subsection (c) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities and the
holders of other indenture securities (as defined in Subsection (c) of this
Section):

            (1) an amount equal to any and all reductions in the amount due and
      owing upon any claim as such creditor in respect of principal or interest,
      effected after the beginning of such 3-month period and valid as against
      the Company and its other creditors, except any such reduction resulting
      from the receipt or disposition of any property described in paragraph (2)

                                                                              83


      of this Subsection, or from the exercise of any right of set-off which the
      Trustee could have exercised if a petition in bankruptcy had been filed by
      or against the Company upon the date of such default; and

            (2) all property received by the Trustee in respect of any claim as
      such creditor, either as security therefor, or in satisfaction or
      composition thereof, or otherwise, after the beginning of such 3-month
      period, or an amount equal to the proceeds of any such property, if
      disposed of, subject, however, to the rights, if any, of the Company and
      its other creditors in such property or such proceeds.

            Nothing herein contained, however, shall affect the right of the
Trustee

            (A) to retain for its own account (i) payments made on account of
      any such claim by any Person (other than the Company) who is liable
      thereon, and (ii) the proceeds of the bona fide sale of any such claim by
      the Trustee to a third person, and (iii) distributions made in cash,
      securities or other property in respect of claims filed against the
      Company in bankruptcy or receivership or in proceedings for reorganization
      pursuant to the Federal Bankruptcy Act or applicable State law;

            (B) to realize, for its own account, upon any property held by it as
      security for any such claim, if such property was so held prior to the
      beginning of such 3-month period;

            (C) to realize, for its own account, but only to the extent of the
      claim hereinafter mentioned, upon any property held by it as Security for
      any such claim, if such claim was created after the beginning of such
      3-month period and such property was received as security therefor
      simultaneously with the creation thereof, and if the Trustee shall sustain
      the burden of proving that at the time such property was so received the
      Trustee had no reasonable cause to believe that a default as

                                                                              84


      defined in Subsection (c) of this Section would occur within 3 months; or

            (D) to receive payment on any claim referred to in paragraph (B) or
      (C), against the release of any property held as security for such claim
      as provided in paragraph (B) or (C), as the case may be, to the extent of
      the fair value of such property.

            For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such 3-month period for property held as
security at the time of such substitution shall, to the extent of the fair value
of the property released, have the same status as the property released, and, to
the extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.

            If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, the Securityholders and the holders
of other indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee anything
on account of the receipt by it from the Company of the funds and property in
such special account and before crediting to the respective claims of the
Trustee and the Securityholders and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other than
from such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any

                                                                              85


distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, whether such distribution is made in cash, securities, or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion between the Trustee and the Securityholders and
the holders of other indenture Securities in accordance with the provisions of
this paragraph, the funds and property held in such special account and proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to
the provisions of this paragraph due consideration in determining the fairness
of the distributions to be made to the Trustee and the Securityholders and the
holders of other indenture Securities with respect to their respective claims,
in which event it shall not be necessary to liquidate or to appraise the value
of any Securities or other property held in such special account or as Security
for any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to apply
the provisions of this paragraph as a mathematical formula.

            Any Trustee which has resigned or been removed after the beginning
of such 3-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such 3-month period, it shall be
subject to the provisions of this Subsection if and only if the following
conditions exist:

            (i) the receipt of property or reduction of claim, which would have
      given rise to the obligation to account, if such Trustee had continued as
      Trustee, occurred after the beginning of such 3-month period; and

            (ii) such receipt of property or reduction of claim occurred within
      3 months after such resignation or removal.

                                                                              86


            (b) There shall be excluded from the operation of Subsection (a) of
this Section a creditor relationship arising from

            (1) the ownership or acquisition of securities issued under any
      indenture, or any security or securities having a maturity of one year or
      more at the time of acquisition by the Trustee;

            (2) advances authorized by a receivership or bankruptcy court of
      competent jurisdiction, or by this Indenture, for the purpose of
      preserving any property which shall at any time be subject to the lien of
      this Indenture or of discharging tax liens or other prior liens or
      encumbrances thereon, if notice of such advances and of the circumstances
      surrounding the making thereof is given to the Securityholders at the time
      and in the manner provided in this Indenture;

            (3) disbursements made in the ordinary course of business in the
      capacity of trustee under an indenture, transfer agent, registrar,
      custodian, paying agent, fiscal agent or depositary, or other similar
      capacity;

            (4) an indebtedness created as a result of services rendered or
      premises rented; or an indebtedness created as a result of goods or
      securities sold in a cash transaction as defined in Subsection (c) of this
      Section;

            (5) the ownership of stock or of other securities of a corporation
      organized under the provisions of Section 25(a) of the Federal Reserve
      Act, as amended, which is directly or indirectly a creditor of the
      Company; or

            (6) the acquisition, ownership, acceptance or negotiation of any
      drafts, bills of exchange, acceptances or obligations which fall within
      the classification of self liquidating paper as defined in Subsection (c)
      of this Section.

            (c)  For the purposes of this Section only:

            (1) The term "default" means any failure to make

                                                                              87


      payment in full of the principal of or interest on any of the securities
      or upon the other indenture securities when and as such principal or
      interest becomes due and payable.

            (2) The term "other indenture securities" means securities upon
      which the Company is an obligor outstanding under any other indenture (i)
      under which the Trustee is also trustee, (ii) which contains provisions
      substantially similar to the provisions of this Section, and (iii) under
      which a default exists at the time of the apportionment of the funds and
      property held in such special account.

            (3) The term "cash transaction" means any transaction in which full
      payment for goods or securities sold is made within 7 days after delivery
      of the goods or securities in currency or in checks or other orders drawn
      upon banks or bankers and payable upon demand.

            (4) The term "self-liquidating paper" means any draft, bill of
      exchange, acceptance or obligation which is made, drawn, negotiated or
      incurred by the Company for the purpose of financing the purchase,
      processing, manufacturing, shipment, storage or sale of goods, wares or
      merchandise and which is secured by documents evidencing title to,
      possession of, or a lien upon, the goods, wares or merchandise or the
      receivables or proceeds arising from the sale of the goods, wares or
      merchandise previously constituting the security, provided the security is
      received by the Trustee simultaneously with the creation of the creditor
      relationship with the Company arising from the making, drawing,
      negotiating or incurring of the draft, bill of exchange, acceptance or
      obligation.

            (5) The term "Company" means any obligor upon the Securities.

            Section 614. APPOINTMENT OF AUTHENTICATING AGENT. At any time when
any of the Securities remain Outstanding the Trustee, with the approval of the
Company, may appoint

                                                                              88


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 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 thereof or the
District of Columbia, authorized under such laws to act as an Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and,
if other than the Company itself, 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 the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, 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

                                                                              89


Authenticating Agent.

            An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and, if other than the Company, 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, if other than
the Company, 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,
with the approval of the Company, may appoint a successor Authenticating Agent
which shall be acceptable to the Company and shall mail written notice of such
appointment by first-class mail, postage prepaid, to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve, as
their names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder 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 Trustee agrees to pay to each Authenticating Agent (other than
an Authenticating Agent appointed at the request of the Company 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
alternate certificate of authentication in the following form:

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

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                                    [                     ], as
                                    Trustee


                                      By:
                                           As Authenticating Agent


Dated:                          By:
                                             Authorized Signatory

                                  ARTICLE SEVEN

                      SECURITYHOLDERS' LISTS AND REPORTS BY
                     TRUSTEE, GUARANTOR AND COMPANY

            Section 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS. The Company will furnish or cause to be furnished to the
Trustee

            (a) semi-annually, not more than 30 days after each Regular Record
      Date, in each year in such form as the Trustee may reasonably require, a
      list of the names and addresses of the Holders of Securities of such
      series as of such date, and

            (b) at such other times as the Trustee may request in writing,
      within 30 days after the receipt by the Company of any such request, a
      list of similar form and content as of a date not more than 30 days prior
      to the time such list is furnished,

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

            Section 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
SECURITYHOLDERS. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders of Securities 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

                                                                              91


new list so furnished.

            (b) If 3 or more Holders of Securities of any series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security of such
series for a period of at least 6 months preceding the date of such application,
and such application states that the applicants desire to communicate with other
Holders of Securities of such series or with the Holders of all Securities with
respect to their rights under this Indenture or under such Securities and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within 5 Business Days
after the receipt of such application, at its election, either

            (i) afford such applicants access to the information preserved at
      the time by the Trustee in accordance with Section 702(a), or

            (ii) inform such applicants as to the approximate number of Holders
      of Securities of such series or all Securities, as the case may be, whose
      names and addresses appear in the information preserved at the time by the
      Trustee in accordance with Section 702(a), and as to the approximate cost
      of mailing to such Securityholders the form of proxy or other
      communication, if any, specified in such application.

            If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of a Security of such series or to all
Securityholders, as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with Section
702(a), a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless, within 5 days after such tender, the
Trustee shall mail to such applicants and file with the

                                                                              92


Commission, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the Holders of Securities of such series or
all Securityholders, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all Securityholders
of such series or all Securityholders, as the case may be, with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.

            (c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders of Securities in accordance with
Section 702(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 702(b).

            Section 703. REPORTS BY TRUSTEE. (a) The term "reporting date" as
used in this Section means [  ] of each year. Within 60 days after the reporting
date in each year, beginning in 200  , the Trustee shall transmit by mail to all
Securityholders, as their names and addresses appear in the Security Register, a
brief report dated as of such reporting date with respect to any of the
following events which may have occurred during the 12 months preceding the date
of such report (but if no such event has occurred within such period no report
need be transmitted):

                                                                              93


            (1) any change to its eligibility under Section 609 and its
      qualifications under Section 608;

            (2) the creation of or any material change to a relationship
      specified in Section 310(b)(1) through Section 310(b)(10) of the Trust
      Indenture Act;

            (3) the character and amount of any advances (and if the Trustee
      elects so to state, the circumstances surrounding the making thereof) made
      by the Trustee (as such) which remain unpaid on the date of such report,
      and for the reimbursement of which it claims or may claim a lien or
      charge, prior to that of Securities of any series, on any property or
      funds held or collected by it as Trustee, except that the Trustee shall
      not be required (but may elect) to report such advances if such advances
      so remaining unpaid aggregate not more than 1/2 of 1% of the principal
      amount of the Securities of such series outstanding on the date of such
      report;

            (4) any change to the amount, interest rate and maturity date of all
      other indebtedness owing by the Company (or by any other obligor on the
      Securities) to the Trustee in its individual capacity, on the date of such
      report, with a brief description of any property held as collateral
      security therefor, except an indebtedness based upon a creditor
      relationship arising in a manner described in Section 613(b)(2), (3), (4)
      or (6);

            (5) any change to the property and funds, if any, physically in the
      possession of the Trustee as such on the date of such report;

            (6) any additional issue of Securities which the Trustee has not
      previously reported; and

            (7) any action taken by the Trustee in the performance of its duties
      hereunder which it has not previously reported and which in its opinion
      materially affects the Securities, except action in respect of a default,
      notice of which has been or is to be withheld by the Trustee in accordance
      with Section 602.

                                                                              94


            (b) The Trustee shall transmit by mail to all Securityholders, as
their names and addresses appear in the Security Register, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
Subsection (a) of this Section(or if no such report has yet been so transmitted,
since the date of execution of this instrument) for the reimbursement of which
it claims or may claim a lien or charge, prior to that of the Securities of any
series, on property or funds held or collected by it as Trustee, and which it
has not previously reported pursuant to this Subsection, except that the Trustee
shall not be required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate [  ] or less of the principal amount of
the Securities Outstanding of such series at such time, such report to be
transmitted within 90 days after such time.

            (c) A copy of each such report shall, at the time of such
transmission to Securityholders, 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 when the Securities are listed on any stock
exchange.

            Section 704. REPORTS BY COMPANY AND GUARANTOR. The Company and the
Guarantor each will

            (1) file with the Trustee, within 30 days after the Company or the
      Guarantor 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 or the
      Guarantor may be required to file with the Commission pursuant to Section
      13 or Section 15(d) of the Securities Exchange Act of 1934; or, if neither
      the Company nor the Guarantor is required to file

                                                                              95


      information, documents or reports pursuant to either of said Sections,
      then the Guarantor will 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 Securities
      Exchange Act of 1934 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 or the Guarantor 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 Securityholders, 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 paragraphs (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, AMALGAMATION, MERGER, CONVEYANCE OR TRANSFER

            Section 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate or amalgamate with or merge into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:

            (1) the Person formed by such consolidation or amalgamation or into
      which the Company is merged or the

                                                                              96


      Person which acquires by conveyance or transfer the properties and assets
      of the Company substantially as an entirety shall be a corporation or
      limited liability company organized and existing under the laws of the
      United States of America, any State thereof, the District of Columbia or
      Bermuda, and shall expressly assume, by an indenture supplemental hereto,
      executed by the successor Person and the Guarantor 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 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; and

            (3) either the Company or the successor Person has delivered to the
      Trustee an Officers' Certificate and an Opinion of Counsel each stating
      that such consolidation, amalgamation, merger, conveyance or transfer and
      such supplemental indenture comply with this Article and that all
      conditions precedent herein provided for relating to such transaction have
      been complied with.

            Section 802. SUCCESSOR PERSON SUBSTITUTED FOR COMPANY. Upon any
consolidation, amalgamation or merger, or any conveyance or transfer of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolida tion or
amalgamation or into which the Company is merged or to which such conveyance or
transfer 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. In the event
of any such conveyance or transfer, the Company as the predecessor corporation
may be dissolved, wound up or liquidated at any time thereafter.

                                                                              97


            Section 803. SUCCESSOR PERSON SUBSTITUTED FOR GUARANTOR. Upon any
consolidation, amalgamation or merger, or any conveyance or transfer of the
properties and assets of the Guarantor substantially as an entirety, whether
or not such event gives rise to an Event of Default under Section 501(5), the
successor Person formed by such consolidation or amalgamation or into which
the Guarantor is merged or to which such conveyance or transfer is made shall



                                                                              98


succeed to, and be substituted for, and may exercise every right and power of,
the Guarantor under this Indenture with the same effect as if such successor
Person had been named as the Guarantor herein. In the event of any such
conveyance or transfer, the Guarantor as the predecessor corporation may be
dissolved, wound up or liquidated at any time thereafter.

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

            Section 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITYHOLDERS. Without the consent of the Holders of any Securities, the
Company, when authorized by a Board Resolution, the Guarantor, when authorized
by a Guarantor's Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

            (1) to evidence the succession of another Person to the Company or
      the Guarantor, and the assumption by any such successor of the covenants
      of the Company herein and in the Securities contained; or

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

            (3) to cure any ambiguity, to correct or supplement any provision
      herein 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; or

            (4) to add to this Indenture such provisions as may be expressly
      permitted by the TIA, excluding,

                                                                              99


      however, the provisions referred to in Section 316(a)(2) of the TIA as in
      effect at the date as of which this instrument was executed or any
      corresponding provision in any similar federal statute hereafter enacted;
      or

            (5) to establish any form of Security, as provided in Article Two,
      and to provide for the issuance of any series of Securities as provided in
      Article Three and to set forth the terms thereof, and/or to add to the
      rights of the Holders of the Securities of any series; or

            (6) to evidence and provide for the acceptance of appointment by
      another corporation as a successor Trustee hereunder with respect to one
      or more series of Securities and to add to or change any of the provisions
      of this Indenture as shall be necessary to provide for or facilitate the
      administration of the trusts hereunder by more than one Trustee, pursuant
      to Section 611; or

            (7) to add any additional Events of Default in respect of the
      Securities of any or all series (and if such additional Events of Default
      are to be in respect of less than all series of Securities, stating that
      such Events of Default are expressly being included solely for the benefit
      of one or more specified series); or

            (8) to provide for the issuance of Securities in coupon as well as
      fully registered form.

            No supplemental indenture for the purposes identified in Clauses
(2), (3), (5) or (7) above may be entered into if to do so would adversely
affect the interest of the Holders of Securities of any series.

            Section 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF
SECURITYHOLDERS. 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

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indenture or indentures (and, in the case of any series of Securities held as
trust assets of a Fund American Trust and with respect to which a Security
Exchange has not theretofore occurred, such consent of holders of the Preferred
Securities and the Common Securities of such Fund American Trust as may be
required under the Declaration of Trust of such Fund American Trust), by Act of
said Holders delivered to the Company, the Company and the Trustee, the Company,
when authorized by a Board Resolution, the Guarantor, when authorized by a
Guarantor's 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 the Securities of each
such series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby (and, in the case of any series of Securities held as trust
assets of a Fund American Trust and with respect to which a Security Exchange
has not theretofore occurred, such consent of holders of the Preferred
Securities and the Common Securities of such Fund American Trust as may be
required under the Declaration of Trust of such Fund American Trust),

            (1) change the Maturity of the principal of, or the Stated Maturity
      of any premium on, or any installment of interest on, any Security, or
      reduce the principal amount thereof or the interest or any premium
      thereon, or change the method of computing the amount of principal thereof
      or interest thereon on any date or change any Place of Payment where, or
      the coin or currency in which, any Security or any premium or interest
      thereon is payable, or impair the right to institute suit for the
      enforcement of any such payment on or after the Maturity or the Stated
      Maturity, as the case may be, thereof (or, in the case of redemption or
      repayment, on or after the Redemption Date or the Repayment Date, as the
      case may be); 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

                                                                             101


      this Indenture or certain defaults hereunder and their consequences,
      provided for in this Indenture; or

            (3) modify any of the provisions of this Section or Section 513,
      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.

            A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, 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 Securityholders 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 Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not (except to the extent required in
the case of a supplemental indenture entered into under Section 901(4) or
901(6)) be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.

            Section 904. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance

                                                                             102


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 to the extent
provided therein.

            Section 905. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the TIA 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
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.

                                   ARTICLE TEN

                                    COVENANTS

            Section 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. With
respect to each series of Securities, the Company will duly and punctually pay
the principal of (and premium, if any) and interest on such Securities in
accordance with their terms and this Indenture, and will duly comply with all
the other terms, agreements and conditions contained in, or made in the
Indenture for the benefit of, the Securities of such series.

            Section 1002. MAINTENANCE OF OFFICE OR AGENCY. The Company will
maintain an office or agency in each Place of Payment where Securities may be
presented or surrendered for payment, 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 will
give prompt

                                                                             103


written notice to the Trustee of the location, and of any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain such 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 principal Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee its agent to receive all such presentations,
surrenders, notices and demands.

            The Guarantor will maintain an office or agency in each Place of
Payment where Securities to which the Guarantee applies may be presented or
surrendered for payment pursuant to the Guarantee and where notices and demands
to or upon the Guarantor in respect of the Guarantee and this Indenture may be
served. The Guarantor will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Guarantor shall fail to maintain any such office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders and demands may be made or served at the Principal Corporate Trust
Office of the Trustee, and the Guarantor hereby appoints the Trustee as its
agent to receive all such presentations, surrenders and demands.

            Section 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST. If
the Company shall at any time act as its own Paying Agent for 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 action or failure
to act.

            Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
(and premium, if any) or interest on, any Securities of such series, deposit
with a

                                                                             104


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 action or failure so to act.

            The Company will cause each Paying Agent other than the Trustee for
any series of Securities 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 principal of (and
      premium, if any) or interest on Securities of such series 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 of such series) in the making of any
      such payment of principal (and premium, if any) or interest on the
      Securities of such series; 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 or the Guarantor may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture with respect to any
series of Securities or for any other purpose, pay, or by Company Order or
Guarantor Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company, the Guarantor or such Paying Agent in respect of each and
every series of Securities as to which it seeks to discharge this Indenture or,
if for any other purpose, all sums so held in trust by the Company or the
Guarantor in respect of all Securities, such sums to be held by the Trustee upon
the same trusts as those upon which such sums were held by the Company, the
Guarantor or such Paying Agent; and, upon such payment by

                                                                             105


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 or the Guarantor, in trust for the payment of the principal
of (and premium, if any) or interest on any Security of any series and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall be paid to the Company on Company Request (or
if deposited by the Guarantor, paid to the Guarantor upon Guarantor Request), or
(if then held by the Company or the Guarantor) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company and the Guarantor 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. The Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company and the Guarantor mail to the
Holders of the Securities as to which the money to be repaid was held in trust,
as their names and addresses appear in the Security Register, a notice that such
moneys remain unclaimed and that, after a date specified in the notice, which
shall not be less than 30 days from the date on which the notice was first
mailed to the Holders of the Securities as to which the money to be repaid was
held in trust, any unclaimed balance of such moneys then remaining will be paid
to the Company or the Guarantor, as the case may be, free of the trust formerly
impressed upon it.

            The Company initially authorizes the Trustee to act as Paying Agent
for the Securities on its behalf. The Company may at any time and from time to
time authorize one or more Persons to act as Paying Agent in addition to or in
place of the Trustee with respect to any series of Securities issued under this
Indenture.

            Section 1004. STATEMENT AS TO COMPLIANCE. The Company and the
Guarantor each will deliver to the Trustee,

                                                                             106


within 120 days after the end of each fiscal year, a written statement signed by
the principal executive officer, principal financial officer or principal
accounting officer of the Company or the Guarantor, as the case may be, stating
that

            (1) a review of the activities of the Company or the Guarantor, as
      the case may be, during such year and of its performance under this
      Indenture and under the terms of the Securities has been made under his
      supervision; and

            (2) to the best of his knowledge, based on such review, the Company
      or the Guarantor, as the case may be, has complied with all conditions and
      covenants under this Indenture through such year, or, if there has been a
      default in the fulfillment of any such obligation, specifying each such
      default known to him and the nature and status thereof.

            For purposes of this Section 1004, compliance shall be determined
without regard to any grace period (other than an Extension Period) or
requirement of notice provided pursuant to the terms of this Indenture.

            Section 1005. CORPORATE EXISTENCE. Subject to Article Eight each of
the Company and the Guarantor will do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence.

            Section 1006. ADDITIONAL COVENANTS. The Company and the Guarantor
each covenants and agrees with each Holder of Securities of a series issued to a
Fund American Trust that it will not declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any shares of its capital stock (other than (a) dividends,
distributions, redemptions, purchases, acquisitions or payments made with its
capital stock, (b) any declaration or payment of a dividend in connection with
the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments of accrued dividends on preferred stock
upon the redemption, exchange or conversion of any preferred stock as may be
outstanding

                                                                             107


from time to time, (d) the purchase of fractional interests in shares of
preferred stock upon the redemption, exchange or conversion of such preferred
stock, (e) purchases or acquisitions of shares of common stock in connection
with the satisfaction of obligations under any employee benefit plan or other
contractual obligation or (f) as a result of a reclassification of capital stock
or the exchange or conversion of one class or series capital stock for another
class or series of capital stock), if at such time (i) there shall have occurred
an Event of Default, (ii) the Guarantor shall be in default with respect to its
payment of any obligations under the related Fund American Trust Guarantee or
(iii) the Company shall have given notice of its election to begin an Extension
Period as provided herein and shall not have rescinded such notice, or such
Extension Period, or any extension thereof, shall be continuing.

            The Company also covenants with each Holder of Securities of a
series issued to a Fund American Trust (i) to maintain directly, or indirectly
through a wholly owned Subsidiary, 100% ownership of the Common Securities of
such Fund American 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, windup or liquidate such Fund
American Trust, except (a) in connection with a distribution of the Securities
of such series to the holders of Preferred Securities in liquidation of such
Fund American Trust or (b) in connection with certain mergers, consolidations or
amalgamations permitted by the related Declaration of Trust and (iii) to use its
reasonable best efforts, consistent with the terms and provisions of such
Declaration of Trust, to cause such Fund American Trust to remain classified as
a grantor trust and not as an association taxable as a corporation for United
States Federal income tax purposes.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

            Section 1101. APPLICABILITY OF ARTICLE. The

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Company may reserve the right to redeem and pay before Stated Maturity all or
any part of the Securities of any series, either by optional redemption, sinking
or purchase fund or analogous obligation or otherwise, by provision therefor in
the form of Security for such series established and approved pursuant to
Section 202 and on such terms as are specified in such form or in the Board
Resolution or indenture supplemental hereto with respect to Securities of such
series as provided in Section 301. Redemption of Securities of any series shall
be made in accordance with the terms of such Securities and, to the extent that
this Article does not conflict with such terms, the succeeding Sections of this
Article.

            Section 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of
the Company to redeem any Securities redeemable at the election of the Company
shall be evidenced by, or made pursuant to authority granted by, a Board
Resolution. In case of any redemption at the election of the Company of any
Securities of any series, the Company shall, at least 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 and of
the principal amount of Securities of such series to be redeemed.

            In the case of any redemption of Securities (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (ii) 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
evidencing compliance with such restriction or condition.

            Section 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If
less than all the Securities of like tenor and terms of any series are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may include provision
for the selection for redemption of portions of the principal of Securities of
such series of a

                                                                             109


denomination larger than the minimum authorized denomination for Securities of
that series. Unless otherwise provided in the terms of a particular series of
Securities, the portions of the principal of Securities so selected for partial
redemption shall be equal to the minimum authorized denomination of the
Securities of such series, or an integral multiple thereof, and the principal
amount which remains outstanding shall not be less than the minimum authorized
denomination for Securities of such series. If less than all the Securities of
unlike tenor and terms of a series are to be redeemed, the particular Securities
to be redeemed shall be selected by the Company.

            The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected for
partial redemption, 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 of such Security which has been or is to be redeemed.

            Section 1104. 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 his address appearing in the Security Register.

            All notices of redemption shall state:

            (1) the Redemption Date;

            (2) the Redemption Price;

            (3) if less than all Outstanding Securities of any series are to be
      redeemed, the identification, including CUSIP numbers (and, in the case of
      partial redemption, the respective principal amounts) of the Securities to
      be redeemed, from the Holder to whom the

                                                                             110


      notice is given;

            (4) that on the Redemption Date the Redemption Price will become due
      and payable upon each such Security, and that interest, if any, thereon
      shall cease to accrue from and after said date;

            (5) the place where such Securities are to be surrendered for
      payment of the Redemption Price, which shall be the office or agency of
      the Company in the Place of Payment; and

            (6) that the redemption is on account of a sinking or purchase fund,
      or other analogous obligation, if that be 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. Such notice shall be
deemed to have been given to each Holder if sent in accordance with Section 105
hereof.

            Section 1105. DEPOSIT OF REDEMPTION PRICE. On or prior to 10:00 a.m.
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 all the Securities which are to be redeemed on that
date.

            Section 1106. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of
Redemption having been given as aforesaid, the Securities so to be 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) such Securities shall cease to bear
interest. Upon surrender of such Securities for redemption in accordance with
the notice, such Securities shall be paid by the Company at the Redemption
Price. Installments of interest the Stated Maturity of which is on or prior to
the Redemption Date

                                                                             111


shall be payable to the Holders of such Securities registered as such 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 shall, until paid, bear interest
from the Redemption Date at the rate borne by the Security, or as otherwise
provided in such Security.

            Section 1107. SECURITIES REDEEMED IN PART. Any Security which is to
be redeemed only in part shall be surrendered at the office or agency of the
Company in the Place of Payment with respect to that series (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
the same series and Stated Maturity and of like tenor and terms, 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.

            Section 1108. PROVISIONS WITH RESPECT TO ANY SINKING FUNDS. Unless
the form or terms of any series of Securities shall provide otherwise, in lieu
of making all or any part of any mandatory sinking fund payment with respect to
such series of Securities in cash, the Company may at its option (1) deliver to
the Trustee for cancellation any Securities of such series theretofore acquired
by the Company, or (2) receive credit for any Securities of such series (not
previously so credited) acquired by the Company and theretofore delivered to the
Trustee for cancellation or redeemed by the Company other than through the
mandatory sinking fund, and if it does so then (i) Securities so delivered or
credited shall be credited at the applicable sinking fund Redemption Price with
respect to Securities of such series, and (ii) on or before the 60th day next
preceding each sinking fund Redemption Date with respect to such series of
Securities, the Company will deliver to the Trustee (A) an Officers' Certificate
specifying the portions of such sinking fund payment to be satisfied by payment
of

                                                                             112


cash and by delivery or credit of Securities of such series acquired by the
Company or so redeemed, and (B) such Securities so acquired, to the extent not
previously surrendered. Such Officers' Certificate shall also state the basis
for such credit and that the Securities for which the Company elects to receive
credit have not been previously so credited and were not redeemed by the Company
through operation of the mandatory sinking fund, if any, provided with respect
to such Securities and shall also state that no Event of Default with respect to
Securities of such series has occurred and is continuing. All Securities so
delivered to the Trustee shall be canceled by the Trustee and no Securities
shall be authenticated in lieu thereof.

            If the sinking fund payment or payments (mandatory or optional) with
respect to any series of Securities made in cash plus any unused balance of any
preceding sinking fund payments with respect to Securities of such series made
in cash shall exceed $50,000 (or a lesser sum if the Company shall so request),
unless otherwise provided by the terms of such series of Securities, that cash
shall be applied by the Trustee on the sinking fund Redemption Date with respect
to Securities of such series next following the date of such payment to the
redemption of Securities of such series at the applicable sinking fund
Redemption Price with respect to Securities of such series, together with
accrued interest, if any, to the date fixed for redemption, with the effect
provided in Section 1106. The Trustee shall select, in the manner provided in
Section 1103, for redemption on such sinking fund Redemption Date a sufficient
principal amount of Securities of such series to utilize that cash and shall
thereupon cause notice of redemption of the Securities of such series for the
sinking fund to be given in the manner provided in Section 1104 (and with the
effect provided in Section 1106) for the redemption of Securities in part at the
option of the Company. Any sinking fund moneys not so applied or allocated by
the Trustee to the redemption of Securities of such series shall be added to the
next cash sinking fund payment with respect to Securities of such series
received by the Trustee and, together with such payment, shall be applied in
accordance with the provisions of this Section 1108. Any and all sinking fund
moneys with

                                                                             113


respect to Securities of any series held by the Trustee at the Maturity of
Securities of such series, and not held for the payment or redemption of
particular Securities of such series, shall be applied by the Trustee, together
with other moneys, if necessary, to be deposited sufficient for the purpose, to
the payment of the principal of the Securities of such series at Maturity.

            On or before each sinking fund Redemption Date provided with respect
to Securities of any series, the Company shall pay to the Trustee in cash a sum
equal to all accrued interest, if any, to the date fixed for redemption on
Securities to be redeemed on such sinking fund Redemption Date pursuant to this
Section 1108.

                                 ARTICLE TWELVE

                                  SUBORDINATION

            Section 1201. AGREEMENT OF SECURITYHOLDERS THAT SECURITIES
SUBORDINATED TO EXTENT PROVIDED. The Company, for itself, its successors and
assigns, covenants and agrees and each Holder of the Securities by his or her
acceptance thereof likewise covenants and agrees that the payment of the
principal of, premium, if any, and interest on each and all of the Securities is
hereby expressly subordinated, to the extent and in the manner hereinafter set
forth, to the prior payment in full of all Senior Indebtedness. The provisions
of this Article shall constitute a continuing offer to all persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are hereby made obligees hereunder the
same as if their names were written herein as such, and the and/or each of them
may proceed to enforce such provisions.

            Section 1202. COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO
SECURITIES IN CERTAIN CIRCUMSTANCES. (a) Upon the maturity of any Senior
Indebtedness by lapse of time, acceleration or otherwise, all principal thereof
and premium, if any, and interest thereon shall first be paid in full, or such
payment duly provided for in cash or in a manner satisfactory to the holder or
holders of such Senior

                                                                             114


Indebtedness, before any payment is made on account of the principal of or
premium, if any, or interest on the Securities or to acquire any of the
Securities or on account of any sinking fund (except sinking fund payments made
in Securities acquired by the Company before the maturity of such Senior
Indebtedness).

            (b) Upon the happening of (i) an event of default with respect to
any Senior Indebtedness, as such event of default is defined therein or in the
instrument under which it is outstanding, permitting the holders to accelerate
the maturity thereof, or (ii) an event which, with the giving of notice, or
lapse of time, or both, would constitute such an event of default, then, unless
and until such event shall have been cured or waived or shall have ceased to
exist, no payment shall be made by the Company with respect to the principal of
or premium, if any, or interest on the Securities or to acquire any of the
Securities or on account of any sinking fund for the Securities (except sinking
fund payments made in Securities acquired by the Company before such default and
notice thereof).

            (c) In the event that notwithstanding the provisions of this Section
1202 the Company shall make any payment to the Trustee on account of the
principal of or premium, if any, or interest on the Securities, or on account of
any sinking fund, or the Holders of the Securities shall receive any such
payment, after the happening of a default in payment of the principal of or
premium, if any, or interest on Senior Indebtedness, then, unless and until such
default or event of default shall have been cured or waived or shall have ceased
to exist, such payment (subject to the provisions of Section 1206) shall be held
by the Trustee or the Holders of the Securities, as the case may be, in trust
for the benefit of, and shall be paid forthwith over and delivered to, the
holders of Senior Indebtedness (pro rata as to each of such holders on the basis
of the respective amounts of Senior Indebtedness held by them) or their
representatives or the trustee under the indenture or other agreement (if any)
pursuant to which any instruments evidencing any Senior Indebtedness may have
been issued, as their respective interests may appear, for

                                                                             115


application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in accordance with the
terms of such Senior Indebtedness, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness. The Company shall
give prompt written notice to the Trustee of any default under any Senior
Indebtedness or under any agreement pursuant to which Senior Indebtedness may
have been issued.

            Section 1203. SECURITIES SUBORDINATED TO PRIOR PAYMENTS OF ALL
SENIOR INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE
COMPANY. Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise):

            (a) the holders of all Senior Indebtedness shall first be entitled
      to receive payment in full of the principal thereof, premium, if any, and
      interest due thereon before the Holders of the Securities are entitled to
      receive any payment on account of the principal of, premium, if any, or
      interest on the Securities;

            (b) any payment or distribution of assets of the Company of any kind
      or character, whether in cash, property or securities, to which the
      Holders of the Securities or the Trustees would be entitled except for the
      provisions of this Article Twelve, shall be paid by the liquidating
      trustee or agent or other person making such payment or distribution,
      whether a trustee in bankruptcy, a receiver or liquidating trustee or
      other trustee or agent, directly to the holders of Senior Indebtedness or
      their representative or representatives, or to the trustee or trustees
      under any indenture under which any instruments evidencing any of such
      Senior Indebtedness may have been issued, to the extent necessary to make
      payment in full of all Senior Indebtedness remaining unpaid, after giving
      effect to any concurrent payment or distribution or provision therefor to
      the holders of such Senior Indebtedness;

                                                                             116


            (c) in the event that notwithstanding the foregoing provisions of
      this Section 1203, any payment or distribution of assets of the Company of
      any kind or character, whether in cash, property or securities, shall be
      received by the Trustee or the Holders of the Securities on account of
      principal, or premium, if any, or interest on the Securities before all
      Senior Indebtedness is paid in full, or effective provisions made for its
      payment, such payment or distribution (subject to the provisions of
      Sections 1206 and 1207) shall be received and held in trust for and shall
      be paid over to the holders of the Senior Indebtedness remaining unpaid or
      unprovided for or their representative or representatives, or to the
      trustee or trustees under any indenture under which any instruments
      evidencing any of such Senior Indebtedness may have been issued, for
      application to the payment of such Senior Indebtedness until all such
      Senior Indebtedness shall have been paid in full, after giving effect to
      any concurrent payment or distribution or provision therefor to the
      holders of such Senior Indebtedness.

            Section 1204. SECURITYHOLDERS TO BE SUBROGATED TO RIGHT OF HOLDERS
OF SENIOR INDEBTEDNESS. Subject to the payment in full of all Senior
Indebtedness, the Holders of the Securities shall be subrogated to the rights of
the holders of Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Securities shall be paid in full, and for the purpose of such
subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the Holders of
the Securities by virtue of this Article which otherwise would have been made to
the Holders of the Securities, be deemed to be payment by the Company to or on
account of the Senior Indebtedness, it being understood that the provisions of
this Article Twelve 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 the Senior Indebtedness, on the

                                                                             117


other hand.

            Section 1205. OBLIGATION OF THE COMPANY UNCONDITIONAL. Nothing
contained in this Article Twelve or elsewhere in this Indenture or in the
Securities is intended to or shall impair as between the Company and the Holders
of the Securities, the obligations of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of,
premium, if any, and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Twelve
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy. Upon any
distribution of assets of the Company referred to in this Article Twelve, the
Trustee, subject to the provisions of Section 601, and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the Trustee or to
the Holders of the Securities, for the purpose of ascertaining the persons
entitled to participate in such 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 Twelve.

            Section 1206. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE. The Trustee shall not at any time be charged with knowledge
of the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Company or from one
or more holders of Senior Indebtedness or from any trustee therefor; and, prior
to the receipt of any such written notice, the Trustee,

                                                                             118


subject to the provisions of Section 601, shall be entitled to assume
conclusively that no such facts exist.

            Section 1207. APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT.
Anything in this Indenture to the contrary notwithstanding, any deposit of
monies by the Company with the Trustee or any paying agent (whether or not in
trust) for the payment of the principal of or premium, if any, or interest on
any Securities shall be subject to the provisions of Sections 1201, 1202, 1203
and 1204 except that, if prior to the date on which by the terms of this
Indenture any such monies may become payable for any purpose (including, without
limitation, the payment of either the principal of or interest or premium, if
any, on any Security) a Responsible Officer of the Trustee shall not have
received with respect to such monies the notice provided for in Section 1206,
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 on or after such date.

            Section 1208. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS. No right of any present or future
holders 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
which any such holder may have or be otherwise charged with.

            Section 1209. SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES. Each Holder of the Securities by his or her
acceptance thereof authorizes and expressly directs the Trustee on his or her
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Twelve and appoints the Trustee his/her
attorney-in-fact for such

                                                                             119


purpose, including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise)
tending towards liquidation of the business and assets of the Company, the
immediate filing of a claim for the unpaid balance of its or his or her
Securities in the form required in said proceedings and cause said claim to be
approved. If the trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holder or holders of the Senior
Indebtedness are hereby authorized to and have the right to file an appropriate
claim for and on behalf of the holders of said Securities.

            Section 1210. RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS. The
Trustee shall be entitled to all of the rights set forth in this Article Twelve
in respect of any Senior Indebtedness at any time held by it to the same extent
as any other holder of Senior Indebtedness, and nothing in Section 613 or
elsewhere in this Indenture shall be construed to deprive the Trustee of any of
its rights as such holder.

            Section 1211. ARTICLE TWELVE NOT TO PREVENT EVENTS OF DEFAULT. The
failure to make a payment on account of principal, interest or sinking fund by
reason of any provision of this Article Twelve shall not be construed as
preventing the occurrence of an Event of Default under Section 501.

                                ARTICLE THIRTEEN

                             GUARANTEE OF SECURITIES

            SECTION 1301. GUARANTEE. The Guarantor hereby fully and
unconditionally guarantees to each Holder of a Security of each series issued by
the Company, authenticated and delivered by the Trustee, the due and punctual
payment of the principal (including any amount due in respect of any Original
Issue Discount Security) of and any premium and interest on such Security, and
the due and punctual payment of any sinking fund payments provided for pursuant
to the

                                                                             120


terms of such Security, when and as the same shall become due and payable,
whether at the Stated Maturity, by declaration of acceleration, call for
redemption, early repayment or otherwise, in accordance with the terms of such
Security and this Indenture. The Guarantor hereby agrees that in the event of an
Event of Default its obligations hereunder shall be as if it were a principal
debtor and not merely a surety, and shall be absolute and unconditional,
irrespective of, and shall be unaffected by, any invalidity, irregularity or
unenforceability of any Security of any series or this Indenture, any failure to
enforce the provisions of any Security of any series or this Indenture, any
waiver, modification or indulgence granted to the Company with respect thereto
by the Holder of any Security of any series or the Trustee, or any other
circumstances which may otherwise constitute a legal or equitable discharge of a
surety or guarantor; provided, however, that, notwithstanding the foregoing, no
such waiver, modification or indulgence shall, without the consent of the
Guarantor, increase the principal amount of any Security or the interest rate
thereon or increase any premium payable upon redemption thereof. The Guarantor
hereby waives diligence, presentment, demand of payment, filing of claims with a
court in the event of merger or bankruptcy of the Company, any right to require
a proceeding first against the Company, the benefit of discussion, protest or
notice with respect to any Security or the indebtedness evidenced thereby or
with respect to any sinking fund payment required pursuant to the terms of such
Security issued under this Indenture and all demands whatsoever, and covenants
that this Guarantee will not be discharged with respect to such Security except
by payment in full of the principal thereof and any premium and interest thereon
or as provided in Article Four or Section 802. If any Holder or the Trustee is
required by any court or otherwise to return to the Company, the Guarantor, or
any custodian, trustee, liquidator or other similar official acting in relation
to the Company or the Guarantor any amount paid by the Company or the Guarantor
to the Trustee or such Holder, this Guarantee to the extent theretofore
discharged, shall be reinstated in full force and effect. The Guarantor further
agrees that, as between the Guarantor, on the one hand, and the Holders and the
Trustee, on the

                                                                             121


other hand, the Maturity of the obligations guaranteed hereby may be accelerated
as provided in Article Five hereof for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby.

            The Guarantor also agrees, to pay any and all reasonable costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Trustee or any Holders in enforcing any rights under this Guarantee.

            The Guarantor hereby waives any right of set off which the Guarantor
may have against the Holder of any Security in respect of any amounts which are
or may become payable by such Holder to the Company.

            The Guarantor shall be subrogated to all rights of the Holders of
any series of Securities and the Trustee against the Company in respect of any
amounts paid to such Holders and the Trustee by the Guarantor pursuant to the
provisions of the Guarantee; provided, however, that the Guarantor shall not be
entitled to enforce or to receive any payments arising out of or based upon,
such right of subrogation until the principal of, premium, if any, and interest,
if any, on all of the Securities of such series shall have been paid in full.

            No past, present or future stockholder, officer, director, employee
or incorporator of the Guarantor shall have any personal liability under the
Guarantees set forth in this Section 1301 by reason of his, her or its status as
such stockholder, officer, director, employee or incorporator.

            The Guarantee set forth in this Section 1301 shall not be valid or
become obligatory for any purpose with respect to any Security until the
certificate of authentication on such Security shall have been signed by or on
behalf of the Trustee.

            SECTION 1302. SUBORDINATION OF GUARANTEE. The

                                                                             122


obligation of the Guarantor under the Guarantee pursuant to this Article 13
shall be junior and subordinated to Senior Indebtedness of the Guarantor on the
same basis as the Securities are junior and subordinated to Senior Indebtedness
of the Company. For purposes of the foregoing sentence, the Trustee and the
Holders shall have the right to receive and/or retain payments by the Guarantor
only at such times as them may receive and/or retain payments in respect of the
Securities pursuant to this Indenture, including Article 12 hereof. The
Guarantee made by the Guarantor hereunder and evidenced by any notation of
Guarantee endorsed on any Security is subject to the provisions of Article 12
hereof.

            SECTION 1303. EXECUTION OF NOTATIONS OF GUARANTEE. To evidence its
Guarantee to the Holders specified in Section 1301, the Guarantor hereby agrees
to execute the notation of the Guarantee in substantially the form set forth in
Section 205 to be endorsed on each Security authenticated and delivered by the
Trustee. The Guarantor hereby agrees that its Guarantee set forth in Section
1301 shall remain in full force and effect notwithstanding any failure to
endorse on any Security a notation of such Guarantee. Each such notation of
Guarantee shall be signed on behalf of the Guarantor by any proper officer of
the Guarantor prior to the authentication of the Security on which it is
endorsed, and the delivery of such Security by the Trustee, after the due
authentication thereof by the Trustee hereunder, shall constitute due delivery
of the Guarantee on behalf of the Guarantor. Such signatures upon the notation
of the Guarantee may be manual or facsimile signatures of any present, past or
future proper officer of the Guarantor and may be imprinted or otherwise
reproduced below the notation of the Guarantee, and in case any such proper
officer of the Guarantor who shall have signed the notation of the Guarantee
shall cease to be such officer before the Security on which such notation is
endorsed shall have been authenticated and delivered by the Trustee or disposed
of by the Company, such Security nevertheless may be authenticated and delivered
or disposed of as though the person who signed the notation of the Guarantee had
not ceased to be such officer of the Guarantor.

                                                                             123


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

                                        WHITE MOUNTAINS INSURANCE
                                        GROUP, LTD.


                                        by

                                           Name:
                                           Title:


                                        FUND AMERICAN COMPANIES, INC.,


                                        by

                                          Name:
                                          Title:


                                        [                                 ],


                                        by

                                          Name:
                                          Title:



                                                                    EXHIBIT 4.10

                  AMENDED AND RESTATED DECLARATION OF TRUST OF
                              Fund American Trust I

     THIS AMENDED AND RESTATED DECLARATION OF TRUST, dated as of June 26, 2003,
among Fund American Companies, Inc., as Depositor (the "Depositor"), Bank One
Delaware, Inc., not in its individual capacity but solely as trustee (the
"Delaware Trustee",) and Reid T. Campbell and Dennis R. Smith, as trustees (the
"Regular Trustees" and collectively with the Delaware Trustee, the "Trustees")
amends and restates in entirety the Declaration of Trust, dated as of October
30, 2001, by and among the parties hereto, pursuant to which a certificate of
trust was filed with the Secretary of State of the State of Delaware. The
Depositor and the Trustees hereby agree as follows:

     1. The trust continued hereby (the "Trust") shall be known as "Fund
American Trust I", in which name the Trustees, 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 has assigned, transferred, conveyed and set over to the
Trustees the sum of $10. The Trustees have acknowledged receipt of such amount
in trust from the Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the trust estate in
trust for the Depositor. It is the intention of the parties hereto that the
Trust continued 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.

     3. The Depositor and Trustees will enter into a second amended and restated
Declaration of Trust, satisfactory to each such party and substantially in the
form to be included as an Exhibit to a 1933 Act Registration Statement referred
to below, to provide for the contemplated operation of the Trust created hereby
and the issuance by such Trust of the Preferred Securities and common securities
referred to therein. Prior to the execution and delivery of such second amended
and restated Declaration of Trust, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.

     4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) one or more Registration Statements on Form S-3 (each, a "1933
Act Registration Statement"), including any pre-effective or post-effective
amendments to any such 1933 Act Registration Statement, 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) one or more Registration Statements on Form
8-A (each, a "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 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 an
Underwriting Agreement relating to the Preferred Securities, among the Trust,
the Depositor and the several Underwriters named therein, substantially in the
form to be included as an Exhibit to a 1933 Act Registration Statement. In the
event that any filing referred to in clauses (i) through (iii) above is required
by the rules and regulations of the Commission, the Exchange or any other
national stock exchange or state securities or blue sky laws, to be executed on
behalf of the Trust by the Trustees, any Regular Trustee, in his capacity as
Trustee of the Trust, is hereby authorized and directed to join in any such
filing and to execute on behalf of the Trust any and all of the foregoing, it
being understood that Bank One Delaware, Inc., in its capacity as Trustee of the
Trust, shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of the
Commission, the Exchange or any other national stock exchange or state
securities or blue sky laws. In connection with all of the foregoing, the
Depositor hereby constitutes and appoints Reid T. Campbell and Dennis R. Smith,
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 any 1933 Act
Registration Statement and any 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, thereby 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. This Declaration of Trust may be executed in one or more counterparts.

     6. The number of Trustees initially shall be three 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
Business 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. Any Trustee may resign upon 30 days' prior written notice to the
Depositor.

                                        2


     7. The Delaware Trustee shall be a Trustee hereunder for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Statutory
Trust Act.

     8. This Declaration of Trust shall be governed by and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).

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

                                         FUND AMERICAN COMPANIES, INC.,
                                         as Depositor

                                                By: /s/ Reid T. Campbell
                                                   ----------------------------
                                                   Name:  Reid T. Campbell
                                                   Title: Vice President

                                         Bank One Delaware, Inc.,
                                         as Delaware Trustee

                                                By: /s/ Melissa Weisman
                                                   ----------------------------
                                                   Name:  Melissa Weisman
                                                   Title: Vice President

                                                  /s/ Reid T. Campbell
                                         --------------------------------------
                                         as Regular Trustee
                                         Name: Reid T. Campbell
                                         Title:

                                                  /s/ Dennis R. Smith
                                         --------------------------------------
                                         as Regular Trustee
                                         Name: Dennis R. Smith
                                         Title:

                                        3



                                                                    EXHIBIT 4.11

                  AMENDED AND RESTATED DECLARATION OF TRUST OF
                             Fund American Trust II

     THIS AMENDED AND RESTATED DECLARATION OF TRUST, dated as of June 26, 2003,
among Fund American Companies, Inc., as Depositor (the "Depositor"), Bank One
Delaware, Inc., not in its individual capacity but solely as trustee (the
"Delaware Trustee",) and Reid T. Campbell and Dennis R. Smith, as trustees (the
"Regular Trustees" and collectively with the Delaware Trustee, the "Trustees")
amends and restates in entirety the Declaration of Trust, dated as of October
30, 2001, by and among the parties hereto, pursuant to which a certificate of
trust was filed with the Secretary of State of the State of Delaware. The
Depositor and the Trustees hereby agree as follows:

     1. The trust continued hereby (the "Trust") shall be known as "Fund
American Trust II", in which name the Trustees, 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 has assigned, transferred, conveyed and set over to the
Trustees the sum of $10. The Trustees have acknowledged receipt of such amount
in trust from the Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the trust estate in
trust for the Depositor. It is the intention of the parties hereto that the
Trust continued 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.

     3. The Depositor and Trustees will enter into a second amended and restated
Declaration of Trust, satisfactory to each such party and substantially in the
form to be included as an Exhibit to a 1933 Act Registration Statement referred
to below, to provide for the contemplated operation of the Trust created hereby
and the issuance by such Trust of the Preferred Securities and common securities
referred to therein. Prior to the execution and delivery of such second amended
and restated Declaration of Trust, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.

     4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) one or more Registration Statements on Form S-3 (each, a "1933
Act Registration Statement"), including any pre-effective or post-effective
amendments to any such 1933 Act Registration Statement, 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) one or more Registration Statements on Form
8-A (each, a "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 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 an
Underwriting Agreement relating to the Preferred Securities, among the Trust,
the Depositor and the several Underwriters named therein, substantially in the
form to be included as an Exhibit to a 1933 Act Registration Statement. In the
event that any filing referred to in clauses (i) through (iii) above is required
by the rules and regulations of the Commission, the Exchange or any other
national stock exchange or state securities or blue sky laws, to be executed on
behalf of the Trust by the Trustees, any Regular Trustee, in his capacity as
Trustee of the Trust, is hereby authorized and directed to join in any such
filing and to execute on behalf of the Trust any and all of the foregoing, it
being understood that Bank One Delaware, Inc., in its capacity as Trustee of the
Trust, shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of the
Commission, the Exchange or any other national stock exchange or state
securities or blue sky laws. In connection with all of the foregoing, the
Depositor hereby constitutes and appoints Reid T. Campbell and Dennis R. Smith,
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 any 1933 Act
Registration Statement and any 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, thereby 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. This Declaration of Trust may be executed in one or more counterparts.

     6. The number of Trustees initially shall be three 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
Business 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. Any Trustee may resign upon 30 days' prior written notice to the
Depositor.

                                        2



     7. The Delaware Trustee shall be a Trustee hereunder for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Statutory
Trust Act.

     8. This Declaration of Trust shall be governed by and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).

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

                                         FUND AMERICAN COMPANIES, INC.,
                                         as Depositor

                                                By: /s/ Reid T. Campbell
                                                   ----------------------------
                                                   Name:  Reid T. Campbell
                                                   Title: Vice President

                                         Bank One Delaware, Inc.,
                                         as Delaware Trustee

                                                By: /s/ Melissa Weisman
                                                   ----------------------------
                                                   Name:  Melissa Weisman
                                                   Title: Vice President

                                                  /s/ Reid T. Campbell
                                         --------------------------------------
                                         as Regular Trustee
                                         Name: Reid T. Campbell
                                         Title:

                                                  /s/ Dennis R. Smith
                                         --------------------------------------
                                         as Regular Trustee
                                         Name: Dennis R. Smith
                                         Title:

                                        3



                                                                    EXHIBIT 4.12
                  AMENDED AND RESTATED DECLARATION OF TRUST OF
                            Fund American Trust III

     THIS AMENDED AND RESTATED DECLARATION OF TRUST, dated as of June 26, 2003,
among Fund American Companies, Inc., as Depositor (the "Depositor"), Bank One
Delaware, Inc., not in its individual capacity but solely as trustee (the
"Delaware Trustee",) and Reid T. Campbell and Dennis R. Smith, as trustees (the
"Regular Trustees" and collectively with the Delaware Trustee, the "Trustees")
amends and restates in entirety the Declaration of Trust, dated as of October
30, 2001, by and among the parties hereto, pursuant to which a certificate of
trust was filed with the Secretary of State of the State of Delaware. The
Depositor and the Trustees hereby agree as follows:

     1. The trust continued hereby (the "Trust") shall be known as "Fund
American Trust III", in which name the Trustees, 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 has assigned, transferred, conveyed and set over to the
Trustees the sum of $10. The Trustees have acknowledged receipt of such amount
in trust from the Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the trust estate in
trust for the Depositor. It is the intention of the parties hereto that the
Trust continued 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.

     3. The Depositor and Trustees will enter into a second amended and restated
Declaration of Trust, satisfactory to each such party and substantially in the
form to be included as an Exhibit to a 1933 Act Registration Statement referred
to below, to provide for the contemplated operation of the Trust created hereby
and the issuance by such Trust of the Preferred Securities and common securities
referred to therein. Prior to the execution and delivery of such second amended
and restated Declaration of Trust, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to such
execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.

     4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) one or more Registration Statements on Form S-3 (each, a "1933
Act Registration Statement"), including any pre-effective or post-effective
amendments to any such 1933 Act Registration Statement, 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) one or more Registration Statements on Form
8-A (each, a "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 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 an
Underwriting Agreement relating to the Preferred Securities, among the Trust,
the Depositor and the several Underwriters named therein, substantially in the
form to be included as an Exhibit to a 1933 Act Registration Statement. In the
event that any filing referred to in clauses (i) through (iii) above is required
by the rules and regulations of the Commission, the Exchange or any other
national stock exchange or state securities or blue sky laws, to be executed on
behalf of the Trust by the Trustees, any Regular Trustee, in his capacity as
Trustee of the Trust, is hereby authorized and directed to join in any such
filing and to execute on behalf of the Trust any and all of the foregoing, it
being understood that Bank One Delaware, Inc., in its capacity as Trustee of the
Trust, shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of the
Commission, the Exchange or any other national stock exchange or state
securities or blue sky laws. In connection with all of the foregoing, the
Depositor hereby constitutes and appoints Reid T. Campbell and Dennis R. Smith,
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 any 1933 Act
Registration Statement and any 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, thereby 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. This Declaration of Trust may be executed in one or more counterparts.

     6. The number of Trustees initially shall be three 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
Business 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. Any Trustee may resign upon 30 days' prior written notice to the
Depositor.

                                        2



     7. The Delaware Trustee shall be a Trustee hereunder for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Statutory
Trust Act.

     8. This Declaration of Trust shall be governed by and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).

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

                                         FUND AMERICAN COMPANIES, INC.,
                                         as Depositor

                                                By: /s/ Reid T. Campbell
                                                   ----------------------------
                                                   Name:  Reid T. Campbell
                                                   Title: Vice President

                                         Bank One Delaware, Inc.,
                                         as Delaware Trustee

                                                By: /s/ Melissa Weisman
                                                   ----------------------------
                                                   Name:  Melissa Weisman
                                                   Title: Vice President

                                                  /s/ Reid T. Campbell
                                         --------------------------------------
                                         as Regular Trustee
                                         Name: Reid T. Campbell
                                         Title:

                                                  /s/ Dennis R. Smith
                                         --------------------------------------
                                         as Regular Trustee
                                         Name: Dennis R. Smith
                                         Title:

                                        3




                                                                    Exhibit 4.19

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

                                     FORM OF

                               GUARANTEE AGREEMENT

                                       OF

                              Fund American Trust I


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


                          Dated as of [               ]

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


                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
                                    ARTICLE I

Definitions                                                                    2

                                   ARTICLE II

                               TRUST INDENTURE ACT

SECTION 2.01.      Trust Indenture Act; Application                            5
SECTION 2.02.      Lists of Holders of Preferred
                      Securities                                               6
SECTION 2.03.      Reports by the Guarantee Trustee                            6
SECTION 2.04.      Periodic Reports to Guarantee
                      Trustee                                                  6
SECTION 2.05.      Evidence of Compliance with
                      Conditions Precedent                                     6
SECTION 2.06.      Events of Default; Waiver                                   6
SECTION 2.07.      Disclosure of Information                                   7
SECTION 2.08.      Conflicting Interest                                        7

                                   ARTICLE III

                 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

SECTION 3.01.      Powers and Duties of the Guarantee
                      Trustee                                                  7
SECTION 3.02.      Certain Rights and Duties of the
                      Guarantee Trustee                                        8
SECTION 3.03.      Not Responsible for Recitals or
                      Issuance of Guarantee                                   11


                                ARTICLE IV

                             GUARANTEE TRUSTEE

SECTION 4.01.      Qualifications                                             11
SECTION 4.02.      Appointment, Removal and Resignation
                      of Guarantee Trustee                                    12

                                                                               3


                                    ARTICLE V

                                    GUARANTEE

SECTION 5.01.      Guarantee                                                  13
SECTION 5.02.      Waiver of Notice                                           13
SECTION 5.03.      Obligations Not Affected                                   14
SECTION 5.04.      Enforcement of Guarantee                                   15
SECTION 5.05.      Guarantee of Payment                                       15
SECTION 5.06.      Subrogation                                                15
SECTION 5.07.      Independent Obligations                                    16

                                   ARTICLE VI

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.01.      Limitation of Transactions                                 16
SECTION 6.02.      Subordination                                              17

                                   ARTICLE VII

Termination                                                                   17

                                  ARTICLE VIII

                    LIMITATION OF LIABILITY; INDEMNIFICATION

SECTION 8.01.      Exculpation                                                18
SECTION 8.02.      Indemnification                                            18

                                   ARTICLE IX

                                  MISCELLANEOUS

SECTION 9.01.      Successors and Assigns                                     19
SECTION 9.02.      Amendments                                                 19
SECTION 9.03.      Notices                                                    19
SECTION 9.04.      Genders                                                    20


                                                                               4


SECTION 9.05.      Benefit                                                    20
SECTION 9.06.      Governing Law                                              20
SECTION 9.07.      Counterparts                                               20
SECTION 9.08.      Exercise of Overallotment Option                           20

                                                                               5


                        GUARANTEE AGREEMENT dated as of [    ], between [White
                  Mountains Insurance Group, Ltd./Fund American Companies,
                  Inc.], a company existing under the laws of [       ] (the
                  "Guarantor"), and Bank One, National Association, as the
                  initial Guarantee Trustee (as defined herein) for the benefit
                  of the Holders (as defined herein) from time to time of the
                  Preferred Securities (as defined herein) of Fund American
                  Trust I, a Delaware business trust (the "Issuer").

            WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration") dated as of [    ], among the trustees named therein, Fund
American Companies, Inc., as Sponsor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer may issue
up to $[ ] aggregate liquidation amount of its [   ]% Trust Preferred Securities
(the "Preferred Securities") representing preferred undivided beneficial
interests in the assets of the Issuer and having the terms set forth in Exhibit
B to the Declaration, of which $[    ] aggregate liquidation amount of Preferred
Securities are being issued as of the date hereof by the Issuer pursuant to the
Underwriting Agreement (as defined in the Declaration); and

            WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders 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 the initial
purchasers thereof 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.

                                    ARTICLE I

                                   DEFINITIONS

            (a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble above have the respective meanings assigned to them in
this Article I.

            (b) A term defined anywhere in this Guarantee


                                                                               6


Agreement has the same meaning throughout.

            (c) All references to "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.

            "Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule thereunder.

            "Commission" means the Securities and Exchange Commission.

            "Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer, having the terms set
forth in Exhibit C to the Declaration.

            "Covered Person" means any Holder.

            "Debentures" means the series of Junior Subordinated Debentures
issued by the Guarantor under the Indenture to the Property Trustee and entitled
the "[    ]% Junior Subordinated Debentures due [    ]".

            "Distributions" has the meaning set forth in Exhibit B to the
Declaration.

            "Event of Default" means a default by the Guarantor on any of its
payment or other obligations under


                                                                               7


this Guarantee Agreement; PROVIDED, HOWEVER, that except with respect to such a
default resulting from a failure to pay any Guarantee Payment, such default
shall have continued for more than 30 days.

            "Guarantee Payments" shall mean the following Distributions and
other payments, without duplication, with respect to the Preferred Securities,
to the extent not made or paid by the Issuer: (i) any accrued and unpaid
Distributions that are required to be paid on the Preferred Securities, but only
if and to the extent that in each case the Guarantor has made a payment to the
Property Trustee of interest on the Debentures, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), with respect to any Preferred Securities called for
redemption by the Issuer, but only if and to the extent that in each case the
Guarantor has made a payment to the Property Trustee of interest or principal on
the Debentures, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to Holders or the redemption of all the Preferred
Securities upon the maturity or redemption of the Debentures as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Issuer has funds available therefor, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
upon liquidation of the Issuer (in either case, the "Liquidation Distribution").

            "Guarantee Trustee" means Bank One, National Association, until a
Successor Guarantee Trustee has been appointed and accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.

            "Holder" shall mean 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


                                                                               8


Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any entity directly or indirectly controlling
or controlled by or under direct or indirect common control with the Guarantor.

            "Indemnified Person" means the Guarantee Trustee, any Affiliate of
the Guarantee Trustee, and any officers, directors, shareholders, members,
partners, employees, representatives or agents of the Guarantee Trustee.

            "Indenture" means the Junior Subordinated Debenture Indenture dated
as of [    ], between the Guarantor and Bank One, National Association, as
trustee, as amended and supplemented from time to time, pursuant to which the
Debentures are to be issued.

            "Investment Company" means an investment company as defined in the
Investment Company Act.

            "Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.

            "Liquidation Distribution" has the meaning set forth in the
definition of Guarantee Payments.

            "Majority in liquidation amount of the Preferred Securities" means,
except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class who are the
record owners of Preferred Securities whose aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) represents more than 50% of the aggregate
liquidation amount of all outstanding Preferred Securities.

            "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.

                                                                               9


            "Preferred Securities" has the meaning set forth in the first
WHEREAS clause above.

            "Property Trustee" means the Person acting as Property Trustee under
the Declaration.

            "Redemption Price" has the meaning set forth in the definition of
Guarantee Payments.

            "Responsible Officer" means, with respect to the Guarantee Trustee,
any officer of the Guarantee Trustee with responsibility for the administration
of this Guarantee Agreement 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.

            "66-2/3% in liquidation amount of the Preferred Securities" means,
except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class who are the
record owners of Preferred Securities whose aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) represents 66-2/3% or more of the aggregate
liquidation amount of all outstanding Preferred Securities.

            "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as a Guarantee Trustee under Section 4.01.

            "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.

                                   ARTICLE II

                               TRUST INDENTURE ACT

                                                                              10


            SECTION 2.01. 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 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.

            (c) The application of the Trust Indenture Act to this Guarantee
Agreement shall not affect the nature of the Preferred Securities as equity
securities representing preferred undivided beneficial interests in the assets
of the Issuer.

            SECTION 2.02. LISTS OF HOLDERS OF PREFERRED SECURITIES. (a) The
Guarantor shall provide the Guarantee Trustee with such information as is
required under Section 312(a) of the Trust Indenture Act at the times and in the
manner provided in Section 312(a).

            (b) The Guarantee Trustee shall comply with its obligations under
Sections 310(b), 311 and 312(b) of the Trust Indenture Act.

            SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days after
May 15 of each year, the Guarantee Trustee shall provide to the Holders such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form, in the manner and at the times provided by Section 313 of the Trust
Indenture Act. The Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.

            SECTION 2.04. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE. The
Guarantor shall provide to the Guarantee Trustee, the Commission and the
Holders, as applicable, such documents, reports and information as required by
Section 314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by


                                                                              11


Section 314(a)(4) and (c) of the Trust Indenture Act, any such certificates to
be provided in the form, in the manner and at the times required by Section
314(a)(4) and (c) of the Trust Indenture Act (PROVIDED that any certificate to
be provided pursuant to Section 314(a)(4) of the Trust Indenture Act shall be
provided within 120 days of the end of each fiscal year of the Issuer).

            SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide the Guarantee Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Guarantee Agreement which
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given pursuant to Section 314(c)
of the Trust Indenture Act shall comply with Section 314(e) of the Trust
Indenture Act.

            SECTION 2.06. EVENTS OF DEFAULT; WAIVER. (a) Subject to Section
2.06(b), Holders may, by vote of at least a Majority in liquidation amount of
the Preferred Securities, (A) direct 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, or (B) on behalf of the
Holders of all Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any 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 Guarantee Agreement, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.

            (b) The right of any Holder to receive payment of the Guarantee
Payments in accordance with this Guarantee Agreement, or to institute suit for
the enforcement of any such payment, shall not be impaired without the consent
of each such Holder.

            SECTION 2.07. DISCLOSURE OF INFORMATION. The disclosure of
information as to the names and addresses of the Holders in accordance with
Section 312 of the Trust Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of any existing
law or any law hereafter enacted


                                                                              12


which does not specifically refer to Section 312 of the Trust Indenture Act, nor
shall the Guarantee Trustee be held accountable by reason of mailing any
material pursuant to a request made under Section 312(b) of the Trust Indenture
Act.

            SECTION 2.08. CONFLICTING INTEREST. The Declaration shall be deemed
to be specifically described in this Guarantee Agreement for the purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.

                                   ARTICLE III

                 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

            SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee in trust for the
benefit of the Holders. The Guarantee Trustee shall not transfer its right,
title and interest in this Guarantee Agreement to any Person except a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Guarantee Trustee or to a Holder exercising his or her
rights pursuant to Section 5.04. The right, title and interest of the Guarantee
Trustee to this Guarantee Agreement shall vest automatically in each Person who
may hereafter be appointed as Guarantee Trustee in accordance with Article IV.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.

            (b) If an Event of Default occurs and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.

            (c) This Guarantee Agreement and all moneys received by the Property
Trustee hereunder in respect of the Guarantee Payments will not be subject to
any right, charge, security interest, lien or claim of any kind in favor of or
for the benefit of the Guarantee Trustee or its agents or


                                                                              13


their creditors.

            (d) 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, as their names and addresses appear upon the register, notice of all
Events of Default known to the Guarantee Trustee, unless such Events of Default
shall have been cured before the giving of such notice; PROVIDED that, 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. The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default except any Event of Default as to which the Guarantee Trustee
shall have received written notice or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice.

            (e) The Guarantee Trustee shall not resign as a Trustee unless a
Successor Guarantee Trustee has been appointed and accepted that appointment in
accordance with Article IV.

            SECTION 3.02. CERTAIN RIGHTS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) The Guarantee Trustee, before the occurrence of an Event of Default and
after the curing or waiving 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 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 2.06(a)),
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 their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

            (b) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent


                                                                              14


action, its own negligent failure to act or its own wilful misconduct, except
that:

            (i) prior to the occurrence of an Event of Default and after the
      curing or waiving of all 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 no implied covenants or
            obligations shall be read into this Guarantee Agreement against the
            Guarantee Trustee; and

                  (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 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 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;

            (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 as provided herein relating to the time,
      method and place of conducting any proceeding for any remedy


                                                                              15


      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 it shall have reasonable
      ground 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.

            (c) Subject to the provisions of Section 3.02(a) and (b):

            (i) whenever in the administration of this Guarantee Agreement, the
      Guarantee Trustee shall deem it desirable that a matter be proved or
      established prior to taking, suffering or omitting any action hereunder,
      the Guarantee Trustee (unless other evidence is herein specifically
      prescribed) may, in the absence of bad faith on its part and, if the Trust
      is excluded from the definition of Investment Company solely by reason of
      Rule 3a-7 under the Investment Company Act ("Rule 3a-7"), subject to the
      requirements of Rule 3a-7, request and rely upon a certificate, which
      shall comply with the provisions of Section 314(e) of the Trust Indenture
      Act, signed by any authorized officer of the Guarantor;

            (ii) the Guarantee Trustee (A) may consult with counsel (which may
      be counsel to the Guarantor or any of its Affiliates and may include any
      of its employees) selected by it in good faith and with due care and the
      written advice or opinion of such counsel with respect to legal matters
      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 and opinion and (B)
      shall have the right at any time to seek instructions concerning the
      administration of this Guarantee Agreement from any court of competent
      jurisdiction;

                                                                              16


            (iii) the Guarantee 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 Guarantee Trustee shall not be responsible for
      any misconduct or negligence on the part of any agent or attorney
      appointed by it in good faith and with due care;

            (iv) 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 Holders, unless such Holders shall have
      offered to the Guarantee Trustee reasonable security and indemnity against
      the costs, expenses (including attorneys' fees and expenses) and
      liabilities that might be incurred by it in complying with such request or
      direction; PROVIDED that nothing contained in this clause (iv) shall
      relieve the Guarantee Trustee of the obligation, upon the occurrence of an
      Event of Default (which has not been cured or waived) to exercise such of
      the rights and powers vested in it by this Guarantee Agreement, and to use
      the same degree of care and skill in such exercise, as a prudent person
      would exercise or use under the circumstances in the conduct of his or her
      own affairs; and

            (v) any action taken by the Guarantee Trustee or its agents
      hereunder shall bind the Holders and the signature of the Guarantee
      Trustee or its agents alone shall be sufficient and effective to perform
      any such action; and no third party shall be required to inquire as to the
      authority of the Guarantee Trustee to so act, or as to its compliance with
      any of the terms and provisions of this Guarantee Agreement, both of which
      shall be conclusively evidenced by the Guarantee Trustee's or its agent's
      taking such action.

            SECTION 3.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee Agreement shall be taken as the
statements of the Guarantor and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee


                                                                              17


makes no representations as to the validity or sufficiency of this Guarantee
Agreement.

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

            SECTION 4.01. QUALIFICATIONS. (a) There shall at all times be a
Guarantee Trustee which shall:

            (i) not be an Affiliate of the Guarantor;

            (ii) be a corporation organized and doing business under the laws of
      the United States of America or any State or Territory thereof or of the
      District of Columbia, or a corporation or Person permitted by the
      Commission to act as an institutional trustee under the Trust Indenture
      Act, authorized under such laws to exercise corporate trust powers, having
      a combined capital and surplus of at least $50,000,000, and subject to
      supervision or examination by Federal, State, Territorial or District of
      Columbia authority. If such corporation publishes reports of condition at
      least annually, pursuant to law or to the requirements of the supervising
      or examining authority referred to above, then for the purposes of this
      Section 4.01(a)(ii), 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; and

            (iii) if the Trust is excluded from the definition of an Investment
      Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7 requires
      a trustee having certain qualifications to hold title to the "eligible
      assets" (as defined in Rule 3a-7) of the Trust, possess those
      qualifications.

            If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i),(ii) and (iii) above, the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02. If
the Guarantee Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and
the Guarantor shall


                                                                              18


in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.

            SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE. (a) Subject to Section 4.02(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 in accordance with
Section 4.02(a) until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by written instrument executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
Guarantee Trustee being removed.

            (c) The Guarantee Trustee appointed to office shall hold office
until its successor shall have been appointed and until its removal or
resignation.

            (d) The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument (a "Resignation Request") in
writing signed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; PROVIDED, HOWEVER, that no such resignation of the Guarantee
Trustee shall be effective until: (i) a Successor Guarantee Trustee possessing
the qualifications to act as Guarantee Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee; or (ii) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the Holders, if the Trust is
excluded from the definition of an Investment Company solely by reason of Rule
3a-7.

            (e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of a Resignation Request, the resigning Guarantee
Trustee


                                                                              19


may petition any court of competent jurisdiction for appointment of a Successor
Guarantee Trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a Successor Guarantee Trustee.

                                    ARTICLE V

                                    GUARANTEE

            SECTION 5.01. GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), regardless of
any defense, right of set-off or counterclaim that 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 5.02. WAIVER OF NOTICE. The Guarantor hereby waives notice
of acceptance of this 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 Issuer or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and, to the extent permitted by law, all other notices and
demands.

            SECTION 5.03. 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


                                                                              20


      period on the Debentures), 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;

            (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 circumstances whatsoever that might otherwise
      constitute a legal or equitable discharge or defense of a guarantor, it
      being the intent of this Section 5.03 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 consent of, the Guarantor with respect to the happening of any of the
foregoing.

            SECTION 5.04. ENFORCEMENT OF GUARANTEE. The Guarantor and the
Guarantee Trustee expressly acknowledge 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


                                                                              21


Guarantee Agreement on behalf of the Holders; (iii) Holders representing not
less than a Majority in liquidation amount of the Preferred Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available in respect of this Guarantee Agreement, including the giving of
directions to the Guarantee Trustee, or exercising any trust or other power
conferred upon the Guarantee Trustee under this Guarantee Agreement, and (iv) if
the Guarantee Trustee fails to enforce this Guarantee Agreement, 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 Issuer, the Guarantee Trustee or any other Person.
Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee
Payment, a Holder of Preferred Securities may directly institute a proceeding
against the Guarantor for enforcement of such Holder's right to receive payment
under the Guarantee. The Guarantor waives any right or remedy to require that
any action be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.

            SECTION 5.05. GUARANTEE OF PAYMENT. This Guarantee Agreement creates
a guarantee of payment and not merely 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).

            SECTION 5.06. SUBROGATION. The Guarantor shall be subrogated to all
rights, if any, of the Holders against the Issuer in respect of any amounts paid
to the Holders by the Guarantor under this Guarantee Agreement; 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


                                                                              22


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 5.07. 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 5.03.

                                   ARTICLE VI

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

            SECTION 6.01. LIMITATION OF TRANSACTIONS. So long as any Preferred
Securities remain outstanding, the Guarantor will not declare or pay any
dividends on, or redeem, purchase, acquire or make a distribution or liquidation
payment with respect to, any of its common stock or preferred stock or make any
guarantee payment with respect thereto if at such time (i) the Guarantor shall
be in default with respect to its Guarantee Payments or other payment
obligations hereunder, (ii) there shall have occurred any Event of Default (as
defined in the Declaration) or (iii) the Guarantor shall have given notice of
its selection of an extension period (as defined in the Indenture) and such
period, or any extension thereof, is continuing; PROVIDED, HOWEVER, that the
foregoing restrictions will not apply to (i) dividends, redemptions, purchases,
acquisitions, distributions or payments made by the Guarantor by way of issuance
of shares of its capital stock, (ii) payments of accrued dividends by the
Guarantor upon the redemption, exchange or conversion of any preferred stock of
the Guarantor as may be outstanding from time to time in accordance with the
terms of such preferred stock or (iii) cash payments made by the Guarantor in
lieu of delivering fractional shares upon the redemption, exchange or conversion
of any preferred stock of the Guarantor as may be outstanding from time to time
in accordance with the terms of such preferred stock. In addition, so long as
any

                                                                              23


Preferred Securities remain outstanding, the Guarantor (i) will remain the sole
direct or indirect owner of all the outstanding Common Securities and shall not
cause or permit the Common Securities to be transferred except to the extent
such transfer is permitted under Section 9.01(c) of the Declaration; PROVIDED
that any permitted successor of the Guarantor under the Indenture may succeed to
the Guarantor's ownership of the Common Securities; and (ii) will use reasonable
efforts to cause the Issuer to continue to be treated as a grantor trust for
United States Federal income tax purposes, except in connection with a
distribution of Debentures as provided in the Declaration.

            SECTION 6.02. SUBORDINATION. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other indebtedness,
liabilities and obligations of the Guarantor and any guarantees, endorsements or
other contingent obligations of the Guarantor in respect of such indebtedness,
liabilities or obligations, including the Debentures, except those made PARI
PASSU or subordinate by their terms, and (ii) senior to all capital stock now or
hereafter issued by the Guarantor and to any guarantee now or hereafter entered
into by the Guarantor in respect of any of its capital stock. The Guarantor's
obligations under this Guarantee Agreement will rank PARI PASSU with respect to
obligations under other guarantee agreements which it may enter into from time
to time to the extent that such agreements shall be entered into in
substantially the form hereof and provide for comparable guarantees by the
Guarantor of payment on preferred securities issued by other business trusts of
which the Guarantor holds the common securities.

                                   ARTICLE VII

                                   TERMINATION

            This Guarantee Agreement shall terminate and be of no further force
and effect upon full payment of the Redemption Price of all Preferred
Securities, or upon the


                                                                              24


distribution of Debentures to Holders in exchange for all the Preferred
Securities, or upon full payment of the amounts payable in accordance with the
Declaration 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 the Preferred Securities or this Guarantee Agreement.

                                  ARTICLE VIII

                    LIMITATION OF LIABILITY; INDEMNIFICATION

            SECTION 8.01. EXCULPATION. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Guarantor or
any Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Indemnified Person in good faith and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Guarantee Agreement
or by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
wilful misconduct with respect to such acts or omissions.

            (b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of assets,
liabilities, profits, losses or any other facts pertinent to the existence and
amounts of assets from which Distributions to Holders might properly be paid.

            SECTION 8.02. INDEMNIFICATION. (a) To the fullest extent permitted
by applicable law, the Guarantor shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage or claim incurred by such
Indemnified Person by reason of any act or omission performed or omitted by such
Indemnified Person in good


                                                                              25


faith and in a manner such Indemnified Person reasonably believed to be within
the scope of authority conferred on such Indemnified Person by this Guarantee
Agreement, except that no Indemnified Person shall be entitled to be indemnified
in respect of any loss, damage or claim incurred by such Indemnified Person by
reason of negligence or wilful misconduct with respect to such acts or
omissions.

            (b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.02(a).

                                   ARTICLE IX

                                  MISCELLANEOUS

            SECTION 9.01. SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assignees,
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 conveyance, transfer or lease of
assets involving the Guarantor that is permitted under Article Ten of the
Indenture, the Guarantor shall not assign its obligations hereunder.

            SECTION 9.02. AMENDMENTS. Except with respect to any changes which
do not adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than 66-2/3% in liquidation amount of
the Preferred Securities. The provisions of Section 12.02 of the Declaration
concerning


                                                                              26


meetings of Holders shall apply to the giving of such approval.

            SECTION 9.03 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:

                  [                            ]
                  [                            ]
                  [                            ]
                  Facsimile No.: [(   )       ]
                  Attention: [            ]

            (b) if given to the Guarantee Trustee, to the address set forth
      below or such other address as the Guarantee Trustee may give notice of to
      the Holders:

                  [              ]
                  [              ]
                  [              ]
                  Facsimile No.:  [(   )       ]
                  Attention: [                 ]

            (c) if given to any Holder of Preferred Securities, 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.

                                                                              27


            SECTION 9.04. GENDERS. The masculine, feminine and neuter genders
used herein shall include the masculine, feminine and neuter genders.

            SECTION 9.05. BENEFIT. This Guarantee Agreement is solely for the
benefit of the Holders and, subject to Section 3.01(a), is not separately
transferable from the Preferred Securities.

            SECTION 9.06. 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 PRINCIPLES OF CONFLICTS OF LAWS).

            SECTION 9.07. COUNTERPARTS. This Guarantee Agreement may be executed
in counterparts, each of which shall be an original; but such counterparts shall
together constitute one and the same instrument.

            SECTION 9.08. EXERCISE OF OVERALLOTMENT OPTION. If and to the extent
that Preferred Securities are issued by the Issuer upon exercise of the
overallotment option referred to in the first WHEREAS clause, the Guarantor
agrees to give prompt notice thereof to the Guarantee Trustee, but the failure
to give such notice shall not relieve the Guarantor of any of its obligations
hereunder.

            This Guarantee Agreement is executed as of the day and year first
above written.


                           [                                    ]

                             by
                               --------------------------------
                                 Name:
                                 Title:


                           BANK ONE NATIONAL ASSOCIATION,
                           as Guarantee Trustee

                                                                              28


                             by
                               --------------------------------
                                 Name:
                                 Title:




                                                                    Exhibit 4.20

                          [Form of Guarantee Agreement]
================================================================================


                               GUARANTEE AGREEMENT


                                       OF


                             Fund American Trust II


                                 _______________


                               Dated as of [    ]


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


                                TABLE OF CONTENTS


                                                                            PAGE
                                                                            ----
                                    ARTICLE I

Definitions                                                                    2

                                   ARTICLE II

                              TRUST INDENTURE ACT

SECTION 2.01.      Trust Indenture Act; Application                            5
SECTION 2.02.      Lists of Holders of Preferred
                     Securities                                                6
SECTION 2.03.      Reports by the Guarantee Trustee                            6
SECTION 2.04.      Periodic Reports to Guarantee
                     Trustee                                                   6
SECTION 2.05.      Evidence of Compliance with
                     Conditions Precedent                                      6
SECTION 2.06.      Events of Default; Waiver                                   6
SECTION 2.07.      Disclosure of Information                                   7
SECTION 2.08.      Conflicting Interest                                        7

                                   ARTICLE III

                 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

SECTION 3.01.      Powers and Duties of the Guarantee
                     Trustee                                                   7
SECTION 3.02.      Certain Rights and Duties of the
                     Guarantee Trustee                                         8
SECTION 3.03.      Not Responsible for Recitals or
                     Issuance of Guarantee                                    11

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

SECTION 4.01.      Qualifications                                             11
SECTION 4.02.      Appointment, Removal and Resignation
                     of Guarantee Trustee                                     12


                                                                               3


                                    ARTICLE V

                                    GUARANTEE

SECTION 5.01.      Guarantee                                                  13
SECTION 5.02.      Waiver of Notice                                           13
SECTION 5.03.      Obligations Not Affected                                   14
SECTION 5.04.      Enforcement of Guarantee                                   15
SECTION 5.05.      Guarantee of Payment                                       15
SECTION 5.06.      Subrogation                                                15
SECTION 5.07.      Independent Obligations                                    16

                                   ARTICLE VI

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.01.      Limitation of Transactions                                 16
SECTION 6.02.      Subordination                                              17

                                   ARTICLE VII

Termination                                                                   17

                                  ARTICLE VIII

                    LIMITATION OF LIABILITY; INDEMNIFICATION

SECTION 8.01.      Exculpation                                                18
SECTION 8.02.      Indemnification                                            18

                                   ARTICLE IX

                                  MISCELLANEOUS

SECTION 9.01.      Successors and Assigns                                     19
SECTION 9.02.      Amendments                                                 19
SECTION 9.03.      Notices                                                    19
SECTION 9.04.      Genders                                                    20


                                                                               4


SECTION 9.05.      Benefit                                                    20
SECTION 9.06.      Governing Law                                              20
SECTION 9.07.      Counterparts                                               20
SECTION 9.08.      Exercise of Overallotment Option                           20


                                                                               5


                                [Form of]

                        GUARANTEE AGREEMENT dated as of [    ], between [White
                  Mountains Insurance Group, Ltd./Fund American Companies,
                  Inc.], a company existing under the laws of [       ] (the
                  "Guarantor"), and Bank One, National Association, as the
                  initial Guarantee Trustee (as defined herein) for the benefit
                  of the Holders (as defined herein) from time to time of the
                  Preferred Securities (as defined herein) of Fund American
                  Trust II, a Delaware business trust (the "Issuer").


            WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration") dated as of [    ], among the trustees named therein, Fund
American Companies, Inc., a Delaware corporation ("Fund American"), as Sponsor,
and the Holders from time to time of undivided beneficial interests in the
assets of the Issuer, the Issuer may issue up to $[    ] aggregate liquidation
amount of its [    ]% Trust Preferred Securities (the "Preferred Securities")
representing preferred undivided beneficial interests in the assets of the
Issuer and having the terms set forth in Exhibit B to the Declaration, of which
$[    ] aggregate liquidation amount of Preferred Securities are being issued as
of the date hereof by the Issuer pursuant to the Underwriting Agreement (as
defined in the Declaration); and

            WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders 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 the initial
purchasers thereof 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.

                                    ARTICLE I

                                   DEFINITIONS

            (a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble above have the


                                                                               6


respective meanings assigned to them in this Article I.

            (b) A term defined anywhere in this Guarantee Agreement has the same
meaning throughout.

            (c) All references to "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.

            "Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule thereunder.

            "Commission" means the Securities and Exchange Commission.

            "Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer, having the terms set
forth in Exhibit C to the Declaration.

            "Covered Person" means any Holder.

            "Debentures" means the series of Junior Subordinated Debentures
issued by Fund American under the Indenture to the Property Trustee entitled the
"[    ]% Junior Subordinated Debentures due [    ]" which have been guaranteed
by the Guarantor.

            "Distributions" has the meaning set forth in


                                                                               7


Exhibit B to the Declaration.

            "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 such a default resulting from a failure to pay any
Guarantee Payment, such default shall have continued for more than 30 days.

            "Guarantee Payments" shall mean the following Distributions and
other payments, without duplication, with respect to the Preferred Securities,
to the extent not made or paid by the Issuer: (i) any accrued and unpaid
Distributions that are required to be paid on the Preferred Securities, but only
if and to the extent that in each case Fund American or the Guarantor has made a
payment to the Property Trustee of interest on the Debentures, (ii) the
redemption price, including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), with respect to any Preferred Securities
called for redemption by the Issuer, but only if and to the extent that in each
case Fund American or the Guarantor has made a payment to the Property Trustee
of interest or principal on the Debentures, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to Holders or the redemption of
all the Preferred Securities upon the maturity or redemption of the Debentures
as provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent the Issuer has funds available
therefor, and (b) the amount of assets of the Issuer remaining available for
distribution to Holders upon liquidation of the Issuer (in either case, the
"Liquidation Distribution").

            "Guarantee Trustee" means Bank One, National Association, until a
Successor Guarantee Trustee has been appointed and accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.


                                                                               8


            "Holder" shall mean 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 or any entity directly or indirectly controlling
or controlled by or under direct or indirect common control with the Guarantor.

            "Indemnified Person" means the Guarantee Trustee, any Affiliate of
the Guarantee Trustee, and any officers, directors, shareholders, members,
partners, employees, representatives or agents of the Guarantee Trustee.

            "Indenture" means the Junior Subordinated Debenture Indenture dated
as of [    ], between the Guarantor, Fund American and Bank One, National
Association, as trustee, as amended and supplemented from time to time, pursuant
to which the Debentures are to be issued.

            "Investment Company" means an investment company as defined in the
Investment Company Act.

            "Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.

            "Liquidation Distribution" has the meaning set forth in the
definition of Guarantee Payments.

            "Majority in liquidation amount of the Preferred Securities" means,
except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class who are the
record owners of Preferred Securities whose aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) represents more than 50% of the aggregate
liquidation amount of all outstanding Preferred Securities.

            "Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture,


                                                                               9


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.

            "Preferred Securities" has the meaning set forth in the first
WHEREAS clause above.

            "Property Trustee" means the Person acting as Property Trustee under
the Declaration.

            "Redemption Price" has the meaning set forth in the definition of
Guarantee Payments.

            "Responsible Officer" means, with respect to the Guarantee Trustee,
any officer of the Guarantee Trustee with responsibility for the administration
of this Guarantee Agreement 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.

            "66-2/3% in liquidation amount of the Preferred Securities" means,
except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class who are the
record owners of Preferred Securities whose aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) represents 66-2/3% or more of the aggregate
liquidation amount of all outstanding Preferred Securities.

            "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as a Guarantee Trustee under Section 4.01.

            "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.


                                                                              10


                                   ARTICLE II

                               TRUST INDENTURE ACT

            SECTION 2.01. 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 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.

            (c) The application of the Trust Indenture Act to this Guarantee
Agreement shall not affect the nature of the Preferred Securities as equity
securities representing preferred undivided beneficial interests in the assets
of the Issuer.

            SECTION 2.02. LISTS OF HOLDERS OF PREFERRED SECURITIES. (a) The
Guarantor shall provide the Guarantee Trustee with such information as is
required under Section 312(a) of the Trust Indenture Act at the times and in the
manner provided in Section 312(a).

            (b) The Guarantee Trustee shall comply with its obligations under
Sections 310(b), 311 and 312(b) of the Trust Indenture Act.

            SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days after
May 15 of each year, the Guarantee Trustee shall provide to the Holders such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form, in the manner and at the times provided by Section 313 of the Trust
Indenture Act. The Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.

            SECTION 2.04. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE. The
Guarantor shall provide to the Guarantee


                                                                              11


Trustee, the Commission and the Holders, as applicable, such documents, reports
and information as required by Section 314(a)(1)-(3) (if any) of the Trust
Indenture Act and the compliance certificates required by Section 314(a)(4) and
(c) of the Trust Indenture Act, any such certificates to be provided in the
form, in the manner and at the times required by Section 314(a)(4) and (c) of
the Trust Indenture Act (PROVIDED that any certificate to be provided pursuant
to Section 314(a)(4) of the Trust Indenture Act shall be provided within 120
days of the end of each fiscal year of the Issuer).

            SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide the Guarantee Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Guarantee Agreement which
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given pursuant to Section 314(c)
of the Trust Indenture Act shall comply with Section 314(e) of the Trust
Indenture Act.

            SECTION 2.06. EVENTS OF DEFAULT; WAIVER. (a) Subject to Section
2.06(b), Holders may, by vote of at least a Majority in liquidation amount of
the Preferred Securities, (A) direct 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, or (B) on behalf of the
Holders of all Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any 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 Guarantee Agreement, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.

            (b) The right of any Holder to receive payment of the Guarantee
Payments in accordance with this Guarantee Agreement, or to institute suit for
the enforcement of any such payment, shall not be impaired without the consent
of each such Holder.

            SECTION 2.07. DISCLOSURE OF INFORMATION. The disclosure of
information as to the names and addresses of


                                                                              12


the Holders in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law or any law hereafter enacted which
does not specifically refer to Section 312 of the Trust Indenture Act, nor shall
the Guarantee Trustee be held accountable by reason of mailing any material
pursuant to a request made under Section 312(b) of the Trust Indenture Act.

            SECTION 2.08. CONFLICTING INTEREST. The Declaration shall be deemed
to be specifically described in this Guarantee Agreement for the purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.

                                   ARTICLE III

                 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

            SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee in trust for the
benefit of the Holders. The Guarantee Trustee shall not transfer its right,
title and interest in this Guarantee Agreement to any Person except a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Guarantee Trustee or to a Holder exercising his or her
rights pursuant to Section 5.04. The right, title and interest of the Guarantee
Trustee to this Guarantee Agreement shall vest automatically in each Person who
may hereafter be appointed as Guarantee Trustee in accordance with Article IV.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.

            (b) If an Event of Default occurs and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.

            (c) This Guarantee Agreement and all moneys


                                                                              13


received by the Property Trustee hereunder in respect of the Guarantee Payments
will not be subject to any right, charge, security interest, lien or claim of
any kind in favor of or for the benefit of the Guarantee Trustee or its agents
or their creditors.

            (d) 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, as their names and addresses appear upon the register, notice of all
Events of Default known to the Guarantee Trustee, unless such Events of Default
shall have been cured before the giving of such notice; PROVIDED that, 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. The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default except any Event of Default as to which the Guarantee Trustee
shall have received written notice or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice.

            (e) The Guarantee Trustee shall not resign as a Trustee unless a
Successor Guarantee Trustee has been appointed and accepted that appointment in
accordance with Article IV.

            SECTION 3.02. CERTAIN RIGHTS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) The Guarantee Trustee, before the occurrence of an Event of Default and
after the curing or waiving 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 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 2.06(a)),
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 their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.


                                                                              14


            (b) 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 wilful misconduct, except that:

            (i) prior to the occurrence of an Event of Default and after the
      curing or waiving of all 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 no implied covenants or
            obligations shall be read into this Guarantee Agreement against the
            Guarantee Trustee; and

                  (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 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 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;

            (iii) the Guarantee Trustee shall not be liable with


                                                                              15


      respect to any action taken or omitted to be taken by it in good faith in
      accordance with the direction of the Holders as provided herein 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 it shall have reasonable
      ground 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.

            (c) Subject to the provisions of Section 3.02(a) and (b):

            (i) whenever in the administration of this Guarantee Agreement, the
      Guarantee Trustee shall deem it desirable that a matter be proved or
      established prior to taking, suffering or omitting any action hereunder,
      the Guarantee Trustee (unless other evidence is herein specifically
      prescribed) may, in the absence of bad faith on its part and, if the Trust
      is excluded from the definition of Investment Company solely by reason of
      Rule 3a-7 under the Investment Company Act ("Rule 3a-7"), subject to the
      requirements of Rule 3a-7, request and rely upon a certificate, which
      shall comply with the provisions of Section 314(e) of the Trust Indenture
      Act, signed by any authorized officer of the Guarantor;

            (ii) the Guarantee Trustee (A) may consult with counsel (which may
      be counsel to the Guarantor or any of its Affiliates and may include any
      of its employees) selected by it in good faith and with due care and the
      written advice or opinion of such counsel with respect to legal matters
      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 and opinion


                                                                              16


      and (B) shall have the right at any time to seek instructions concerning
      the administration of this Guarantee Agreement from any court of competent
      jurisdiction;

            (iii) the Guarantee 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 Guarantee Trustee shall not be responsible for
      any misconduct or negligence on the part of any agent or attorney
      appointed by it in good faith and with due care;

            (iv) 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 Holders, unless such Holders shall have
      offered to the Guarantee Trustee reasonable security and indemnity against
      the costs, expenses (including attorneys' fees and expenses) and
      liabilities that might be incurred by it in complying with such request or
      direction; PROVIDED that nothing contained in this clause (iv) shall
      relieve the Guarantee Trustee of the obligation, upon the occurrence of an
      Event of Default (which has not been cured or waived) to exercise such of
      the rights and powers vested in it by this Guarantee Agreement, and to use
      the same degree of care and skill in such exercise, as a prudent person
      would exercise or use under the circumstances in the conduct of his or her
      own affairs; and

            (v) any action taken by the Guarantee Trustee or its agents
      hereunder shall bind the Holders and the signature of the Guarantee
      Trustee or its agents alone shall be sufficient and effective to perform
      any such action; and no third party shall be required to inquire as to the
      authority of the Guarantee Trustee to so act, or as to its compliance with
      any of the terms and provisions of this Guarantee Agreement, both of which
      shall be conclusively evidenced by the Guarantee Trustee's or its agent's
      taking such action.

            SECTION 3.03. NOT RESPONSIBLE FOR RECITALS OR


                                                                              17


ISSUANCE OF GUARANTEE. The recitals contained in this Guarantee Agreement shall
be taken as the statements of the Guarantor and the Guarantee Trustee does not
assume any responsibility for their correctness. The Guarantee Trustee makes no
representations as to the validity or sufficiency of this Guarantee Agreement.

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

            SECTION 4.01. QUALIFICATIONS. (a) There shall at all times be a
Guarantee Trustee which shall:

            (i) not be an Affiliate of the Guarantor;

            (ii) be a corporation organized and doing business under the laws of
      the United States of America or any State or Territory thereof or of the
      District of Columbia, or a corporation or Person permitted by the
      Commission to act as an institutional trustee under the Trust Indenture
      Act, authorized under such laws to exercise corporate trust powers, having
      a combined capital and surplus of at least $50,000,000, and subject to
      supervision or examination by Federal, State, Territorial or District of
      Columbia authority. If such corporation publishes reports of condition at
      least annually, pursuant to law or to the requirements of the supervising
      or examining authority referred to above, then for the purposes of this
      Section 4.01(a)(ii), 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; and

            (iii) if the Trust is excluded from the definition of an Investment
      Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7 requires
      a trustee having certain qualifications to hold title to the "eligible
      assets" (as defined in Rule 3a-7) of the Trust, possess those
      qualifications.

            If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i),(ii) and (iii) above, the Guarantee Trustee shall
immediately resign in the


                                                                              18


manner and with the effect set out in Section 4.02. If the Guarantee Trustee has
or shall acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Guarantee Trustee and the Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

            SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE. (a) Subject to Section 4.02(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 in accordance with
Section 4.02(a) until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by written instrument executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
Guarantee Trustee being removed.

            (c) The Guarantee Trustee appointed to office shall hold office
until its successor shall have been appointed and until its removal or
resignation.

            (d) The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument (a "Resignation Request") in
writing signed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; PROVIDED, HOWEVER, that no such resignation of the Guarantee
Trustee shall be effective until: (i) a Successor Guarantee Trustee possessing
the qualifications to act as Guarantee Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee; or (ii) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the Holders, if the Trust is
excluded from the definition of an Investment Company solely by reason of Rule
3a-7.


                                                                              19


            (e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of a Resignation Request, the resigning Guarantee
Trustee may petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after such notice, if
any, as it may deem proper and prescribe, appoint a Successor Guarantee Trustee.

                                    ARTICLE V

                                    GUARANTEE

            SECTION 5.01. GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), regardless of
any defense, right of set-off or counterclaim that 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 5.02. WAIVER OF NOTICE. The Guarantor hereby waives notice
of acceptance of this 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 Issuer or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and, to the extent permitted by law, all other notices and
demands.

            SECTION 5.03. 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;


                                                                              20


            (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), 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;

            (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 circumstances whatsoever that might otherwise
      constitute a legal or equitable discharge or defense of a guarantor, it
      being the intent of this Section 5.03 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 consent of, the Guarantor with respect to the happening of any of the
foregoing.

            SECTION 5.04. ENFORCEMENT OF GUARANTEE. The


                                                                              21


Guarantor and the Guarantee Trustee expressly acknowledge 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) Holders representing
not less than a Majority in liquidation amount of the Preferred Securities have
the right to direct the time, method and place of conducting any proceeding for
any remedy available in respect of this Guarantee Agreement, including the
giving of directions to the Guarantee Trustee, or exercising any trust or other
power conferred upon the Guarantee Trustee under this Guarantee Agreement, and
(iv) if the Guarantee Trustee fails to enforce this Guarantee Agreement, 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 Issuer, the Guarantee Trustee or any other Person.
Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee
Payment, a Holder of Preferred Securities may directly institute a proceeding
against the Guarantor for enforcement of such Holder's right to receive payment
under the Guarantee. The Guarantor waives any right or remedy to require that
any action be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.

            SECTION 5.05. GUARANTEE OF PAYMENT. This Guarantee Agreement creates
a guarantee of payment and not merely 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).

            SECTION 5.06. SUBROGATION. The Guarantor shall be subrogated to all
rights, if any, of the Holders against the Issuer in respect of any amounts paid
to the Holders by the Guarantor under this Guarantee Agreement; 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


                                                                              22


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 5.07. 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 5.03.

                                   ARTICLE VI

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

            SECTION 6.01. LIMITATION OF TRANSACTIONS. So long as any Preferred
Securities remain outstanding, the Guarantor will not declare or pay any
dividends on, or redeem, purchase, acquire or make a distribution or liquidation
payment with respect to, any of its common stock or preferred stock if at such
time (i) the Guarantor shall be in default with respect to its Guarantee
Payments or other payment obligations hereunder, (ii) there shall have occurred
any Event of Default (as defined in the Declaration) or (iii) the Guarantor
shall have given notice of its selection of an extension period (as defined in
the Indenture) and such period, or any extension thereof, is continuing;
PROVIDED, HOWEVER, that the foregoing restrictions will not apply to (i)
dividends, redemptions, purchases, acquisitions, distributions or payments made
by the Guarantor by way of issuance of shares of its capital stock, (ii)
declarations or payments of dividends in connection with the implementation of a
stockholders's rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
(iii) payments of accrued dividends by the Guarantor upon the redemption,
exchange or conversion


                                                                              23


of any preferred stock of the Guarantor as may be outstanding from time to time
in accordance with the terms of such preferred stock, (iv) cash payments made by
the Guarantor in lieu of delivering fractional shares upon the redemption,
exchange or conversion of any preferred stock of the Guarantor as may be
outstanding from time to time in accordance with the terms of such preferred
stock, (v) purchases or acquisitions of share of common stock in connection with
the satisfaction of obligations under any employee benefit plan or other
contractual obligation, (vi) dividends, distributions, redemptions, purchases,
acquisitions or payments as a result of a reclassification of capital stock or
conversion of one class or series of capital stock for another class or series
of capital stock.

            SECTION 6.02. SUBORDINATION. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other indebtedness,
liabilities and obligations of the Guarantor and any guarantees, endorsements or
other contingent obligations of the Guarantor in respect of such indebtedness,
liabilities or obligations, including the Debentures, except those made PARI
PASSU or subordinate by their terms, and (ii) senior to all capital stock now or
hereafter issued by the Guarantor and to any guarantee now or hereafter entered
into by the Guarantor in respect of any of its capital stock. The Guarantor's
obligations under this Guarantee Agreement will rank PARI PASSU with respect to
obligations under other guarantee agreements which it may enter into from time
to time to the extent that such agreements shall be entered into in
substantially the form hereof and provide for comparable guarantees by the
Guarantor of payment on preferred securities issued by other business trusts of
which the Guarantor holds the common securities.

                                   ARTICLE VII

                                   TERMINATION

            This Guarantee Agreement shall terminate and be of


                                                                              24


no further force and effect upon full payment of the Redemption Price of all
Preferred Securities, or upon the distribution of Debentures to Holders in
exchange for all the Preferred Securities, or upon full payment of the amounts
payable in accordance with the Declaration 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 the Preferred Securities
or this Guarantee Agreement.

                                  ARTICLE VIII

                    LIMITATION OF LIABILITY; INDEMNIFICATION

            SECTION 8.01. EXCULPATION. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Guarantor or
any Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Indemnified Person in good faith and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Guarantee Agreement
or by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
wilful misconduct with respect to such acts or omissions.

            (b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of assets,
liabilities, profits, losses or any other facts pertinent to the existence and
amounts of assets from which Distributions to Holders might properly be paid.

            SECTION 8.02. INDEMNIFICATION. (a) To the fullest extent permitted
by applicable law, the Guarantor shall indemnify and hold harmless each
Indemnified Person


                                                                              25


from and against any loss, damage or claim incurred by such Indemnified Person
by reason of any act or omission performed or omitted by such Indemnified Person
in good faith and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Guarantee Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or wilful misconduct with respect to such acts or
omissions.

            (b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.02(a).

                                   ARTICLE IX

                                  MISCELLANEOUS

            SECTION 9.01. SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assignees,
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 conveyance, transfer or lease of
assets involving the Guarantor that is permitted under Article Ten of the
Indenture, the Guarantor shall not assign its obligations hereunder.

            SECTION 9.02. AMENDMENTS. Except with respect to any changes which
do not adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Guarantee Agreement may only be amended with


                                                                              26


the prior approval of the Holders of not less than 66-2/3% in liquidation amount
of the Preferred Securities. The provisions of Section 12.02 of the Declaration
concerning meetings of Holders shall apply to the giving of such approval.

            SECTION 9.03 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:

                  [                                ]
                  [                                ]
                  [                                ]
                  Facsimile No.: [(   )       ]
                  Attention: [            ]

            (b) if given to the Guarantee Trustee, to the address set forth
      below or such other address as the Guarantee Trustee may give notice of to
      the Holders:

                  [              ]
                  [              ]
                  [              ]
                  Facsimile No.: [(   )        ]
                  Attention: [                 ]

            (c) if given to any Holder of Preferred Securities, 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


                                                                              27


shall be deemed to have been delivered on the date of such refusal or inability
to deliver.

            SECTION 9.04. GENDERS. The masculine, feminine and neuter genders
used herein shall include the masculine, feminine and neuter genders.

            SECTION 9.05. BENEFIT. This Guarantee Agreement is solely for the
benefit of the Holders and, subject to Section 3.01(a), is not separately
transferable from the Preferred Securities.

            SECTION 9.06. 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 PRINCIPLES OF CONFLICTS OF LAWS).

            SECTION 9.07. COUNTERPARTS. This Guarantee Agreement may be executed
in counterparts, each of which shall be an original; but such counterparts shall
together constitute one and the same instrument.

            SECTION 9.08. EXERCISE OF OVERALLOTMENT OPTION. If and to the extent
that Preferred Securities are issued by the Issuer upon exercise of any
overallotment option under the Underwriting Agreement (as defined in the
Declaration), the Guarantor agrees to give prompt notice thereof to the
Guarantee Trustee, but the failure to give such notice shall not relieve the
Guarantor of any of its obligations hereunder.

            This Guarantee Agreement is executed as of the day and year first
above written.


                                        [                           ]

                                        by
                                          ---------------------------------
                                          Name:
                                          Title:



                                        BANK ONE NATIONAL ASSOCIATION,
                                        as Guarantee Trustee

                                        by
                                          ---------------------------------
                                          Name:
                                          Title:



                                                                    Exhibit 4.21

                          [Form of Guarantee Agreement]
================================================================================

                               GUARANTEE AGREEMENT

                                       OF

                             Fund American Trust III

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

                           Dated as of [             ]


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




                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
                                    ARTICLE I
Definitions ...............................................................   2

                                   ARTICLE II

                               TRUST INDENTURE ACT

SECTION 2.01.       Trust Indenture Act; Application ......................   5
SECTION 2.02.       Lists of Holders of Preferred
                     Securities ..........................................    6
SECTION 2.03.       Reports by the Guarantee Trustee ......................   6
SECTION 2.04.       Periodic Reports to Guarantee
                     Trustee .............................................    6
SECTION 2.05.       Evidence of Compliance with
                     Conditions Precedent ................................    6
SECTION 2.06.       Events of Default; Waiver .............................   6
SECTION 2.07.       Disclosure of Information .............................   7
SECTION 2.08.       Conflicting Interest ...................................  7

                                  ARTICLE III

                POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

SECTION 3.01.       Powers and Duties of the Guarantee
                     Trustee .............................................    7
SECTION 3.02.       Certain Rights and Duties of the
                     Guarantee Trustee ...................................    8
SECTION 3.03.       Not Responsible for Recitals or
                     Issuance of Guarantee ................................  11

                                  ARTICLE IV

                               GUARANTEE TRUSTEE

SECTION 4.01.       Qualifications ........................................  11
SECTION 4.02.       Appointment, Removal and Resignation
                     of Guarantee Trustee ................................   12




                                                                               2

                                                                            Page
                                                                            ----

                                   ARTICLE V

                                   GUARANTEE

SECTION 5.01.       Guarantee .............................................  13
SECTION 5.02.       Waiver of Notice ......................................  13
SECTION 5.03.       Obligations Not Affected ..............................  14
SECTION 5.04.       Enforcement of Guarantee ..............................  15
SECTION 5.05.       Guarantee of Payment ..................................  15
SECTION 5.06.       Subrogation ...........................................  15
SECTION 5.07.       Independent Obligations ...............................  16

                                  ARTICLE VI

                   LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.01.       Limitation of Transactions ............................  16
SECTION 6.02.       Subordination .........................................  17

                                   ARTICLE VII

Termination ...............................................................  17

                                  ARTICLE VIII

                    LIMITATION OF LIABILITY; INDEMNIFICATION

SECTION 8.01.       Exculpation ...........................................  18
SECTION 8.02.       Indemnification .......................................  18

                                   ARTICLE IX

                                  MISCELLANEOUS

SECTION 9.01.       Successors and Assigns ................................  19
SECTION 9.02.       Amendments ............................................  19
SECTION 9.03.       Notices ...............................................  19
SECTION 9.04.       Genders ...............................................  20
SECTION 9.05.       Benefit ...............................................  20
SECTION 9.06.       Governing Law .........................................  20
SECTION 9.07.       Counterparts ..........................................  20
SECTION 9.08.       Exercise of Overallotment Option ......................  20




                                    [Form of]

                        GUARANTEE AGREEMENT dated as of [          ], between
                        [White Mountains Insurance Group, Ltd./Fund American
                        Companies, Inc.], a company existing under the laws of
                        [            ] (the "Guarantor"), and Bank One,
                        National Association, as the initial Guarantee Trustee
                        (as defined herein) for the benefit of the Holders
                        (as defined herein) from time to time of the Preferred
                        Securities (as defined herein) of Fund American
                        Trust III, a Delaware business trust (the "Issuer").

      WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration") dated as of [         ], among the trustees named therein, Fund
American Companies, Inc , a Delaware corporation ("Fund American"), as Sponsor,
and the Holders from time to time of undivided beneficial interests in the
assets of the Issuer, the Issuer may issue up to $[         ] aggregate
liquidation amount of its [   ]% Trust Preferred Securities (the "Preferred
Securities") representing preferred undivided beneficial interests in the assets
of the Issuer and having the terms set forth in Exhibit B to the Declaration, of
which $[        ] aggregate liquidation amount of Preferred Securities are being
issued as of the date hereof by the Issuer pursuant to the Underwriting
Agreement (as defined in the Declaration); and

      WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires to irrevocably and unconditionally agree, to the extent
set forth herein, to pay to the Holders 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 the initial purchasers
thereof 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.




                                                                               2

                                    ARTICLE I

                                   DEFINITIONS

      (a) Capitalized terms used in this Guarantee Agreement but not defined in
the preamble above have the

respective meanings assigned to them in this Article I

      (b) A term defined anywhere in this Guarantee Agreement has the same
meaning throughout.

      (c) All references to "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.

      "Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act of 1933, as amended, or any successor rule thereunder.

      "Commission" means the Securities and Exchange Commission.

      "Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer, having the terms set forth in
Exhibit C to the Declaration.

      "Covered Person" means any Holder.

      "Debentures" means the series of Junior Subordinated Debentures issued by
Fund American under the Indenture to the Property Trustee entitled the "[ ]%
Junior Subordinated Debentures due [ ]" which have been guaranteed by the
Guarantor.

      "Distributions" has the meaning set forth in Exhibit B to the Declaration.




                                                                               3

      "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 such a default resulting from a failure to pay any
Guarantee Payment, such default shall have continued for more than 30 days.

      "Guarantee Payments" shall mean the following Distributions and other
payments, without duplication, with respect to the Preferred Securities, to the
extent not made or paid by the Issuer: (i) any accrued and unpaid Distributions
that are required to be paid on the Preferred Securities, but only if and to the
extent that in each case Fund American or the Guarantor has made a payment to
the Property Trustee of interest on the Debentures, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), with respect to any Preferred Securities called for
redemption by the Issuer, but only if and to the extent that in each case Fund
American or the Guarantor has made a payment to the Property Trustee of interest
or principal on the Debentures, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the distribution of Debentures to Holders or the redemption of all the
Preferred Securities upon the maturity or redemption of the Debentures as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Preferred Securities to
the date of payment, to the extent the Issuer has funds available therefor, and
(b) the amount of assets of the Issuer remaining available for distribution to
Holders upon liquidation of the Issuer (in either case, the "Liquidation
Distribution").

      "Guarantee Trustee" means Bank One, National Association, until a
Successor Guarantee Trustee has been appointed and accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.

      "Holder" shall mean 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 or any entity directly or indirectly




                                                                               4

controlling or controlled by or under direct or indirect common control with the
Guarantor.

      "Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, and any officers, directors, shareholders, members, partners,
employees, representatives or agents of the Guarantee Trustee.

      "Indenture" means the Junior Subordinated Debenture Indenture dated as of
[              ], between the Guarantor, Fund American and Bank One, National
Association, as trustee, as amended and supplemented from time to time, pursuant
to which the Debentures are to be issued.

      "Investment Company" means an investment company as defined in the
Investment Company Act.

      "Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.

      "Liquidation Distribution" has the meaning set forth in the definition of
Guarantee Payments.

      "Majority in liquidation amount of the Preferred Securities" means, except
as otherwise required by the Trust Indenture Act, Holder(s) of outstanding
Preferred Securities voting together as a single class who are the record owners
of Preferred Securities whose aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) represents more than 50% of the aggregate liquidation amount of all
outstanding Preferred Securities.

      "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.

      "Preferred Securities" has the meaning set forth in the first WHEREAS
clause above.

      "Property Trustee" means the Person acting as Property Trustee under the
Declaration.




                                                                               5

      "Redemption Price" has the meaning set forth in the definition of
Guarantee Payments.

      "Responsible Officer" means, with respect to the Guarantee Trustee, any
officer of the Guarantee Trustee with responsibility for the administration of
this Guarantee Agreement 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.

      "66-2/3% in liquidation amount of the Preferred Securities" means, except
as otherwise required by the Trust Indenture Act, Holder(s) of outstanding
Preferred Securities voting together as a single class who are the record owners
of Preferred Securities whose aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) represents 66-2/3% or more of the aggregate liquidation amount of
all outstanding Preferred Securities.

      "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as a Guarantee Trustee under Section 4 01.

      "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

                                   ARTICLE II

                               TRUST INDENTURE ACT

      SECTION 2.01. 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 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

      (c) The application of the Trust Indenture Act to this Guarantee Agreement
shall not affect the nature




                                                                               6

of the Preferred Securities as equity securities representing preferred
undivided beneficial interests in the assets of the Issuer.

      SECTION 2.02. LISTS OF HOLDERS OF PREFERRED SECURITIES. (a) The Guarantor
shall provide the Guarantee Trustee with such information as is required under
Section 312(a) of the Trust Indenture Act at the times and in the manner
provided in Section 312(a).

      (b) The Guarantee Trustee shall comply with its obligations under Sections
310(b), 311 and 312(b) of the Trust Indenture Act.

      SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days after May
15 of each year, the Guarantee Trustee shall provide to the Holders such reports
as are required by Section 313 of the Trust Indenture Act, if any, in the form,
in the manner and at the times provided by Section 313 of the Trust Indenture
Act. The Guarantee Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.

      SECTION 2.04. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE. The Guarantor
shall provide to the Guarantee Trustee, the Commission and the Holders, as
applicable, such documents, reports and information as required by Section
314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by Section 314(a)(4) and (c) of the Trust Indenture Act,
any such certificates to be provided in the form, in the manner and at the times
required by Section 314(a)(4) and (c) of the Trust Indenture Act (PROVIDED that
any certificate to be provided pursuant to Section 314(a)(4) of the Trust
Indenture Act shall be provided within 120 days of the end of each fiscal year
of the Issuer).

      SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide the Guarantee Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Guarantee Agreement which
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given pursuant to Section 314(c)
of the Trust Indenture Act shall comply with Section 314(e) of the Trust
Indenture Act.

      SECTION 2.06. EVENTS OF DEFAULT; WAIVER. (a) Subject to Section 2.06(b),
Holders may, by vote of at least a Majority in liquidation amount of the




                                                                               7

Preferred Securities, (A) direct 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, or (B) on behalf of the
Holders of all Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any 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 Guarantee Agreement, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.

      (b) The right of any Holder to receive payment of the Guarantee Payments
in accordance with this Guarantee Agreement, or to institute suit for the
enforcement of any such payment, shall not be impaired without the consent of
each such Holder.

      SECTION 2.07. DISCLOSURE OF INFORMATION. The disclosure of information as
to the names and addresses of the Holders in accordance with Section 312 of the
Trust Indenture Act, regardless of the source from which such information was
derived, shall not be deemed to be a violation of any existing law or any law
hereafter enacted which does not specifically refer to Section 312 of the Trust
Indenture Act, nor shall the Guarantee Trustee be held accountable by reason of
mailing any material pursuant to a request made under Section 312(b) of the
Trust Indenture Act.

            SECTION 2.08. CONFLICTING INTEREST. The Declaration shall be deemed
to be specifically described in this Guarantee Agreement for the purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.

                                   ARTICLE III

                 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

      SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee in trust for the
benefit of the Holders. The Guarantee Trustee shall not transfer its right,
title and interest in this Guarantee Agreement to any Person except a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Guarantee Trustee or to a Holder




                                                                               8

exercising his or her rights pursuant to Section 5.04. The right, title and
interest of the Guarantee Trustee to this Guarantee Agreement shall vest
automatically in each Person who may hereafter be appointed as Guarantee Trustee
in accordance with Article IV. Such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered.

      (b) If an Event of Default occurs and is continuing, the Guarantee Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders.

      (c) This Guarantee Agreement and all moneys received by the Property
Trustee hereunder in respect of the Guarantee Payments will not be subject to
any right, charge, security interest, lien or claim of any kind in favor of or
for the benefit of the Guarantee Trustee or its agents or their creditors.

      (d) 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,
as their names and addresses appear upon the register, notice of all Events of
Default known to the Guarantee Trustee, unless such Events of Default shall have
been cured before the giving of such notice; PROVIDED that, 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. The
Guarantee Trustee shall not be deemed to have knowledge of any Event of Default
except any Event of Default as to which the Guarantee Trustee shall have
received written notice or a Responsible Officer charged with the administration
of this Guarantee Agreement shall have obtained written notice.

      (e) The Guarantee Trustee shall not resign as a Trustee unless a Successor
Guarantee Trustee has been appointed and accepted that appointment in accordance
with Article IV.

      SECTION 3.02. CERTAIN RIGHTS AND DUTIES OF THE GUARANTEE TRUSTEE. (a) The
Guarantee Trustee, before the occurrence of an Event of Default and after the
curing or waiving 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,




                                                                               9

and no implied 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 2.06(a)), 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 their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

      (b) 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 wilful misconduct, except that:

      (i) prior to the occurrence of an Event of Default and after the curing or
waiving of all 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 no implied covenants or obligations shall be read
      into this Guarantee Agreement against the Guarantee Trustee; and

            (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 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 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;




                                                                              10

            (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 as provided herein 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 it shall have reasonable
      ground 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.

            (c) Subject to the provisions of Section 3.02(a) and (b):

            (i) whenever in the administration of this Guarantee Agreement, the
      Guarantee Trustee shall deem it desirable that a matter be proved or
      established prior to taking, suffering or omitting any action hereunder,
      the Guarantee Trustee (unless other evidence is herein specifically
      prescribed) may, in the absence of bad faith on its part and, if the Trust
      is excluded from the definition of Investment Company solely by reason of
      Rule 3a-7 under the Investment Company Act ("Rule 3a-7"), subject to the
      requirements of Rule 3a-7, request and rely upon a certificate, which
      shall comply with the provisions of Section 314(e) of the Trust Indenture
      Act, signed by any authorized officer of the Guarantor;

            (ii) the Guarantee Trustee (A) may consult with counsel (which may
      be counsel to the Guarantor or any of its Affiliates and may include any
      of its employees) selected by it in good faith and with due care and the
      written advice or opinion of such counsel with respect to legal matters
      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 and opinion and (B)
      shall have the right at any time to seek instructions concerning the




                                                                              11

      administration of this Guarantee Agreement from any court of competent
      jurisdiction;

            (iii) the Guarantee 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 Guarantee Trustee shall not be responsible for
      any misconduct or negligence on the part of any agent or attorney
      appointed by it in good faith and with due care;

            (iv) 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 Holders, unless such Holders shall have
      offered to the Guarantee Trustee reasonable security and indemnity against
      the costs, expenses (including attorneys' fees and expenses) and
      liabilities that might be incurred by it in complying with such request or
      direction; PROVIDED that nothing contained in this clause (iv) shall
      relieve the Guarantee Trustee of the obligation, upon the occurrence of an
      Event of Default (which has not been cured or waived) to exercise such of
      the rights and powers vested in it by this Guarantee Agreement, and to use
      the same degree of care and skill in such exercise, as a prudent person
      would exercise or use under the circumstances in the conduct of his or her
      own affairs; and

            (v) any action taken by the Guarantee Trustee or its agents
      hereunder shall bind the Holders and the signature of the Guarantee
      Trustee or its agents alone shall be sufficient and effective to perform
      any such action; and no third party shall be required to inquire as to the
      authority of the Guarantee Trustee to so act, or as to its compliance with
      any of the terms and provisions of this Guarantee Agreement, both of which
      shall be conclusively evidenced by the Guarantee Trustee's or its agent's
      taking such action.

      SECTION 3.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE. The
recitals contained in this Guarantee Agreement shall be taken as the statements
of the Guarantor and the Guarantee Trustee does not assume any responsibility
for their correctness. The Guarantee Trustee makes no representations as to the
validity or sufficiency of this Guarantee Agreement.




                                                                              12

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

      SECTION 4.01. QUALIFICATIONS. (a) There shall at all times be a Guarantee
Trustee which shall:

            (i) not be an Affiliate of the Guarantor;

            (ii) be a corporation organized and doing business under the laws of
      the United States of America or any State or Territory thereof or of the
      District of Columbia, or a corporation or Person permitted by the
      Commission to act as an institutional trustee under the Trust Indenture
      Act, authorized under such laws to exercise corporate trust powers, having
      a combined capital and surplus of at least $50,000,000, and subject to
      supervision or examination by Federal, State, Territorial or District of
      Columbia authority. If such corporation publishes reports of condition at
      least annually, pursuant to law or to the requirements of the supervising
      or examining authority referred to above, then for the purposes of this
      Section 4.01(a)(ii), 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; and

            (iii) if the Trust is excluded from the definition of an Investment
      Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7 requires
      a trustee having certain qualifications to hold title to the "eligible
      assets" (as defined in Rule 3a-7) of the Trust, possess those
      qualifications.

      If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i),(ii) and (iii) above, the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02. If
the Guarantee Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and
the Guarantor shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act.

      SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE TRUSTEE.
(a) Subject to Section 4.02(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.




                                                                              13

      (b) The Guarantee Trustee shall not be removed in accordance with Section
4.02(a) until a Successor Guarantee Trustee possessing the qualifications to act
as Guarantee Trustee under Section 4.01(a) has been appointed and has accepted
such appointment by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the Guarantee Trustee being removed.

      (c) The Guarantee Trustee appointed to office shall hold office until its
successor shall have been appointed and until its removal or resignation.

      (d) The Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; PROVIDED, HOWEVER, that no such resignation of the Guarantee
Trustee shall be effective until: (i) a Successor Guarantee Trustee possessing
the qualifications to act as Guarantee Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee; or (ii) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the Holders, if the Trust is
excluded from the definition of an Investment Company solely by reason of Rule
3a-7.

      (e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 60 days after
delivery to the Guarantor of a Resignation Request, the resigning Guarantee
Trustee may petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after such notice, if
any, as it may deem proper and prescribe, appoint a Successor Guarantee Trustee.

                                    ARTICLE V

                                    GUARANTEE

      SECTION 5.01. GUARANTEE. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication




                                                                              14

of amounts theretofore paid by the Issuer), regardless of any defense, right of
set-off or counterclaim that 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 5.02. WAIVER OF NOTICE. The Guarantor hereby waives notice of
acceptance of this 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 Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and, to the extent permitted by law, all other notices and demands.

      SECTION 5.03. 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), 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;

            (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,



                                                                              15

      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 circumstances whatsoever that might otherwise
      constitute a legal or equitable discharge or defense of a guarantor, it
      being the intent of this Section 5.03 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
consent of, the Guarantor with respect to the happening of any of the foregoing.

      SECTION 5.04. ENFORCEMENT OF GUARANTEE. The Guarantor and the Guarantee
Trustee expressly acknowledge 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) Holders representing not less than a Majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available in
respect of this Guarantee Agreement, including the giving of directions to the
Guarantee Trustee, or exercising any trust or other power conferred upon the
Guarantee Trustee under this Guarantee Agreement, and (iv) if the Guarantee
Trustee fails to enforce this Guarantee Agreement, 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
Issuer, the Guarantee Trustee or any other Person. Notwithstanding the
foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder of
Preferred Securities may directly institute a proceeding against the Guarantor
for enforcement of such Holder's right to receive payment under the Guarantee.
The Guarantor waives any right or remedy to require that any action be brought
first against the Issuer or any other




                                                                              16

person or entity before proceeding directly against the Guarantor.

      SECTION 5.05. GUARANTEE OF PAYMENT. This Guarantee Agreement creates a
guarantee of payment and not merely 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).

      SECTION 5.06. SUBROGATION. The Guarantor shall be subrogated to all
rights, if any, of the Holders against the Issuer in respect of any amounts paid
to the Holders by the Guarantor under this Guarantee Agreement; 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 5.07. 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 5.03.

                                   ARTICLE VI

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

      SECTION 6.01. LIMITATION OF TRANSACTIONS. So long as any Preferred
Securities remain outstanding, the Guarantor will not declare or pay any
dividends on, or redeem, purchase, acquire or make a distribution or liquidation
payment with respect to, any of its common stock or preferred stock if at such
time (i) the Guarantor shall be in default with respect to its Guarantee
Payments or other payment obligations




                                                                              17

hereunder, (ii) there shall have occurred any Event of Default (as defined in
the Declaration) or (iii) the Guarantor shall have given notice of its selection
of an extension period (as defined in the Indenture) and such period, or any
extension thereof, is continuing; PROVIDED, HOWEVER, that the foregoing
restrictions will not apply to (i) dividends, redemptions, purchases,
acquisitions, distributions or payments made by the Guarantor by way of issuance
of shares of its capital stock, (ii) declarations or payments of dividends in
connection with the implementation of a stockholders's rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (iii) payments of accrued
dividends by the Guarantor upon the redemption, exchange or conversion of any
preferred stock of the Guarantor as may be outstanding from time to time in
accordance with the terms of such preferred stock, (iv) cash payments made by
the Guarantor in lieu of delivering fractional shares upon the redemption,
exchange or conversion of any preferred stock of the Guarantor as may be
outstanding from time to time in accordance with the terms of such preferred
stock, (v) purchases or acquisitions of share of common stock in connection with
the satisfaction of obligations under any employee benefit plan or other
contractual obligation, (vi) dividends, distributions, redemptions, purchases,
acquisitions or payments as a result of a reclassification of capital stock or
conversion of one class or series of capital stock for another class or series
of capital stock.

      SECTION 6.02. SUBORDINATION. This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other indebtedness, liabilities and obligations of
the Guarantor and any guarantees, endorsements or other contingent obligations
of the Guarantor in respect of such indebtedness, liabilities or obligations,
including the Debentures, except those made PARI PASSU or subordinate by their
terms, and (ii) senior to all capital stock now or hereafter issued by the
Guarantor and to any guarantee now or hereafter entered into by the Guarantor in
respect of any of its capital stock. The Guarantor's obligations under this
Guarantee Agreement will rank PARI PASSU with respect to obligations under other
guarantee agreements which it may enter into from time to time to the extent
that such agreements shall be entered into in substantially the form hereof and
provide for comparable guarantees by the Guarantor of payment on preferred
securities issued by




                                                                              18

other business trusts of which the Guarantor holds the common securities.

                                   ARTICLE VII

                                   TERMINATION

      This Guarantee Agreement shall terminate and be of no further force and
effect upon full payment of the Redemption Price of all Preferred Securities, or
upon the distribution of Debentures to Holders in exchange for all the Preferred
Securities, or upon full payment of the amounts payable in accordance with the
Declaration 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 the Preferred Securities or this Guarantee Agreement.

                                  ARTICLE VIII

                    LIMITATION OF LIABILITY; INDEMNIFICATION

      SECTION 8.01. EXCULPATION. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Guarantee Agreement or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's negligence or wilful
misconduct with respect to such acts or omissions.

      (b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of assets, liabilities, profits,




                                                                              19

losses or any other facts pertinent to the existence and amounts of assets from
which Distributions to Holders might properly be paid.

      SECTION 8.02. INDEMNIFICATION. (a) To the fullest extent permitted by
applicable law, the Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such Indemnified
Person in good faith and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by this
Guarantee Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or wilful misconduct with respect to such acts or
omissions.

      (b) To the fullest extent permitted by applicable law, expenses (including
legal fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.02(a).

                                   ARTICLE IX

                                  MISCELLANEOUS

      SECTION 9.01. SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assignees,
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 conveyance, transfer or lease of
assets involving the Guarantor that is permitted under Article Ten of the
Indenture, the Guarantor shall not assign its obligations hereunder.

      SECTION 9.02. AMENDMENTS. Except with respect to any changes which do not
adversely affect the rights of Holders (in which case no consent of Holders will
be




                                                                              20

required), this Guarantee Agreement may only be amended with the prior approval
of the Holders of not less than 66-2/3% in liquidation amount of the Preferred
Securities. The provisions of Section 12.02 of the Declaration concerning
meetings of Holders shall apply to the giving of such approval.

      SECTION 9.03 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:

                  [                                 ]
                  [                                 ]
                  [                                 ]
                  Facsimile No.:  [(   )       ]
                  Attention: [            ]

            (b) if given to the Guarantee Trustee, to the address set forth
      below or such other address as the Guarantee Trustee may give notice of to
      the Holders:

                  [              ]
                  [              ]
                  [              ]
                  Facsimile No.:  [(   )       ]
                  Attention: [                 ]

            (c) if given to any Holder of Preferred Securities, 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.

      SECTION 9.04. GENDERS. The masculine, feminine and neuter genders used
herein shall include the masculine, feminine and neuter genders.




                                                                              21

      SECTION 9.05. BENEFIT. This Guarantee Agreement is solely for the benefit
of the Holders and, subject to Section 3.01(a), is not separately transferable
from the Preferred Securities.

      SECTION 9.06. 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 PRINCIPLES OF CONFLICTS OF LAWS).

      SECTION 9.07. COUNTERPARTS. This Guarantee Agreement may be executed in
counterparts, each of which shall be an original; but such counterparts shall
together constitute one and the same instrument.

      SECTION 9.08. EXERCISE OF OVERALLOTMENT OPTION. If and to the extent that
Preferred Securities are issued by the Issuer upon exercise of any overallotment
option under the Underwriting Agreement (as defined in the Declaration), the
Guarantor agrees to give prompt notice thereof to the Guarantee Trustee, but the
failure to give such notice shall not relieve the Guarantor of any of its
obligations hereunder.

      This Guarantee Agreement is executed as of the day and year first above
written.

                                     [                                 ]
                                       by

                                           Name:
                                           Title:

                                     BANK ONE NATIONAL ASSOCIATION,
                                     as Guarantee Trustee

                                       by

                                           Name:
                                           Title:




                                                                     Exhibit 5.1



                    [CRAVATH, SWAINE & MOORE LLP LETTERHEAD]


                                                     June 27, 2003


                      WHITE MOUNTAINS INSURANCE GROUP, LTD.
                          FUND AMERICAN COMPANIES, INC.
                              FUND AMERICAN TRUST I
                             FUND AMERICAN TRUST II
                             FUND AMERICAN TRUST III

                       REGISTRATION STATEMENT ON FORM S-3

Dear Ladies and Gentlemen:

         We have acted as special counsel for White Mountains Insurance Group,
Ltd., a corporation existing under the laws of Bermuda (the "Company"), Fund
American Companies, Inc., a Delaware corporation ("Fund American"), and Fund
American Trust I, Fund American Trust II and Fund American Trust III, each a
Delaware business trust (each a "Trust" and, collectively, the "Trusts"), in
connection with the filing with the Securities and Exchange Commission (the
"Commission") of a Registration Statement on Form S-3 (the "Registration
Statement") relating to (i) preference shares of the Company (the "Company
Preference Shares"), (ii) common shares of the Company (the "Common Shares"),
(iii) preferred stock of Fund American (the "Preferred Stock" and, together with
the Company Preference Shares, the "Preference Shares"), (iv) unsecured senior
debt securities and unsecured subordinated debt securities of the Company
(collectively, the "Company Debt Securities"), (v) unsecured senior debt
securities, unsecured subordinated debt securities and unsecured junior
subordinated debt securities of Fund American (collectively, the "Fund American
Debt Securities" and, together with the Company Debt Securities, the "Debt
Securities"), (vi) guarantees of the Fund American Debt Securities by the
Company (the "Debt Guarantees"), (vii) preferred securities of the Trusts (the
"Trust Preferred Securities") and (viii) guarantees of the Trust Preferred
Securities by the Company and Fund American (the "Trust Preferred Guarantees"
and, together with the Debt Guarantees, the "Guarantees"). The Preference
Shares, Common Shares, Debt Securities, Trust Preferred Securities and
Guarantees (collectively, the "Securities") will be offered on a continued or
delayed basis pursuant to the provisions of Rule 415 under the Securities Act of
1933 (the "Securities Act").




                                                                               2


         In connection with the foregoing, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
corporate records and other instruments as we have deemed necessary for the
purposes of this opinion, including, (i) the Certificate of Incorporation of
Fund American, as amended, (ii) the By-Laws of Fund American, (iii) the form of
Senior Indenture (the "Senior Indenture") to be entered into by the Company (as
issuer or guarantor), Fund American (if Fund American is to issue its unsecured
senior debt securities) and Bank One, National Association (the "Senior
Trustee"), (iv) the form of Subordinated Indenture (the "Subordinated
Indenture") to be entered into by the Company (as issuer or guarantor), Fund
American (if Fund American is to issue its unsecured subordinated debt
securities) and Bank One, National Association (the "Subordinated Trustee"), (v)
the form of Junior Subordinated Indenture (the "Junior Subordinated Indenture"
and, together with the Senior Indenture and the Subordinated Indenture, the
"Indentures") to be entered into by the Company (as guarantor), Fund American
(as issuer) and Bank One, National Association (the "Junior Subordinated
Trustee" and, together with the Senior Trustee and the Subordinated Trustee, the
"Trustees"), (vi) the form of Amended and Restated Declarations of Trust of each
Trust (the "Trust Agreements") and (vii) the forms of Guarantee Agreements (the
"Trust Preferred Guarantee Agreements") to be entered into by the Company and/or
Fund American and Bank One, National Association (the "Guarantee Trustee").

         Based on the foregoing, we are of opinion as follows:

         1. Based solely on a certificate from the Secretary of State of
Delaware, Fund American is a corporation validly existing and good standing
under the laws of the State of Delaware.

         2. The execution and delivery of the Indentures and the issuance and
sale of the Fund American Debt Securities have been duly authorized by all
necessary corporate action of Fund American.

         3. The execution and delivery of the Trust Agreements and the Trust
Preferred Guarantee Agreement, if Fund American guarantees the Trust Agreements,
have been duly authorized by all necessary corporate action of Fund American.

         4. When any Indenture shall have been duly authorized, executed and
delivered by each of the Company (if a guarantor or issuer), Fund American (if
Fund American is to be a party thereto as issuer of the applicable Debt
Securities) and the applicable Trustee, such Indenture will constitute a legal,
valid and binding obligation of the Company (if the Company is a party thereto)
and Fund American (if Fund American is a party thereto), enforceable against the
Company (if the Company is a party thereto) and Fund American (if Fund American
is a party thereto) in accordance with its terms (subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws affecting creditors' rights generally from time to time in effect
and to general principles of equity, including concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether such
enforceability is considered in a proceeding in equity or at law).




                                                                               3


         5. When (i) the applicable Indenture shall have been duly authorized,
executed and delivered by each of the Company and the applicable Trustee and
(ii) the Company Debt Securities shall have been duly authorized, executed,
authenticated and delivered against payment therefor, the Company Debt
Securities will constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled to
the benefits of the applicable Indenture (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws affecting creditors' rights generally from time to time in effect and to
general principles of equity, including concepts of materiality, reasonableness,
good faith and fair dealing, regardless of whether such enforceability is
considered in a proceeding in equity or at law).

         6. When (i) the applicable Indenture shall have been duly authorized,
executed and delivered by each of the Company (if a guarantor), Fund American
(as issuer) and the applicable Trustee and (ii) the Fund American Debt
Securities shall have been duly authorized, executed, authenticated and
delivered against payment therefor, the Fund American Debt Securities will
constitute legal, valid and binding obligations of Fund American, enforceable
against Fund American in accordance with their terms and entitled to the
benefits of the applicable Indenture (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws affecting creditors' rights generally from time to time in effect and to
general principles of equity, including concepts of materiality, reasonableness,
good faith and fair dealing, regardless of whether such enforceability is
considered in a proceeding in equity or at law).

         7. When (i) the applicable Indenture shall have been duly authorized,
executed and delivered by each of the Company (if a guarantor), Fund American
(as issuer) and the Trustee, and if the Company is a guarantor, (ii) the Debt
Guarantees to be endorsed on the Fund American Debt Securities issued under such
Indenture shall have been duly authorized, such Debt Guarantees will constitute
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms and entitled to the benefits of the
applicable Indenture (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity, including concepts of materiality, reasonableness, good
faith and fair dealing, regardless of whether such enforceability is considered
in a proceeding in equity or at law).

         8. If the Trust Preferred Securities will be guaranteed by the Company
or Fund American, (i) when the applicable Trust Preferred Guarantee Agreement
shall have been duly authorized, executed and delivered by each of the Company
or Fund American, and the Guarantee Trustee and (ii) when the applicable Trust
Preferred Guarantee shall have been duly authorized such Trust Preferred
Guarantee will constitute a legal, valid and binding obligation of the Company
or Fund American, as applicable, enforceable against the Company or Fund
American, as applicable, in accordance with its terms and entitled to the
benefits of the applicable Trust Preferred Guarantee Agreement (subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or




                                                                               4


other similar laws affecting creditors' rights generally from time to time in
effect and to general principles of equity, including concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether such
enforceability is considered in a proceeding in equity or at law).

         9. When (i) the Fund American Board of Directors has taken all
necessary corporate action to approve the issuance and terms of the Preferred
Stock, the terms of the offering thereof and related matters including the
adoption of a Certificate of Designations relating to such shares of the
Preferred Stock and the filing of such Certificate of Designations with the
Secretary of State of the State of Delaware and (ii) certificates representing
such shares of the Preferred Stock have been duly executed, countersigned,
registered and delivered either (a) in accordance with the applicable definitive
purchase, underwriting or similar agreement approved by the Board upon payment
of the consideration therefor (which consideration is not less than the par
value of the Preferred Stock) provided for therein or (b) upon conversion or
exercise of any other Security, in accordance with the terms of such Security or
the instrument governing such Security providing for such conversion or exercise
as approved by the Board, for consideration approved by the Board (which
consideration is not less than the par value of the Preferred Stock), then such
shares of the Preferred Stock will be validly issued, fully paid and
nonassessable.

         We are admitted to practice in the State of New York, and we express no
opinion as to matters governed by any laws other than the laws of the State of
New York, the General Corporation Law of the State of Delaware and the Federal
law of the United States of America. In particular, we do not purport to pass on
any matter governed by the Delaware Business Trust Act or the laws of Bermuda.





                                                                               5


         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the use of our name under the caption
"Legal Matters" in the prospectus contained in the Registration Statement. In
giving this consent, we do not thereby admit we are included in the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Commission.


                                             Very truly yours,

                                             /s/ Cravath, Swaine & Moore LLP

                                             Cravath, Swaine & Moore LLP


White Mountains Insurance Group, Ltd.
   80 South Main Street
      Hanover, New Hampshire 03755-2053

Fund American Companies, Inc.
Fund American Trust I
Fund American Trust II
Fund American Trust III
   370 Church Street
      Guilford, Connecticut 06437




                                                                     Exhibit 5.2


27 June, 2003
White Mountains Insurance Group, Ltd.                Direct Line: 441 2994951
80 South Main Street                                 E-MAIL:      EMLucas@cdp.bm
Hanover, New Hampshire 03755-2053                    OUR REF:     EMLL/10080
USA


Dear Sirs

WHITE MOUNTAINS INSURANCE GROUP, LTD.  (THE "COMPANY")

We have acted as special legal counsel in Bermuda to the Company in connection
with the filing by the Company with the United States Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities Act")
of a registration statement on Form S-3 (Registration No. 333-73012) to which
this opinion is an exhibit (the "Registration Statement") in relation to the
registration of common shares and preference shares (the "Shares") and debt
securities of the Company to be issued from time to time by the Company after
the Registration Statement becomes effective (the "Debt") (the Shares and Debt
are referred to herein as the "Securities"), in relation to certain guarantees
to be granted by the Company in respect of debt securities and junior
subordinated debt securities of Fund American Companies, Inc. and preferred
securities of Fund American Trust I, Fund American Trust II, and Fund American
Trust III (collectively the "Guarantees") and in relation to the registration of
preferred stock of Fund American Companies, Inc.

For the purposes of giving this opinion, we have examined an electronic copy of
the Registration Statement, excluding the exhibits and the documents
incorporated by reference therein.

We have also reviewed and have relied upon the memorandum of association and the
bye-laws of the Company (the "Constitutional Documents"), minutes of meetings of
the Company's board of directors (referred to herein as the "Minutes"),
correspondence on behalf of the Company with the Bermuda Monetary Authority (the
"BMA") whereby the BMA has granted certain permissions, inter alia, for the
issue (and subsequent transfer) of the Securities (subject to conditions
expressed in such correspondence), and such other documents and made such
enquiries as to questions of Bermuda law as we have deemed necessary in order to
render the opinions set forth below.




White Mountains Insurance Group, Ltd.
27 June, 2003
Page 2

We have assumed (a) the genuineness and authenticity of all signatures and the
conformity to the originals of all copies (whether or not certified) examined by
us and the authenticity and completeness of the originals from which such copies
were taken, (b) the accuracy and completeness of all factual representations
made in the Registration Statement and other documents reviewed by us, (c) that
the Company will issue the Securities in furtherance of its objects as set out
in its memorandum of association, (d) that there is no provision of the law of
any jurisdiction, other than Bermuda, which would have any implication in
relation to the opinions expressed herein, (e) the Company will receive money or
money's worth for each Share when issued of not less than the par value thereof,
(f) the Company will have sufficient authorised capital to effect the issue of
each Share when issued, (g) the Company will comply, to the extent applicable,
with the requirements of Part III of the Companies Act 1981, as amended
"Prospectuses and Public Offers", and (h) at the time of issue of any Securities
the BMA will not have revoked or amended its consent to the issue of the
Securities.

"Non-assessability" is not a legal concept under Bermuda law, but when we
describe the Shares as being "non-assessable" herein we mean, subject to any
contrary provision in any agreement between the Company and any one of its
members holding any of the Common Shares (but only with respect to such member),
that no further sums are payable with respect to the holding of such Shares and
the member shall not be bound by an alteration in the memorandum of association
or the bye-laws of the Company after the date upon which it became a member if
and so far as the alteration requires such member to take or subscribe for
additional Shares or in any way increases its liability to contribute to the
share capital of, or otherwise pay money to, the Company.

We have made no investigation of and express no opinion in relation to the laws
of any jurisdiction other than Bermuda. This opinion is to be governed by and
construed in accordance with the laws of Bermuda and is limited to and is given
on the basis of the current law and practice in Bermuda. This opinion is issued
solely for your benefit and is not to be relied upon by any other person, firm
or entity or in respect of any matter other than the issue of the Securities, as
described in the Registration Statement.

On the basis of and subject to the foregoing, we are of the opinion that:

1.     The Company is duly incorporated and existing under the laws of Bermuda
       in good standing (meaning solely that it has not failed to make any
       filing with any Bermuda governmental authority or to pay any Bermuda
       government fee or tax which would make it liable to be struck off the
       Register of Companies and thereby cease to exist under the laws of
       Bermuda).

2.     The Company has taken all corporate action required to authorize the
       adoption and filing of the Registration Statement.




White Mountains Insurance Group, Ltd.
27 June, 2003
Page 3

3.     Upon the issuance and delivery by the Company of any of the Shares as
       contemplated by the Registration Statement against payment therefor in
       accordance with the terms of issuance of such Shares, such Shares will be
       validly issued and will be fully paid and non-assessable.

4.     The issuance of the Debt and the granting of the Guarantees has been
       authorized by the Minutes.

We hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the references to our Firm under the headings entitled
"Enforcement of Judgments and Other Matters" and "Legal Matters" in the
Registration Statement. In giving such consent, we do not hereby admit that we
are in the category of persons whose consent is required under the Securities
Act.

/s/ Conyers Dill & Pearman

Yours faithfully
CONYERS DILL & PEARMAN




                                                                     Exhibit 5.3


                                  June 27, 2003


Fund American Trusts I-III
c/o Fund American Companies, Inc.
One Beacon Street
Boston, Massachusetts 02108-3100

       Re:  Fund American Trusts I, Fund American Trust II and Fund American
            Trust III

Ladies and Gentlemen:

       We have acted as special Delaware counsel for Fund American Companies,
Inc., a Delaware corporation (the "Company"), and Fund American Trusts I, Fund
American Trust II and Fund American Trust III, each a Delaware statutory trust
(each, a "Trust" and collectively, the "Trusts"), in connection with the matters
set forth herein. At your request, this opinion is being furnished to you.

       For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:

       (a)  The Declaration of Trust of each Trust, each dated as of October 30,
            2001, among the Company and the trustees of the Trust named therein;

       (b)  The Amended and Restated Declaration of Trust of each Trust, each
            dated as June 26, 2003, among the Company and the trustees of the
            Trust named therein;

       (c)  A form of Amended and Restated Declaration of Trust for each Trust
            (including Exhibits A, B and C thereto) (collectively, the "Trust
            Agreements")in the forms referenced as exhibits 4.13, 4.14 and 4.15
            to the Registration Statement (as defined below), to be entered into
            by and among the Company, as depositor, the trustees of the Trust
            named therein,




Fund American Trusts I-III
June 27, 2003
Page 2


            and the holders, from time to time, of the undivided beneficial
            interests in the assets of such Trust;

       (d)  The Registration Statement on Form S-3 (Registration No. 333-88352),
            as amended by Amendment No.4 thereto, including a preliminary
            prospectus with respect to each Trust (the "Prospectus"), to be
            filed on or about June 26, 2003 (as amended, the "Registration
            Statement") by the Trusts, the Company and others with the
            Securities and Exchange Commission (the "Commission"), relating to
            the preferred securities of each Trust, representing undivided
            beneficial interests in the assets of each Trust (each, a Preferred
            Security" and collectively, the "Preferred Securities");

       (e)  A certified copy of the Certificate of Trust for each Trust, each
            dated October 30, 2001, as filed with the Office of the Secretary of
            State of Delaware (the "Secretary of State") on October 30, 2001,
            each as corrected by the Corrected Certificate of Trust for each
            Trust, as filed with the Office of the Secretary of State on
            November 2, 2001 (each as so corrected, a "Certificate of Trust;"
            and collectively, the "Certificates of Trust"); and

       (f)  A Certificate of Good Standing for each Trust, each dated June 26,
            2003, obtained from the Secretary of State.

       Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreements.

       For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (f) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (f) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that bears upon or is inconsistent with
the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.

       With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.

       For purposes of this opinion, we have assumed (i) that each Trust
Agreement will constitute the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of each Trust, that the




Fund American Trusts I-III
June 27, 2003
Page 3

Certificates of Trust are in full force and effect and have not been further
amended and that the Trust Agreements will be in full force and effect and will
be executed in substantially the forms reviewed by us, (ii) except to the extent
provided in paragraph 1 below, the due creation or due organization or due
formation, as the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iii) the legal capacity of
natural persons who are parties to the documents examined by us, (iv) that each
of the parties to the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under, such documents, (v)
the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom Preferred
Securities are to be issued by the Trusts (collectively, the "Preferred Security
Holders") of a Preferred Security Certificate for such Preferred Security and
the payment for the Preferred Security acquired by it, in accordance with the
Trust Agreements and the Registration Statement, (vii) that the Preferred
Securities are issued and sold to the Preferred Security Holders in accordance
with the Trust Agreements and the Registration Statement; and (viii) that Bank
One Delaware, Inc. satisfies the requirements of Section 3807 of the Delaware
Statutory Trust Act. We have not participated in the preparation of the
Registration Statement or Prospectus and assume no responsibility for their
contents.

       This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.

       Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:

       1. Each Trust has been duly created and is validly existing in good
standing as a statutory trust under the Delaware Statutory Trust Act, 12 Del.
C.ss.3801, et seq.

       2. When each of the Trust Agreements shall have been duly authorized,
executed and delivered by each party thereto, the Preferred Securities of each
Trust will be duly authorized by each Trust Agreement and upon issuance against
payment therefor will be duly and validly issued and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of their respective Trust.

       3. The Preferred Security Holders, as beneficial owners of the Trusts,
will 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. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreements.




Fund American Trusts I-III
June 27, 2003
Page 4


       We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the reference to us as local counsel under the headings "Legal
Matters" in the Prospectus. In giving the foregoing consents, we do not thereby
admit that we come within the category of Persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Except as stated above, without our prior written consent, this opinion may not
be furnished or quoted to, or relied upon by, any other Person for any purpose.

                                         Very truly yours,

                                         /s/ Richards, Layton & Finger P.A.


WF/DSG



                                                                    Exhibit 12.1

Computation of ratio of earnings to fixed charges and ratio of earnings to fixed
charges and preferred stock dividends ($ in millions)



                                                                               Three months  Three months  Twelve months
                                                                                  ended         ended          ended
                                                                                March 31,      March 31,    December 31,
Line #         CONSOLIDATED BASIS                                   Line Ref.      2003          2002           2002
- ------        ------------------                                    ---------  ------------  ------------  -------------
                                                                                            
 1a     Pretax earnings (loss) from continuing operations                         $146.0          ($9.1)       $119.4

 1b     Less undistributed earnings in unconsolidated affiliates                     n/a            n/a           n/a

  2     Interest expense                                                            13.6           18.2          71.8

  3     Portion of rent representative of interest exp                               2.1            2.1           8.3
                                                                                  -------        -------       -------

  4     Operating earnings as adjusted                              1a+1b+2+3      161.7           11.2         199.5
                                                                                  =======        =======       =======

  5     Preferred stock dividend requirements                                        7.6            7.6          30.3

  6     Effective percent. for dividend gross-up (1-eff .tax rate)   100%-14         0.7            1.0           0.9
                                                                                  -------        -------       -------

  7     Effective preferred stock div. requirements                    5/6          11.1            7.6          33.6

  8     Interest expense                                                2           13.6           18.2          71.8

  9     Portion of rent representative of interest exp                  3            2.1            2.1           8.3
                                                                                  -------        -------       -------

 10     Total fixed charges and preferred stock dividends             7+8+9         26.8           27.9         113.7
                                                                                  =======        =======       =======

 11     Ratio of earnings to fixed charges
          and preferred stock dividends                               4/10           6.0 X          0.4 X         1.8 X
                                                                                  =======        =======       =======
        Fixed charges exceed earnings

        Effective tax rate:

 12                 Pretax loss                                         1          146.0           (9.1)        119.4

 13                 Income tax expense (benefit)                                    46.1         n/a***          11.7
                                                                                  -------        -------       -------

 14                 Effective tax rate for pref. stock gross-up       13/12          0.3         n/a***           0.1
                                                                                  =======        =======       =======


                                                                                Twelve months  Twelve months  Twelve months
                                                                                    ended          ended          ended
                                                                                 December 31,   December 31,   December 31,
Line #         CONSOLIDATED BASIS                                   Line Ref.       2001           2000            1999
- ------        ------------------                                    ---------   -------------  -------------  -------------
                                                                                               
 1a     Pretax earnings (loss) from continuing operations                           ($427.5)       $355.4          $161.5

 1b     Less undistributed earnings in unconsolidated affiliates                        n/a          (1.0)          (29.0)

  2     Interest expense                                                               45.7          16.1            14.7

  3     Portion of rent representative of interest exp                                  7.7           0.9             0.6
                                                                                    --------       -------        --------

  4     Operating earnings as adjusted                              1a+1b+2+3        (374.1)        371.4           147.8
                                                                                    ========       =======        ========

  5     Preferred stock dividend requirements                                          18.1           0.0             0.0

  6     Effective percent. for dividend gross-up (1-eff .tax rate)   100%-14            1.0           0.0             0.0
                                                                                    --------       -------        --------

  7     Effective preferred stock div. requirements                    5/6             18.1           0.0             0.0

  8     Interest expense                                                2              45.7          16.1            14.7

  9     Portion of rent representative of interest exp                  3               7.7           0.9             0.6
                                                                                    --------       -------        --------

 10     Total fixed charges and preferred stock dividends             7+8+9            71.5          17.0            15.3
                                                                                    ========       =======        ========

 11     Ratio of earnings to fixed charges
          and preferred stock dividends                               4/10             (5.2)X        21.8 X           9.6 X
                                                                                    ========       =======        ========

        Effective tax rate:

 12                 Pretax loss                                         1            (427.5)        355.4           161.5

 13                 Income tax expense (benefit)                                     n/a***           n/a             n/a
                                                                                    --------       -------        --------

 14                 Effective tax rate for pref. stock gross-up       13/12          n/a***           n/a             n/a
                                                                                    ========       =======        ========


                                                                                 Twelve months
                                                                                     ended
                                                                                  December 31,
Line #         CONSOLIDATED BASIS                                   Line Ref.         1998
- ------        ------------------                                    ---------    -------------
                                                                        
 1a     Pretax earnings (loss) from continuing operations                            $79.6

 1b     Less undistributed earnings in unconsolidated affiliates                     (17.2)

  2     Interest expense                                                              13.7

  3     Portion of rent representative of interest exp                                 0.6
                                                                                    -------

  4     Operating earnings as adjusted                              1a+1b+2+3         76.7
                                                                                    =======

  5     Preferred stock dividend requirements                                          0.0

  6     Effective percent. for dividend gross-up (1-eff .tax rate)   100%-14           0.0
                                                                                    -------

  7     Effective preferred stock div. requirements                    5/6             0.0

  8     Interest expense                                                2             13.7

  9     Portion of rent representative of interest exp                  3              0.6
                                                                                    -------

 10     Total fixed charges and preferred stock dividends             7+8+9           14.3
                                                                                    =======

 11     Ratio of earnings to fixed charges
          and preferred stock dividends                               4/10             5.4 X
                                                                                    =======
        Fixed charges exceed earnings

        Effective tax rate:

 12                 Pretax loss                                         1             79.6

 13                 Income tax expense (benefit)                                       n/a
                                                                                    -------

 14                 Effective tax rate for pref. stock gross-up       13/12            n/a
                                                                                    =======

n/a - earnings in affiliates already excluded from earnings
n/a*** due to loss in period




WHITE MOUNTAINS/FUND AMERICAN
RATIO OF EARNINGS TO FIXED CHARGES
PERIODS ENDED DECEMBER 31, 1996 THROUGH 2002



                                                                               Three months  Three months  Twelve months
                                                                                  ended         ended          ended
                                                                                March 31,      March 31,    December 31,
Line #         CONSOLIDATED BASIS                                   Line Ref.      2003          2002           2002
- ------        ------------------                                    ---------  ------------  ------------  -------------
                                                                                            
 1a     Pretax earnings (loss) from continuing operations                         $146.0          ($9.1)       $119.4

 1b     Less undistributed earnings in unconsolidated affiliates                     n/a            n/a           n/a

  2     Interest expense                                                            13.6           18.2          71.8

  3     Portion of rent representative of interest exp                               2.1            2.1           8.3
                                                                                  -------        -------       -------

  4     Operating earnings as adjusted                              1a+1b+2+3      161.7           11.2         199.5
                                                                                  =======        =======       =======

  8     Interest expense                                                2           13.6           18.2          71.8

  9     Portion of rent representative of interest exp                  3            2.1            2.1           8.3
                                                                                  -------        -------       -------

 10     Total fixed charges                                           7+8+9         15.7           20.3          80.1
                                                                                  =======        =======       =======

 11     Ratio of earnings to fixed charges                            4/10          10.3 X          0.6 X         2.5 X
                                                                                  =======        =======       =======



                                                                                Twelve months  Twelve months  Twelve months
                                                                                    ended          ended          ended
                                                                                 December 31,   December 31,   December 31,
Line #         CONSOLIDATED BASIS                                   Line Ref.       2001           2000            1999
- ------        ------------------                                    ---------   -------------  -------------  -------------
                                                                                               
 1a     Pretax earnings (loss) from continuing operations                           ($427.5)       $355.4          $161.5

 1b     Less undistributed earnings in unconsolidated affiliates                        n/a          (1.0)          (29.0)

  2     Interest expense                                                               45.7          16.1            14.7

  3     Portion of rent representative of interest exp                                  7.7           0.9             0.6
                                                                                    --------       -------        --------

  4     Operating earnings as adjusted                              1a+1b+2+3        (374.1)        371.4           147.8
                                                                                    ========       =======        ========

  8     Interest expense                                                2              45.7          16.1            14.7

  9     Portion of rent representative of interest exp                  3               7.7           0.9             0.6
                                                                                    --------       -------        --------

 10     Total fixed charges                                           7+8+9            53.4          17.0            15.3
                                                                                    ========       =======        ========

 11     Ratio of earnings to fixed charges                            4/10             (7.0)X        21.8 X           9.6 X
                                                                                    ========       =======        ========



                                                                                 Twelve months
                                                                                     ended
                                                                                  December 31,
Line #         CONSOLIDATED BASIS                                   Line Ref.         1998
- ------        ------------------                                    ---------    -------------
                                                                        
 1a     Pretax earnings (loss) from continuing operations                            $79.6

 1b     Less undistributed earnings in unconsolidated affiliates                     (17.2)

  2     Interest expense                                                              13.7

  3     Portion of rent representative of interest exp                                 0.6
                                                                                    -------

  4     Operating earnings as adjusted                              1a+1b+2+3         76.7
                                                                                    =======

  8     Interest expense                                                2             13.7

  9     Portion of rent representative of interest exp                  3              0.6
                                                                                    -------

 10     Total fixed charges                                           7+8+9           14.3
                                                                                    =======

 11     Ratio of earnings to fixed charges                            4/10             5.4 X
                                                                                    =======




n/a - earnings in affiliates already excluded from earnings

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Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated February 14, 2003 relating to the consolidated financial statements and financial statement schedules of White Mountains Insurance Group, Ltd., which appears in the White Mountains Insurance Group Ltd. Annual Report on Form 10-K/A for the year ended December 31, 2002. We also consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated May 8, 2001 relating to the consolidated financial statements of CGU Corporation, which appears in the White Mountains Insurance Group Ltd. Current Report on Form 8-K/A dated June 1, 2001 (filed May 13, 2003). We also consent to the reference to us under the heading "Experts" in such Registration Statement.

/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
June 27, 2003

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CONSENT OF INDEPENDENT ACCOUNTANTS

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Exhibit 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated February 26, 2003 relating to the combined financial statements of Montpelier Re Holdings Ltd. as of December 31, 2002 and 2001 and for the year ended December 31, 2002 and the period from November 14, 2001 (date of incorporation) to December 31, 2001, which appears in the White Mountains Insurance Group Ltd. Annual Report on Form 10-K/A for the year ended December 31, 2002. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

/s/ PricewaterhouseCoopers
Chartered Accountants
Hamilton, Bermuda
June 27, 2003

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CONSENT OF INDEPENDENT ACCOUNTANTS

Exhibit 25.1

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)

BANK ONE, NATIONAL ASSOCIATION
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)

A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)

1 BANK ONE PLAZA, CHICAGO, ILLINOIS 60670-0120
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

BANK ONE, N.A.
1 BANK ONE PLAZA, SUITE IL1-0120, THE LAW DEPARTMENT
CHICAGO, ILLINOIS 60670-0120
ATTN: SANDRA L. CARUBA, SENIOR COUNSEL, (312) 336-9436
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

WHITE MOUNTAINS INSURANCE GROUP, LTD.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)

BERMUDA 94-2708455
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

80 SOUTH MAIN STREET
HANOVER, NEW HAMPSHIRE 03755-2053
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

FUND AMERICAN COMPANIES, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)

DELAWARE 52-2272489
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108-3100
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

SENIOR DEBT SECURITIES
(TITLE OF 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.

Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of Governors
of the Federal Reserve System, Washington D.C.

(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 SUCH AFFILIATION.

No such affiliation exists with the trustee.

ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.

1. A copy of the articles of association of the trustee now in
effect.*

2. A copy of the certificates of authority of the trustee to
commence business.*

3. A copy of the authorization of the trustee to exercise
corporate trust powers.*

4. A copy of the existing by-laws of the trustee.*

5. Not Applicable.

6. The consent of the trustee required by Section 321(b) of the
Act.

7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.

8. Not Applicable.

9. Not Applicable.

Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bank One, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 20th day of June, 2003.

BANK ONE, NATIONAL ASSOCIATION,
TRUSTEE

By /s/ Sandra L. Caruba
-----------------------------------
Sandra L. Caruba
Senior Counsel

* EXHIBITS 1, 2, 3, AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS
BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF BANK ONE, N.A., FILED AS
EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-3 OF HOUSEHOLD FINANCE
CORPORATION FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 24, 2000
(REGISTRATION NO. 333-33240).

EXHIBIT 6

THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT

June 20, 2003

Securities and Exchange Commission
Washington, D.C. 20549

Ladies and Gentlemen:

In connection with the qualification of an indenture between White
Mountains Insurance Group, Ltd., Fund American Companies, Inc. and Bank One,
National Association, the undersigned, in accordance with Section 321(b) of the
Trust Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities authorized
to make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.

Very truly yours,

BANK ONE, NATIONAL ASSOCIATION

By /s/ Sandra L. Caruba
------------------------------------
Sandra L. Caruba
Senior Counsel

EXHIBIT 7

BANK ONE, NA FFIEC 031
- -------------------------------------------- RC-1
Legal Title of Bank

CHICAGO 12
- --------------------------------------------
City

IL 60670
- --------------------------------------------
State Zip Code

Transmitted to EDS as 0238103 on 05/12/2003 at 05:12:15 CST
FDIC Certificate Number - 03618

CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED
SAVINGS BANKS FOR MARCH 31, 2003

All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.

SCHEDULE RC--BALANCE SHEET

Dollar Amounts in Thousands RCFD Bil | Mil | Thou
- ----------------------------------------------------------------------------------------------------------------------------

ASSETS
1. Cash and balances due from depository institutions (from
Schedule RC-A):
a. Noninterest-bearing balances and currency and coin (1) 0081 14,545,000 1.a
b. Interest-bearing balances (2) 0071 8,464,000 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 55,033,000 2.b
3. Federal funds sold and securities purchased under agreements to
resell: RCON
a. Federal funds sold in domestic offices B987 9,992,000 3.a
RCFD
b. Securities purchased under agreements to resell (3) B989 8,761,000 3.b
4. Loans and lease financing receivables (from Schedule RC-C):
a. Loans and leases held for sale 5369 4,574,000 4.a
b. Loans and leases, net of unearned income B528 111,653,000 4.b
c. LESS: Allowance for loan and lease losses 3123 3,503,000 4.c
d. Loans and leases, net of unearned income and allowance
(item 4.b minus 4.c) B529 108,150,000 4.d
5. Trading assets (from Schedule RC-D) 3545 5,537,000 5
6. Premises and fixed assets (including capitalized leases) 2145 1,250,000 6
7. Other real estate owned (from Schedule RC-M) 2150 70,000 7
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 425,000 8
9. Customers' liability to this bank on acceptances outstanding 2155 237,000 9
10. Intangible assets:
a. Goodwill 3163 610,000 10.a
b. Other intangible assets (from Schedule RC-M) 0426 62,000 10.b
11. Other assets (from Schedule RC-F) 2160 8,621,000 11
12. Total assets (sum of items 1 through 11) 2170 226,331,000 12

- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
(3) Includes all securities resale agreements in domestic and foreign offices,
regardless of maturity.

BANK ONE, NA FFIEC 031
- ------------------------------------------------------------- RC-2
Legal Title of Bank
Transmitted to EDS as 0238103 on 05/12/2003 at 05:12:15 CST
FDIC Certificate Number - 03618 13

SCHEDULE RC--CONTINUED

Dollar Amounts in Thousands Bil | Mil | Thou
- ----------------------------------------------------------------------------------------------------------------------------

LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from RCON
Schedule RC-E, part I) 2200 123,300,000 13.a
(1) Noninterest-bearing (1) 6631 43,942,000 13.a.1
(2) Interest-bearing 6636 79,358,000 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs RCFN
(from Schedule RC-E, part II) 2200 21,326,000 13.b
(1) Noninterest-bearing 6631 286,000 13.b.1
(2) Interest-bearing 6636 21,040,000 13.b.2
14. Federal funds purchased and securities sold under agreements to
repurchase: RCON
a. Federal funds purchased in domestic offices (2) B993 8,311,000 14.a
RCFD
b. Securities sold under agreements to repurchase (3) B995 3,764,000 14.b
15. Trading liabilities (from Schedule RC-D) 3548 4,843,000 15
16. Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases) (from Schedule RC-M) 3190 28,739,000 16
17. Not applicable
18. Bank's liability on acceptances executed and outstanding 2920 237,000 18
19. Subordinated notes and debentures(4) 3200 5,036,000 19
20. Other liabilities (from Schedule RC-G) 2930 13,105,000 20
21. Total liabilities (sum of items 13 through 20) 2948 208,661,000 21
22. Minority interest in consolidated subsidiaries 3000 109,000 22
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus 3838 0 23
24. Common stock 3230 201,000 24
25. Surplus (exclude all surplus related to preferred stock) 3839 9,177,000 25
26. a. Retained earnings 3632 8,120,000 26.a
b. Accumulated other comprehensive income (5) B530 63,000 26.b
27. Other equity capital components (6) A130 0 27
28. Total equity capital (sum of items 23 through 27) 3210 17,561,000 28
29. Total liabilities, minority interest, and equity capital (sum of
items 21, 22, and 28) 3300 226,331,000 29

Memorandum
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.

RCFD NUMBER

1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external auditors as of any date during 2002 6724 2 M.1

1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Attestation on bank management's assertion on the effectiveness of the
bank's internal control over financial reporting by a certified public
accounting firm
4 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
5 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
6 = Review of the bank's financial statements by external auditors
7 = Compilation of the bank's financial statements by external auditors
8 = Other audit procedures (excluding tax preparation work)
9 = No external audit work

- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Report overnight Federal Home Loan Bank advances in Schedule RC. Item 16,
"other borrowed money."
(3) Includes all securities repurchase agreements in domestic and foreign
offices, regardless of maturity.
(4) Includes limited-life preferred stock and related surplus.
(5) Includes net unrealized holding gains (losses) on available-for-sale
securities, accumulated net gains (losses) on cash flow hedges, cumulative
foreign currency translation adjustments, and minimum pension liability
adjustments.
(6) Includes treasury stock and unearned Employee Stock Ownership Plan shares.

Exhibit 25.2