-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 Rxm9NfJOf/Syd2+VJHiibSlbhK3JrA29kY3js6jLltB56scxT0qE5rrXYZUXfClQ
 t6YuzS++NBf1qfI93aEbjw==

<SEC-DOCUMENT>0000912057-01-520705.txt : 20010622
<SEC-HEADER>0000912057-01-520705.hdr.sgml : 20010622
ACCESSION NUMBER:		0000912057-01-520705
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		9
CONFORMED PERIOD OF REPORT:	20010619
ITEM INFORMATION:		
ITEM INFORMATION:		
FILED AS OF DATE:		20010621

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CITIZENS COMMUNICATIONS CO
		CENTRAL INDEX KEY:			0000020520
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC & OTHER SERVICES COMBINED [4931]
		IRS NUMBER:				060619596
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		
		SEC FILE NUMBER:	001-11001
		FILM NUMBER:		1665098

	BUSINESS ADDRESS:	
		STREET 1:		HIGH RIDGE PK BLDG 3
		STREET 2:		P O BOX 3801
		CITY:			STAMFORD
		STATE:			CT
		ZIP:			06905
		BUSINESS PHONE:		2033298800

	MAIL ADDRESS:	
		STREET 1:		HIGH RIDGE PARK BLDG NO 3
		CITY:			STAMFORD
		STATE:			CT
		ZIP:			06905

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CITIZENS UTILITIES CO
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a2052437z8-k.txt
<DESCRIPTION>FORM 8K
<TEXT>

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 8-K


                                 CURRENT REPORT

                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

         Date of Report (date of earliest event reported): June 19, 2001


                         CITIZENS COMMUNICATIONS COMPANY
             (Exact name of registrant as specified in its charter)


            DELAWARE                001-11001                 06-0619596
  (State or other jurisdiction     (Commission             (I.R.S. Employer
        of incorporation)          File Number)           Identification No.)

                        3 HIGH RIDGE PARK, P.O. BOX 3801
                           STAMFORD, CONNECTICUT 06905
               (Address of Principal Executive Offices) (Zip Code)

                                 (203) 614-5600
               Registrant's Telephone Number, Including Area Code


                           NO CHANGE SINCE LAST REPORT
          -------------------------------------------------------------
          (Former name or former address, if changed since last report)
<PAGE>

ITEM 5.     OTHER EVENTS.

            Citizens Communication Company issued on June 19, 2001 18,400,000
            6-3/4% Equity Units, each of which consists of a Warrant and a
            Senior Note Due 2006. Citizens also concurrently issued 25,156,250
            shares of its Common Stock.

ITEM 7.     FINANCIAL STATEMENTS, EXHIBITS

            (c) EXHIBITS

            1.1 Underwriting Agreement, dated June 13, 2001, among Citizens
            Communications Company, Morgan Stanley & Co. Incorporated and J.P.
            Morgan Securities Inc., as representatives for the underwriters
            named therein, pertaining to the issuance of Equity Units.

            1.2 Underwriting Agreement, dated June 13, 2001, among Citizens
            Communications Company, J.P. Morgan Securities Inc. and Morgan
            Stanley & Co. Incorporated, as representatives for the underwriters
            named therein, pertaining to the issuance of Common Stock.

            4.1 Warrant Agreement, dated as of June 19, 2001, between Citizens
            Communications Company and The Chase Manhattan Bank, as Warrant
            Agent.

            4.2 Pledge Agreement, dated as of June 19, 2001, among Citizens
            Communications Company and The Bank of New York, as Collateral
            Agent, Securities Intermediary and Custodial Agent and The Chase
            Manhattan Bank, as Warrant Agent.

            4.3 Second Supplemental Indenture, dated as of June 19, 2001, to
            Senior Indenture, dated as of May 23, 2001.

            4.4 Remarketing Agreement, dated June 19, 2001, among Citizens
            Communications Company, Morgan Stanley & Co. Incorporated, as
            Remarketing Agent, and The Chase Manhattan Bank, as Warrant Agent
            and attorney-in-fact for the Holders of the Equity Units.

            4.5 Form of Senior Note due 2006.

            4.6 Form of Equity Unit (included in the Warrant Agreement filed as
            Exhibit 4.1 to this Current Report on Form 8-K).

            4.7 Form of Treasury Equity Unit (included in the Warrant Agreement
            filed as Exhibit 4.1 to this Current Report on Form 8-K).

            5.1 Validity Opinion of Winston & Strawn.
<PAGE>

                                   SIGNATURES


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

                                             CITIZENS COMMUNICATIONS COMPANY


Date: June 21, 2001                          By: /s/ Donald B. Armour
                                               --------------------------------
                                             Name:  Donald B. Armour
                                             Title: Vice President, Finance and
                                                    Treasurer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.1
<SEQUENCE>2
<FILENAME>a2052437zex-1_1.txt
<DESCRIPTION>EXHIBIT 1.1
<TEXT>

<PAGE>

                                                                     Exhibit 1.1

                                                                  EXECUTION COPY


                             UNDERWRITING AGREEMENT


                                                     June 13, 2001


Citizens Communications Company
3 High Ridge Park
Stamford, Connecticut 06905

Dear Sirs and Mesdames:

         We (the "REPRESENTATIVES" or the "UNDERWRITERS") understand that
Citizens Communications Company, a Delaware corporation (the "COMPANY"),
proposes to issue and sell 6 3/4% Equity Units described IN Schedule I hereto
(the "EQUITY UNITS").

         Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters
listed in Schedule II hereto, and the Underwriters agree, severally and not
jointly, to purchase from the Company the numbers of Equity Units set forth
opposite their names in Schedule II hereto on the terms set forth in the
Prospectus dated May 9, 2001 and the Prospectus Supplement dated June 13, 2001,
and in Schedule I hereto.

         The Underwriters will pay for the Equity Units upon delivery thereof at
the offices of Simpson Thacher & Bartlett at 10:00 a.m. (New York City time) on
June 19, 2001, or at such other time, not later than 5:00 p.m. (New York City
time) on June 26, 2001, as shall be designated by the Representatives. The time
and date of such payment and delivery are hereinafter referred to as the Closing
Date.

         All provisions contained in the document entitled Citizens
Communications Company -- Underwriting Agreement Standard Provisions (Equity
Securities) dated June 13, 2001, a copy of which is attached hereto, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Agreement to the same extent as if such provisions had been set forth in
full herein, except that if any term defined in such document is otherwise
defined herein, the definition set forth herein shall control.
<PAGE>

         Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.

                                  Very truly yours,

                                  MORGAN STANLEY & CO. INCORPORATED


                                  Acting severally on behalf of themselves and
                                       the several Underwriters named herein

                                  By:      MORGAN STANLEY & CO. INCORPORATED


                                  By:      /s/  JERRY ELLIOTT
                                       ---------------------------------------
                                         Name: Jerry Elliott
                                         Title: Managing Director


                                  J.P. MORGAN SECURITIES INC.

                                  Acting severally on behalf of themselves and
                                        the several Underwriters named herein

                                  By:      J.P. MORGAN SECURITIES INC.


                                  By:      /s/  JAMES L. STONE
                                       ---------------------------------------
                                         Name: James L. Stone
                                         Title: Managing Director


Accepted:

CITIZENS COMMUNICATIONS COMPANY


By:  /s/ DONALD B. ARMOUR
    ---------------------------------------------
     Name: Donald B. Armour
     Title: Vice President, Finance and Treasurer


                                       2
<PAGE>

                                   SCHEDULE I

<TABLE>
<S>                                              <C>
Title of Securities:                             6 3/4% Equity Units
Registration Statement:                          Registration Statement No. 333-58044
Number of Underwritten Securities:               16,000,000 Equity Units
Number of Option Securities:                     2,400,000 Equity Units
Price to Public:                                 $25 per Equity Unit
Purchase Price by Underwriters:                  $25 per Equity Unit
Commission Payable to Underwriters:              $0.7500 per Equity Unit
Interest Rate on Senior Note:                    6 3/4% per annum
Specified funds for payment of purchase price:   Federal (same day) funds
Reference Price:                                 $12.10
Threshold Appreciation Price:                    $14.52
Closing Price of Citizens Communications
Company Stock on June 13, 2001:                  $12.10
Payment Dates:                                   February 17, May 17, August 17 and November 17 of each
                                                 year, beginning August 17, 2001
Warrant Settlement Date:                         August 17, 2004
Maturity of Senior Note:                         August 17, 2006
Stock Exchange Listing:                          New York Stock Exchange
Closing Date:                                    June 19, 2001
Name and address of Representatives              Morgan Stanley & Co. Incorporated
                                                 1585 Broadway
                                                 New York, New York  10036

                                                 J.P. Morgan Securities Inc.
                                                 270 Park Avenue
                                                 New York, New York  10017
</TABLE>
<PAGE>

                                   SCHEDULE II

<TABLE>
<CAPTION>
                                                        NUMBER OF EQUITY UNITS
                      UNDERWRITER                           TO BE PURCHASED
<S>                                                            <C>
Morgan Stanley & Co. Incorporated...........................   3,175,600
J.P. Morgan Securities Inc..................................   3,175,600
Banc of America Securities LLC..............................   3,175,600
Salomon Smith Barney Inc....................................   3,175,600
Lehman Brothers Inc.........................................     844,800
The Buckingham Research Group                                    169,600
                       Incorporated
Dain Rauscher Incorporated..................................     211,200
First Union Securities, Inc.................................     846,400
Legg Mason Wood Walker, Incorporated........................     169,600
Mizuho International plc....................................     211,200
Robertson Stephens, Inc.....................................     422,400
TD Securities (USA) Inc.....................................     422,400
                                                             -----------
         Total..............................................  16,000,000
                                                             ===========
</TABLE>
<PAGE>

                         CITIZENS COMMUNICATIONS COMPANY

                             UNDERWRITING AGREEMENT

                               STANDARD PROVISIONS
                                 (EQUITY UNITS)


                                                     June 13, 2001


         From time to time, Citizens Communications Company, a Delaware
corporation (the "COMPANY"), may enter into one or more underwriting agreements
that provide for the sale of designated securities to the several underwriters
named therein. The standard provisions set forth herein may be incorporated by
reference in any such underwriting agreement (an "UNDERWRITING AGREEMENT"). The
Underwriting Agreement, including the provisions incorporated therein by
reference, is herein sometimes referred to as this Agreement. Terms defined in
the Underwriting Agreement are used herein as therein defined.

         The designated securities will consist of Equity Units (the
"UNDERWRITTEN SECURITIES"). Each Equity Unit will consist of (a) a warrant, also
referred to herein as a stock purchase contract (a "Warrant" or "PURCHASE
CONTRACT") under which the holder of the Equity Unit will purchase from the
Company on a date specified in the Underwriting Agreement, for an amount in cash
equal to the stated amount per Security of $25 (the "STATED AMOUNT"), a number
of shares of common stock, par value $.25 per share, of the Company (the "COMMON
STOCK"), as set forth in such Warrant, and (b) a Senior Note (a "SENIOR NOTE").
For every 40 Equity Units, 40 Treasury Equity Units ("TREASURY EQUITY UNITS")
may be created by substituting U.S. treasury securities for the Senior Notes.
Additionally, the Company may issue and sell to the several Underwriters, for
the sole purpose of covering over-allotments in connection with the sale of the
Underwritten Securities, at the option of the Underwriters, up to the amount of
additional Equity Units (the "OPTION SECURITIES") specified in the Underwriting
Agreement. The Underwritten Securities and any Option Securities are herein
referred to as the "SECURITIES". In accordance with the terms of a Warrant
Agreement (the "WARRANT AGREEMENT" also referred to as the "PURCHASE CONTRACT
AGREEMENT"), to be entered into between the Company and The Chase Manhattan
Bank, as Warrant Agent (the "WARRANT AGENT"), the holders of the Equity Units
will pledge the Senior Notes to The Bank of New York, as Collateral Agent (the
"COLLATERAL AGENT"), pursuant to a Pledge Agreement (the "PLEDGE AGREEMENT") to
be entered into between the Company and the Collateral Agent, to secure the
holders' obligations to purchase Common Stock under the Warrants. The Warrants,
the Warrant Agreement and the Pledge Agreement are herein collectively referred
to as the "EQUITY UNIT AGREEMENTS". The Senior Notes will be issued pursuant to
an Indenture (the "INDENTURE"), between the Company and The Chase Manhattan
Bank, as trustee (the "INDENTURE TRUSTEE").

         The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to
Common Stock,
<PAGE>

common stock warrants, debt securities and debt warrants, units thereof, and
certain other securities and has filed with, or transmitted for filing to, or
shall promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "PROSPECTUS SUPPLEMENT") specifically relating to the
Equity Units pursuant to Rule 424 under the Securities Act of 1933, as amended
(the "SECURITIES ACT"). The term "REGISTRATION STATEMENT" means the registration
statement, including the exhibits thereto, as amended to the date of this
Agreement. The term "BASIC PROSPECTUS" means the prospectus included in the
Registration Statement. The term "PROSPECTUS" means the Basic Prospectus
together with the Prospectus Supplement. The term "PRELIMINARY PROSPECTUS" means
a preliminary prospectus supplement specifically relating to the Equity Units,
together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus", "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"SUPPLEMENT", "AMENDMENT" and "AMEND" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").

         1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to and agrees with each of the Underwriters that:

                  (a) The Registration Statement has become effective; no stop
         order suspending the effectiveness of the Registration Statement is in
         effect, and no proceedings for such purpose are pending before or
         threatened by the Commission.

                  (b) (i) Each document, if any, filed or to be filed pursuant
         to the Exchange Act and incorporated by reference in the Prospectus
         complied when filed or will comply when so filed in all material
         respects with the Exchange Act and the applicable rules and regulations
         of the Commission thereunder and none of such documents (other than the
         Financial Statements contained in the Current Reports on Form 8-K filed
         on May 7, 2001, February 13, 2001 and November 14, 2000 (exclusive of
         the pro forma financial information contained therein) (the "Excluded
         Information") as to which the Company makes no representation)
         contained an untrue statement of a material fact or omitted to state a
         material fact necessary to make the statements in such documents, in
         light of the circumstances under which they were made, not misleading,
         (ii) the Registration Statement, when it became effective, did not
         contain, and the Registration Statement, as amended or supplemented, if
         applicable, will not contain any untrue statement of a material fact or
         omit to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading, (iii) the
         Registration Statement (as of its effective date) and the Prospectus
         (as of the date of the then most recent supplement thereto) complied,
         and, as amended or supplemented, if applicable, will comply in all
         material respects with the Securities Act and the applicable rules and
         regulations of the Commission thereunder and did not and, as amended or
         supplemented, if applicable, will not contain at the time of such
         amendment, any untrue statement of a material fact or omit to state a
         material fact required to be stated therein or necessary in order to
         make the statements therein, in light of the circumstances under which
         they were made, not misleading, and (iv) the Prospectus does not
         contain and, as amended or supplemented, if applicable, will not
         contain any untrue statement of a material fact or omit to state a


                                       6
<PAGE>

         material fact necessary to make the statements therein, in the light of
         the circumstances under which they were made, not misleading, except
         that the representations and warranties set forth in this paragraph do
         not apply (A) to statements or omissions in the Registration Statement
         or the Prospectus based upon information relating to any Underwriter
         furnished to the Company in writing by such Underwriter through the
         Representatives expressly for use therein or (B) to that part of the
         Registration Statement that constitutes the Statement of Eligibility
         (Form T-1) under the Trust Indenture Act of 1939, as amended (the
         "TRUST INDENTURE ACT"), of the Indenture Trustee.

                  (c) The Company has been duly incorporated, is validly
         existing as a corporation in good standing under the laws of the
         jurisdiction of its incorporation, has the corporate power and
         authority to own its property and to conduct its business as described
         in the Prospectus and is duly qualified to transact business and is in
         good standing in each jurisdiction in which the conduct of its business
         or its ownership or leasing of property requires such qualification,
         except to the extent that the failure to be so qualified or be in good
         standing would not have a material adverse effect on the Company and
         its subsidiaries, taken as a whole.

                  (d) Each subsidiary of the Company set forth on Schedule 1
         attached hereto (each, a "SIGNIFICANT SUBSIDIARY") has been duly
         incorporated, is validly existing as a corporation in good standing
         under the laws of the jurisdiction of its incorporation, has the
         corporate power and authority to own its property and to conduct its
         business as described in the Prospectus and is duly qualified to
         transact business and is in good standing in each jurisdiction in which
         the conduct of its business or its ownership or leasing of property
         requires such qualification, except to the extent that the failure to
         be so qualified or be in good standing would not have a material
         adverse effect on the Company and its subsidiaries, taken as a whole;
         all of the issued shares of capital stock of each Significant
         Subsidiary, other than Electric Lightwave, Inc. ("ELI"), of the Company
         have been duly and validly authorized and issued, are fully paid and
         non-assessable and are owned directly, free and clear of all liens,
         encumbrances, equities or claims; all of the shares of capital stock of
         ELI that are issued to the Company have been duly and validly
         authorized and issued, are fully paid and non-assessable and are owned
         directly, free and clear of all liens, encumbrances, equities or
         claims.

                  (e) This Agreement has been duly authorized, executed and
         delivered by the Company and constitutes a valid and legally binding
         agreement of the Company, enforceable in accordance with its terms,
         subject to applicable bankruptcy, insolvency, fraudulent conveyance,
         reorganization, moratorium or similar laws affecting creditors' rights
         generally, general principles of equity and an implied covenant of good
         faith and fair dealing.

                  (f) The Indenture has been duly qualified under the Trust
         Indenture Act and has been duly authorized, executed and delivered by
         the Company and is a valid and legally binding agreement of the
         Company, enforceable in accordance with its terms, subject to
         applicable bankruptcy, insolvency, fraudulent conveyance,
         reorganization, moratorium or similar laws affecting creditors' rights
         generally, general principles of equity and an implied covenant of good
         faith and fair dealing.


                                       7
<PAGE>

                  (g) The execution and delivery by the Company of, and the
         performance by the Company of its obligations under, this Agreement,
         the Indenture, the Equity Units, the Treasury Equity Units, the Senior
         Notes, the Warrants, the Warrant Agreement, the Remarketing Agreement
         and the Pledge Agreement, as applicable, (collectively, the
         "TRANSACTION DOCUMENTS") will not (i) conflict with or result in a
         breach or violation of any of the terms or provisions of, or constitute
         a default under, or result in the creation or imposition of any lien,
         charge or encumbrance upon any property or assets of the Company or any
         of its subsidiaries pursuant to any indenture, mortgage, deed of trust,
         loan agreement or other material agreement or instrument to which the
         Company or any of its subsidiaries is a party or by which the Company
         or any of its subsidiaries is bound or to which any of the property or
         assets of the Company or any of its subsidiaries is subject, except
         where such violation, default, lien, charge, or encumbrance would not
         have a material adverse effect on the consolidated financial position,
         results of operations or business of the Company and its subsidiaries,
         taken as a whole (a "MATERIAL ADVERSE EFFECT"); (ii) contravene any
         provision of applicable law or the certificate of incorporation or
         by-laws of the Company or any agreement or other instrument binding
         upon the Company or any of its subsidiaries that is material to the
         Company and its subsidiaries, taken as a whole, or (iii) result in the
         violation of any judgment, order or decree of any governmental body,
         agency or court having jurisdiction over the Company or any of its
         subsidiaries, and no consent, approval, authorization or order of, or
         qualification with, any governmental body or agency is required for the
         performance by the Company of its obligations under any of the
         Transaction Documents, except such as may be required by the securities
         or Blue Sky laws of the various states in connection with the offer and
         sale of the Equity Units and except where any such violation or failure
         to obtain a consent or other approval would not cause a Material
         Adverse Effect or prevent the consummation of the transaction
         contemplated hereby.

                  (h) Each Transaction Document conforms in all material
         respects to the description thereof contained in the Prospectus.

                  (i) Since the date as of which information is given in the
         Registration Statement and the Prospectus (exclusive of amendments or
         supplements after the date hereof) and as of the date of the
         Underwriting Agreement, except as otherwise stated therein, (i) there
         has been no material adverse change in the condition, financial or
         otherwise, or in the earnings, business affairs, management or
         operations of the Company and its subsidiaries, taken as a whole,
         whether or not arising in the ordinary course of business, (ii) none of
         the Company or any of its subsidiaries has incurred any material
         liability or obligation, direct or contingent, other than in the
         ordinary course of business, (iii) none of the Company or any of its
         subsidiaries has entered into any material transaction other than in
         the ordinary course of business and (iv) there has not been any change
         in the capital stock or long-term debt of the Company or any of its
         subsidiaries, or any dividend or distribution of any kind declared,
         paid or made by the Company or any of its subsidiaries on any class of
         its capital stock, or any redemption in respect thereof, except that
         capital stock may have changed due to the exercise of stock options in
         the ordinary course of business.


                                       8
<PAGE>

                  (j) There are (i) no legal or governmental proceedings pending
         or, to the knowledge of the Company, threatened to which the Company or
         any of its subsidiaries is a party or to which any of the properties of
         the Company or any of its subsidiaries is subject that are required to
         be described in the Registration Statement or the Prospectus and are
         not so described and which, if determined adversely to the Company or
         any of its subsidiaries, would have a Material Adverse Effect or (ii)
         any statutes, regulations, contracts or other documents that are
         required to be described in the Registration Statement or the
         Prospectus or to be filed or incorporated by reference as exhibits to
         the Registration Statement that are not described, filed or
         incorporated as required.

                  (k) Each preliminary prospectus filed as part of the
         registration statement as originally filed or as part of any amendment
         thereto, or filed pursuant to Rule 424 under the Securities Act,
         complied when so filed in all material respects with the Securities Act
         and the applicable rules and regulations of the Commission thereunder
         and did not and, as supplemented will not contain at the time of such
         supplement, any untrue statement of a material fact or omit to state a
         material fact or omit to state a material fact required to be stated
         therein or necessary in order to make the statements therein, in light
         of the circumstances under which they were made, not misleading.

                  (l) The Company is not and, after giving effect to the
         offering and sale of the Equity Units and the application of the
         proceeds thereof as described in the Prospectus, will not be an
         "investment company" or a company controlled by an investment company
         as such term is defined in the Investment Company Act of 1940, as
         amended, and the rules and regulations of the Commission thereunder.

                  (m) The Company is not a "holding company" within the meaning
         of the Public Utility Holding Company Act of 1935, as amended (the
         "PUBLIC UTILITY HOLDING COMPANY ACT"), and the rules and regulations of
         the Commission thereunder.

                  (n) The Company and its subsidiaries (i) are, to the Company's
         best knowledge, in compliance with any and all applicable foreign,
         federal, state and local laws and regulations relating to the
         protection of human health and safety, the environment or hazardous or
         toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
         LAWS"), (ii) have received all permits, licenses or other approvals
         required of them under applicable Environmental Laws to conduct their
         respective businesses and (iii) are, to the Company's best knowledge,
         in compliance with all terms and conditions of any such permit, license
         or approval, except where such noncompliance with Environmental Laws,
         failure to receive required permits, licenses or other approvals or
         failure to comply with the terms and conditions of such permits,
         licenses or approvals would not have a Material Adverse Effect.

                  (o) There are no costs or liabilities associated with
         Environmental Laws (including, without limitation, any capital or
         operating expenditures required for clean-up, closure of properties or
         compliance with Environmental Laws or any permit, license or approval,
         any related constraints on operating activities and any potential
         liabilities to third parties), which would have a Material Adverse
         Effect.


                                       9
<PAGE>

                  (p) KPMG LLP are independent certified public accountants with
         respect to the Company and its subsidiaries and, to the best of the
         Company's knowledge, Arthur Andersen LLP are independent certified
         public accountants with respect to GTE Minnesota Inc., Frontier
         Incumbent Local Exchange Carrier Businesses and Qwest Communications
         International Inc. and PricewaterhouseCoopers LLP are independent
         certified public accountants with respect to Frontier Incumbent Local
         Exchange Carrier Businesses each (i) as required by the Securities Act
         and the rules and regulations of the Commission thereunder and (ii)
         within the meaning of Rule 101 of the Code of Professional Conduct of
         the American Institute of Certified Public Accountants and its
         interpretations and rulings thereunder. The historical and pro forma
         financial statements (including the related notes) contained or
         incorporated by reference in the Prospectus comply as to form in all
         material respects with the applicable requirements under the Securities
         Act and the Exchange Act (except that certain supporting schedules are
         omitted); such financial statements (other than the Excluded
         Information as to which the Company makes no representation) have been
         prepared in accordance with generally accepted accounting principles
         consistently applied throughout the periods covered thereby and fairly
         present in all material respects the financial position of the entities
         purported to be covered thereby at the respective dates indicated and
         the results of their operations and their cash flows for the respective
         periods indicated; and the financial information contained or
         incorporated by reference in the Prospectus (other than the Excluded
         Information as to which the Company makes no representation) is derived
         from the accounting records of the Company and its subsidiaries and
         fairly present in all material respects the information purported to be
         shown thereby. The other historical and pro forma financial and
         statistical information and data included in the Prospectus (other than
         the Excluded Information as to which the Company makes no
         representation) are, in all material respects, fairly presented.

                  (q) The Company and each of its subsidiaries possess all
         material licenses, certificates, authorizations and permits issued by,
         and have made all declarations and filings with, the appropriate
         federal, state or foreign regulatory agencies or bodies which are
         necessary or desirable for the ownership of their respective properties
         or the conduct of their respective businesses as described in the
         Prospectus, except where the failure to possess or make the same would
         not, singularly or in the aggregate, have a Material Adverse Effect,
         and neither the Company nor any of its subsidiaries has received
         notification of any revocation or modification of any such license,
         certificate, authorization or permit or has any reason to believe that
         any such license, certificate, authorization or permit will not be
         renewed in the ordinary course in each case where such revocation,
         modification or failure of renewal would have a Material Adverse
         Effect.

                  (r) The authorized capital stock of the Company conforms as to
         legal matters to the description thereof contained in the Prospectus.

                  (s) The shares of Common Stock outstanding prior to the
         issuance of the Equity Units have been duly authorized and are validly
         issued, fully paid and non-assessable, and are not subject to any
         preemptive or similar rights.


                                       10
<PAGE>

                  (t) The shares of Common Stock to be issued and sold by the
         Company pursuant to the settlement of the Warrants have been duly and
         validly authorized and reserved for issuance; such shares of Common
         Stock, when issued and delivered in accordance with the provisions of
         the Equity Unit Agreements, will be validly issued, fully paid and
         non-assessable; and the issuance of such shares of Common Stock will
         not be subject to any preemptive or similar rights.

                  (u) The shares of Common Stock outstanding prior to the
         issuance of the Equity Units are, and upon issuance the shares of
         Common Stock to be issued and sold by the Company pursuant to the
         settlement of the Warrants will be, listed on the New York Stock
         Exchange.

                  (v) The Equity Units and the Equity Unit Agreements have been
         duly authorized and, at the Closing Date or, in the case of Option
         Securities and Warrants constituting part of the Option Securities, the
         Option Closing Date (as defined herein), will have been duly executed
         and delivered by the Company, and, as of the Closing Date or the Option
         Closing Date, as the case may be, assuming due authorization, execution
         and delivery by parties thereto other than the Company, the Equity Unit
         Agreements will constitute valid and binding agreements of the Company,
         enforceable in accordance with their terms, except to the extent
         limited by bankruptcy, insolvency, fraudulent conveyance,
         reorganization or moratorium laws or by other laws now or hereafter in
         effect relating to or affecting the enforcement of creditors' rights
         and by general equitable principles (regardless of whether considered
         in a proceeding in equity or at law), an implied covenant of good faith
         and fair dealing and consideration of public policy, and Federal or
         state securities law limitations on indemnification and contribution
         (the "ENFORCEABILITY EXCEPTIONS"); PROVIDED, HOWEVER, that upon the
         occurrence of a Termination Event (as defined in the Warrant Agreement)
         due to a bankruptcy filing by or against the Company,(a) Section
         365(e)(1) of the United States Bankruptcy Code (11 U.S.C. Sections
         1101-1330, as amended) should not substantively limit the provisions of
         Section 5.07 of the Warrant Agreement that require termination of
         Warrants and the rights and obligations of the holders thereof to
         purchase shares of Common Stock, and (b) Section 541 of the Bankruptcy
         Code should not substantively limit the provisions of Section 3.15 of
         the Warrant Agreement or Section 5.4 of the Pledge Agreement that
         provide for the release of the Collateral Agent's security interest in
         (1) Treasury Securities (as defined in the Warrant Agreement), (2) the
         Applicable Ownership Interests (as defined in the Warrant Agreement) of
         the Treasury Portfolio, or (3) the Senior Notes;

                  (w) The Remarketing Agreement (the "INITIAL REMARKETING
         AGREEMENT") between Morgan Stanley & Co. Incorporated and the Company
         and the Supplemental Remarketing Agreement between Morgan Stanley & Co.
         Incorporated, the Chase Manhattan Bank and the Company (the
         "SUPPLEMENTAL REMARKETING AGREEMENT" and, together with the Remarketing
         Agreement, the "REMARKETING AGREEMENT") has been duly authorized by the
         Company and when executed and delivered by the Company will constitute
         a valid and binding agreement of the Company, enforceable in accordance
         with its terms, except to the extent limited by the Enforceability
         Exceptions; and the Remarketing Agreement conforms in all material
         respects to the description thereof in the Prospectus;


                                       11
<PAGE>

                  (x) The Senior Notes have been duly authorized, and, when
         issued and delivered pursuant to the Indenture, will have been duly
         executed, authenticated, issued and delivered and will constitute valid
         and binding obligations of the Company, enforceable against the Company
         in accordance with their terms, except to the extent limited by the
         Enforceability Exceptions; and entitled to the benefits provided by the
         Indenture.

         2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to sell
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Equity Units (the "UNDERWRITTEN SECURITIES")
set forth in the Underwriting Agreement opposite its name at $25 per Equity Unit
(the "PURCHASE PRICE").

         On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Option Securities, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, any or all of the Option
Securities at the Purchase Price. If the Representatives, on behalf of the
Underwriters, elects to exercise such option, it shall so notify the Company in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Option Securities to be purchased by the
Underwriters and the date on which such Option Securities are to be purchased.
Such date may be the same as the Closing Date (as defined below) but not earlier
than the Closing Date nor later than ten business days after the date of such
notice. Option Securities may be purchased as provided in Section 3 hereof
solely for the purpose of covering over-allotments made in connection with the
offering of the Underwritten Securities. If any Option Securities are to be
purchased, each Underwriter agrees, severally and not jointly, to purchase the
number of Option Securities (subject to such adjustments to eliminate fractional
units as you may determine) that bears the same proportion to the total number
of Optional Securities to be purchased as the number of Underwritten Securities
set forth in the Underwriting Agreement opposite the name of such Underwriter
bears to the total number of Underwritten Securities.

         The Company hereby agrees that, without the prior written consent of
the Representatives, on behalf of the Underwriters, the Company will not, during
the period ending 90 days after the date of the final prospectus supplement
included in the Prospectus, (i) register, offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any Equity Units, Warrants or
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Equity Units, Warrants or Common Stock, or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Equity Units, Warrants or Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Equity Units, Warrants or Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Equity Units or Warrants (or the securities underlying either thereof) to be
issued in the transactions contemplated hereby, (B) the issuance by the Company
of shares of Common Stock pursuant to, or the grant of options under the
Company's existing stock option, employee benefit or dividend reinvestment plans
(as


                                       12
<PAGE>

described in the Prospectus), (C) the issuance by the Company of shares of
Common Stock in certain private sales (as described in the Prospectus), (D) the
issuance by the Company of 17,500,000 of Common stock concurrent with the
offering of the Equity Units (as described in the Prospectus).

         3. TERMS OF PUBLIC OFFERING. The Company is advised by the
Representatives that the Underwriters propose to make a public offering of their
respective portions of the Equity Units as soon after this Agreement has become
effective as in the Representatives' judgment is advisable. The Company is
further advised by the Representatives that the Equity Units are to be offered
to the public initially at $25 per Equity Unit (the "PUBLIC OFFERING PRICE") and
to certain dealers selected by you at the Public Offering Price.

         As compensation to the Underwriters for their commitments hereunder,
the Company hereby agrees to pay at the Closing Date to the Representatives for
the accounts of the several Underwriters a commission in the amount per Security
set forth in the Underwriting Agreement (the "UNDERWRITING COMMISSION").

         4. PAYMENT AND DELIVERY. Payment for the Underwritten Securities shall
be made to the Company in Federal or other funds immediately available in New
York City against delivery to the Representatives of the certificates for such
Underwritten Securities for the respective accounts of the several Underwriters,
or delivery to a securities intermediary designated by you of such certificates
and crediting to your securities account at such securities intermediary for the
account of the several Underwriters of security entitlements in respect of the
Underwritten Securities, against, in either case, crediting to the securities
account of the Collateral Agent of security entitlements in respect of the
Senior Notes constituting a part of the Underwritten Securities as set forth in
the Pledge Agreement, and payment to the Representatives of the Underwriting
Commission with respect to the Underwritten Securities by wire transfer in
immediately available funds to an account specified by you to the Company shall
be made at the time and date set forth in the Underwriting Agreement. The time
and date of such payment are hereinafter referred to as the "CLOSING DATE".

         Payment for the Option Securities shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
to the Representatives of the certificates for such Option Securities for the
respective accounts of the several Underwriters, or delivery to a securities
intermediary designated by the Representatives of such certificates and
crediting to the Representatives' securities account at such securities
intermediary for the accounts of the several Underwriters of security
entitlements in respect of such Option Securities, against, in either case,
crediting to the securities account of the Collateral Agent of security
entitlements in respect of the Senior Notes constituting a part of such Option
Securities as set forth in the Pledge Agreement, and payment to the
Representatives of the Underwriting Commission with respect to such Option
Securities in the manner set forth above shall be made at 10:00 a.m., New York
City time, on the date specified in the notice described in Section 2 or at such
other time on the same or on such other date, in any event not later than 10
business days after the expiration of the Underwriters' option to purchase
Option Securities as shall be designated in writing by you. The time and date of
such payment are hereinafter referred to as the "OPTION CLOSING DATE".


                                       13
<PAGE>

         The certificates, if any, for the Equity Units purchased by the
Underwriters shall be registered in such names and in such denominations as the
Representatives shall request in writing not later than one full business day
prior to the Closing Date or the Option Closing Date, as the case may be. The
certificate, if any, evidencing the Underwritten Securities or Option Securities
shall be delivered to you on the Closing Date or the Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters, with any
transfer taxes payable in connection with the transfer of the Underwritten
Securities or Option Securities to the Underwriters duly paid, against payment
of the Purchase Price and the Underwriting Commission with respect to such
Equity Units.

         5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters are subject to the following conditions:

                  (a) Subsequent to the execution and delivery of the
         Underwriting Agreement and prior to the Closing Date:

                           (i) there shall not have occurred any downgrading,
                  nor shall any notice have been given of any intended or
                  potential downgrading or of any review for a possible change
                  that does not indicate the direction of the possible change,
                  in the rating accorded any of the Company's securities by any
                  "nationally recognized statistical rating organization," as
                  such term is defined for purposes of Rule 436(g)(2) under the
                  Securities Act; and

                           (ii) there shall not have occurred any change in the
                  condition, financial or otherwise, or in the earnings,
                  business affairs, management or operations of the Company and
                  its subsidiaries, taken as a whole, from that set forth in the
                  Prospectus (exclusive of any amendments or supplements thereto
                  subsequent to the date of this Agreement) that, in the
                  judgment of the Representatives, is material and adverse and
                  that makes it, in the judgment of the Representatives,
                  impracticable to market the Equity Units on the terms and in
                  the manner contemplated in the Prospectus.

                  (b) The Underwriters shall have received on the Closing Date a
         certificate, dated the Closing Date and signed by an executive officer
         of the Company, to the effect set forth in Section 5(a)(i) above and to
         the effect that as of the Closing Date, the representations and
         warranties of the Company contained in this Agreement are true and
         correct as of the Closing Date in all material respects and that the
         Company has complied with all of the agreements and satisfied in all
         material respects all of the conditions on its part to be performed or
         satisfied hereunder on or before the Closing Date.

                  The officer signing and delivering such certificate may rely
         upon the best of his or her knowledge as to proceedings threatened.

                  (c) The Underwriters shall have received on the Closing Date
         an opinion of Winston & Strawn, outside counsel for the Company, dated
         the Closing Date, substantially to the effect that:


                                       14
<PAGE>

                  (i) the Company has been duly incorporated, is validly
         existing as a corporation in good standing under the laws of the
         jurisdiction of its incorporation, has the corporate power and
         authority to own its property and to conduct its business as described
         in the Prospectus and is duly qualified to transact business and is in
         good standing in each jurisdiction in which the conduct of its business
         or its ownership or leasing of property requires such qualification,
         except to the extent that the failure to be so qualified or be in good
         standing would not, singularly or in the aggregate, have a material
         adverse effect on the Company and its subsidiaries, taken as a whole;

                  (ii) the Company has an authorized capitalization as set forth
         in the Prospectus;

                  (iii) each Significant Subsidiary of the Company has been duly
         incorporated, is validly existing as a corporation in good standing
         under the laws of the jurisdiction of its incorporation, has the
         corporate power and authority to own its property and to conduct its
         business as described in the Prospectus and is duly qualified to
         transact business and is in good standing in its jurisdiction of
         incorporation except to the extent that the failure to be so qualified
         or be in good standing would not have a material adverse effect on the
         Company and its subsidiaries, taken as a whole;

                  (iv) the Company has full right, power and authority to
         execute and deliver each of the Transaction Documents and to perform
         its obligations thereunder, and all corporate action required to be
         taken for the due and proper authorization, execution and delivery of
         each of the Transaction Documents and the consummation of the
         transactions contemplated thereby by the Company have been duly and
         validly taken;

                  (v) this Agreement has been duly authorized, executed and
         delivered by the Company;

                  (vi) the Indenture has been duly qualified under the Trust
         Indenture Act and has been duly authorized, executed and delivered by
         the Company and is a valid and legally binding agreement of the
         Company, enforceable against the Company in accordance with its terms;

                  (vii) the execution and delivery by the Company of, and the
         performance by the Company of its obligations under, this Agreement,
         the Indenture, the Equity Units, the Notes and the Equity Unit
         Agreements will not contravene any provision of Applicable Law or the
         certificate of incorporation or by-laws of the Company or, to the best
         of such counsel's knowledge, any agreement or other instrument binding
         upon the Company or any of its subsidiaries that is set forth as an
         Exhibit to the Company's then current Annual Report on Form 10-K and
         any subsequently filed Current Reports on Form 8-K or Quarterly Reports
         on Form 10-Q or, to the best of such counsel's knowledge, any judgment,
         order or decree of any Governmental Authority having jurisdiction over
         the Company or any subsidiary, and no consent, approval, authorization
         or


                                       15
<PAGE>

         order of, or qualification with, any Governmental Authority is required
         for the performance by the Company of its obligations under this
         Agreement, the Indenture, the Equity Units or the Equity Unit
         Agreements, except such as may be required by the securities or Blue
         Sky laws of the various states in connection with the offer and sale of
         the Equity Units and except where any such contravention (other than
         with respect to the certificate of incorporation or by-laws of the
         Company) or failure to obtain such consent or other approval would not
         cause a Material Adverse Effect;

                  (viii) the descriptions in the Prospectus of statutes, legal
         and governmental proceedings and contracts and other documents are
         accurate in all material respects; the statements (A) in the Prospectus
         under the captions "Certain Provisions of the Purchase Contracts, the
         Purchase Contract Agreement and the Pledge Agreement", "Certain ERISA
         Considerations", "Description of the Senior Notes", "Description of
         Debt Securities", "Description of Capital Stock", "Description of
         Warrants," "Description of the Equity Units", "Description of the
         Purchase Contracts", "Plan of Distribution", and Underwriters (B) in
         the Registration Statement under Item 15, (C) in "Item 3 - Legal
         Proceedings" of the Company's most recent annual report on Form 10-K
         incorporated by reference in the Prospectus and (D) in "Item 1 - Legal
         Proceedings" of Part II of the Company's quarterly reports on Form
         10-Q, if any, filed since such annual report, in each case insofar as
         such statements constitute summaries of the legal matters, documents,
         conclusions or proceedings referred to therein in each case in all
         material respects, fairly present the information called for with
         respect to such legal matters, documents, conclusions and proceedings
         and fairly summarize the matters referred to therein; and after due
         inquiry, such counsel does not know of any legal or governmental
         proceedings pending or threatened to which the Company or any of its
         subsidiaries is a party or to which any of the properties of the
         Company or any of its subsidiaries is subject that are required to be
         described in the Registration Statement or the Prospectus and are not
         so described or of any statutes, regulations, contracts or other
         documents that are required to be described in the Registration
         Statement or the Prospectus or to be filed or incorporated by reference
         as exhibits to the Registration Statement that are not described, filed
         or incorporated as required;

                  (ix) the Company is not and, after giving effect to the
         offering and sale of the Equity Units and the application of the
         proceeds thereof as described in the Prospectus, will not be an
         "investment company" within the meaning of the Investment Company Act
         of 1940, as amended and the rules and regulations of the Commission
         thereunder, without taking into account of any exemption under the
         Investment Company Act arising out of the number of holders of the
         Company's securities;

                  (x) the Company is not a "holding company" within the meaning
         of the Public Utility Holding Company Act and the rules and regulations
         of the Commission thereunder; and


                                       16
<PAGE>

                  (xi) such counsel (A) is of the opinion that each document, if
         any, filed pursuant to the Exchange Act and incorporated by reference
         in the Prospectus (except for financial statements and schedules and
         other financial and statistical data included or incorporated by
         reference therein as to which such counsel need not express any
         opinion) complied when so filed as to form in all material respects
         with the Exchange Act and the applicable rules and regulations of the
         Commission thereunder, (B) has no reason to believe that (except for
         financial statements and schedules and other financial and statistical
         data as to which such counsel need not express any belief and except
         for that part of the Registration Statement that constitutes the Form
         T-1 heretofore referred to) the Registration Statement, when it became
         effective, contained any untrue statement of a material fact or omitted
         to state a material fact required to be stated therein or necessary to
         make the statements therein not misleading, (C) is of the opinion that
         the Registration Statement, as of its effective date, and Prospectus,
         as of the date of the then most recent supplement thereto, (except for
         financial statements and schedules and other financial and statistical
         data included or incorporated by reference therein as to which such
         counsel need not express any opinion) comply as to form in all material
         respects with the Securities Act and the applicable rules and
         regulations of the Commission thereunder and (D) has no reason to
         believe that (except for financial statements and schedules and other
         financial and statistical data as to which such counsel need not
         express any belief) the Prospectus, as of the date such opinion is
         delivered and as supplemented or amended to such date, contains any
         untrue statement of a material fact or omits to state a material fact
         necessary in order to make the statements therein, in the light of the
         circumstances under which they were made, not misleading.

                  (xii) The Equity Units and the Equity Unit Agreements have
         been duly authorized, executed and delivered by the Company and,
         assuming (A) due execution and delivery of the Warrants and the Warrant
         Agreement by the Warrant Agent, (B) due execution, delivery and
         authentication of the Equity Units by the Trustee and upon payment and
         delivery thereof in accordance with the Underwriting Agreement, and (C)
         that the Equity Units and the Equity Unit Agreements are the valid and
         legally binding obligations of the Warrant Agent, constitute valid and
         legally binding obligations of the Company, enforceable against the
         Company in accordance with their respective terms and entitled to the
         benefits of the Warrant Agreement, except as limited by the
         Enforceability Exceptions; PROVIDED, HOWEVER, that upon the occurrence
         of a Termination Event (as defined in the Warrant Agreement) due to a
         bankruptcy filing by or against the Company,(a) Section 365(e)(1) of
         the United States Bankruptcy Code (11 U.S.C. Sections 1101-1330, as
         amended) should not substantively limit the provisions of Section 5.07
         of the Warrant Agreement that require termination of Warrants and the
         rights and obligations of the holders thereof to purchase shares of
         Common Stock, and (b) Section 541 of the Bankruptcy Code should not
         substantively limit the provisions of Section 3.15 of the Warrant
         Agreement or Section 5.4 of the Pledge Agreement that provide for the
         release of the Collateral Agent's security interest in (1) Treasury
         Securities (as defined in the Warrant Agreement), (2) the


                                       17
<PAGE>

         Applicable Ownership Interests (as defined in the Warrant Agreement) of
         the Treasury Portfolio, or (3) the Senior Notes;

                  (xiii) The shares of Common Stock to be issued and sold by the
         Company pursuant to the settlement of the Warrants have been duly and
         validly authorized and reserved for issuance, and such shares of Common
         Stock, when issued and delivered in accordance with the provisions of
         the Equity Unit Agreements, will be validly issued, fully paid and
         non-assessable, and the issuance of such shares of Common Stock will
         not be subject to any preemptive or similar rights under Federal or New
         York law or the Company's certificate of incorporation or by-laws;

                  (xiv) The Senior Notes have been duly authorized, and, when
         issued and delivered pursuant to the Indenture, will have been duly
         executed, authenticated, issued and delivered and will constitute valid
         and binding obligations of the Company, enforceable against the Company
         in accordance with their terms; and entitled to the benefits provided
         by the Indenture.

                  (xv) Subject to the qualifications and limitations stated
         therein, the statements set forth in the Prospectus under the caption
         "Material United States Federal Income Tax Consequences" insofar as
         they purport to constitute summaries of matters of United States
         federal income tax laws and regulations or legal conclusions with
         respect thereto, constitute accurate summaries of the matters described
         therein in all material respects;

                  (xvi) The Remarketing Agreement has been duly authorized,
         executed and delivered by the Company;

                  (xvii) The Pledge Agreement creates in favor of the Collateral
         Agent for the benefit of the Company a security interest under the New
         York UCC in the investment property identified on Schedule 1 hereto
         (the "PLEDGED SECURITIES"). The Collateral Agent will have a perfected
         security interest in the Pledged Securities for the benefit of the
         Company under the New York UCC upon delivery to the Collateral Agent
         for the benefit of the Company in the State of New York of the
         certificate representing the Pledged Securities in registered form,
         endorsed to the Collateral Agent or in blank by an effective
         endorsement or accompanied by undated bond powers with respect thereto
         duly endorsed to the Collateral Agent or in blank by an effective
         endorsement. Assuming the Collateral Agent and the Company do not have
         notice of any adverse claim to the Pledged Securities, the Collateral
         Agent will acquire the security interest in the Pledged Securities for
         the benefit of the Company free of any adverse claim; and

                  (xviii) The security interest of the Collateral Agent in
         security entitlements with respect to the Pledged Senior Notes (as
         defined under the Pledge Agreement) that are from time to time credited
         to the Collateral Account (as described in Section 4 of the Pledge
         Agreement) will be perfected, and the Collateral Agent will have
         "control" (within the meaning of Article 8-106 of the New York UCC)
         thereof, once the Securities Intermediary has indicated by book


                                       18
<PAGE>

         entry that such financial assets have been credited to the Collateral
         Account, provided that, the Securities Intermediary has agreed that it
         will comply with "entitlement orders" originated by the Collateral
         Agent without further consent by the "entitlement holder" (as each is
         defined in Article 8-102(a)(7) and (8) of the New York UCC). Under
         Section 4.3 of the Pledge Agreement, the Securities Intermediary has
         agreed that it will comply with entitlement orders originated by the
         Collateral Agent, as the secured party, with respect to the Collateral
         Account without further consent by the Warrant Agent, which is the
         entitlement holder with respect to such security entitlements. Under
         Section 8-510 of the New York UCC, assuming that neither the Collateral
         Agent nor the Company has any notice of any adverse claim to such
         security entitlements, insofar as Articles 8 and 9 of the New York UCC
         are applicable thereto, no action based on an adverse claim to such
         security entitlements, whether framed in conversion, replevin,
         constructive trust, equitable lien or other theory, may be asserted
         against the Collateral Agent or the Company. In giving the opinion
         contained in this paragraph (xviii) such counsel may rely upon the
         representations of the Securities Intermediary contained in, and assume
         compliance by the Securities Intermediary with its undertakings set
         forth in the Pledge Agreement.

                  For purposes of the foregoing opinion, Winston & Strawn may
         state that (a) "Applicable Law" means only the laws of the United
         States, the State of New York and the General Corporation Law of the
         State of Delaware which, in such counsel's experience, are normally
         applicable to transactions of the type contemplated by this
         Underwriting Agreement, but without such counsel having made any
         special investigation as to the applicability of any specific law, rule
         or regulation except as specified, and (b) "Governmental Authority"
         means any New York or federal executive, legislative, judicial
         administrative or regulatory body.

                  The foregoing opinions may be subject to the following
         assumptions, qualifications and limitations:

                           (A) The opinions referred to in paragraphs 5(c)(vi)
                  and 5(c)(xiv) above are qualified to the extent that
                  enforceability may be limited by or subject to: (i) the effect
                  of bankruptcy, insolvency, reorganization, fraudulent
                  conveyance, arrangement, moratorium or other similar
                  proceedings, laws or court decisions now or hereafter in
                  effect relating to creditors' rights generally; (ii) the
                  availability of the remedies of specific performance or
                  injunctive relief; (iii) the effect of general principles of
                  equity (whether or not such enforceability is considered in a
                  proceeding in equity or at law) including, without limitation,
                  an implied covenant of good faith, fair dealing and
                  conscionability, and (iv) the possibility that rights as to
                  indemnification and contribution may be limited by applicable
                  law.

                           (B) Such counsel need not express any opinion as to
                  the severability of any provision of the Transaction
                  Documents.

                           (C) The opinions referred to in paragraphs 5(c)(vi),
                  5(c)(xii), 5(c)(xiv), 5(c)(xvii) and 5(c)(xviii) above are
                  subject to (A) the equitable powers of the


                                       19
<PAGE>

                  applicable Bankruptcy Court, including those set forth in
                  Section 105(a) of the Bankruptcy Code, (B) any procedural
                  delays (including delays resulting from the automatic stay
                  under Section 362 of the Bankruptcy Code and efforts seeking
                  to lift the automatic stay) which could affect the timing of
                  the exercise of such rights and remedies, and (C) the further
                  limitation that such counsel expresses no opinion as to
                  whether the Company may have any continuing property interest
                  in the Collateral (as defined in the Pledge Agreement) if, at
                  the time of a Termination Event due to a bankruptcy filing by
                  or against the Company, the holders of Warrants have
                  obligations other than the Obligations secured by, or the
                  Company has rights of offset or recoupment or counterclaims
                  against, the Collateral.

                  With respect to Section 5(c)(xi) above, Winston & Strawn may
         state that their opinion and beliefs are based upon their participation
         in the preparation of the Registration Statement and Prospectus and any
         amendments or supplements thereto and documents incorporated therein by
         reference and review and discussion of the contents thereof, but are
         without independent check or verification, except as specified.

                  (d) The Company shall have furnished an opinion of L. Russell
         Mitten, Vice President and General Counsel of the Company, with respect
         to FERC and all applicable state utility regulators' orders and/or
         authorizations necessary to enable the Company to issue the Equity
         Units, addressed to the Underwriters and dated the Closing Date, in
         form and substance reasonably satisfactory to the Underwriters.

                  The opinions described in Sections 5(c) and 5(d) above shall
         be rendered to the Underwriters at the request of the Company and shall
         so state therein.

                  (e) The Underwriters shall have received on the Closing Date
         an opinion of Simpson Thacher & Bartlett, special counsel for the
         Underwriters, dated the Closing Date, covering the matters referred to
         in Sections 5(c)(v), 5(c)(vi) and 5(c)(viii) (but only as to the
         statements in the Prospectus under "Description of Debt Securities",
         "Description of Warrants", "Description of Equity Units", "Description
         of the Purchase Contracts", "Description of the Senior Notes", "Certain
         Provisions of the Purchase Contracts, the Purchase Contract Agreement
         and the Pledge Agreement", "Underwriters" and "Plan of Distribution")
         and clauses 5(c)(xi)(B), 5(c)(xi)(C) and 5(c)(xi)(D) above.

                  With respect to clauses 5(c)(xi)(B), 5(c)(xi)(C) and
         5(c)(xi)(D) above, Simpson Thacher & Bartlett may state that their
         opinion and beliefs are based upon their participation in the
         preparation of the Registration Statement and Prospectus and any
         amendments or supplements thereto (but not including documents
         incorporated therein by reference) and review and discussion of the
         contents thereof (including documents incorporated therein by
         reference), but are without independent check or verification, except
         as specified.

                  (f) A written opinion of counsel shall have been furnished to
         the Underwriters by counsel to The Chase Manhattan Bank, as Warrant
         Agent, addressed to the Underwriters and dated such Closing Date, in
         form and substance satisfactory to the Underwriters, to the effect
         that:


                                       20
<PAGE>

                           (i) The Warrant Agent is duly incorporated as a New
                  York banking corporation with all necessary power and
                  authority to execute, deliver and perform its obligations
                  under the Warrant Agreement and the Pledge Agreement;

                           (ii) The execution, delivery and performance by the
                  Warrant Agent of the Warrant Agreement and the Pledge
                  Agreement, and the authentication and delivery of the Equity
                  Units and the Treasury Equity Units have been duly authorized
                  by all necessary corporate action on the part of the Warrant
                  Agent, and the Warrant Agreement and the Pledge Agreement have
                  been duly executed and delivered by the Warrant Agent, and
                  constitute the valid and binding agreements of the Warrant
                  Agent, enforceable against the Warrant Agent in accordance
                  with their terms, subject to the effects of bankruptcy,
                  insolvency, fraudulent conveyance, reorganization, moratorium
                  and other similar laws relating to or affecting creditors'
                  rights generally, general equitable principles (whether
                  considered in a proceeding in equity or at law) and an implied
                  covenant of good faith and fair dealing;

                           (iii) The execution, delivery and performance of the
                  Warrant Agreement and the Pledge Agreement by the Warrant
                  Agent does not conflict with or constitute a breach of the
                  charter or by-laws of the Warrant Agent; and

                           (iv) No consent, approval or authorization of, or
                  registration with or notice to, any state or federal
                  governmental authority or agency is required for the
                  execution, delivery or performance by the Warrant Agent of the
                  Warrant Agreement and the Pledge Agreement.

                  (g) A written opinion of Gould & Wilkie LLP, counsel to The
         Bank of New York, as Collateral Agent, Securities Intermediary and
         Custodial Agent, shall have been furnished to the Underwriters by such
         counsel and addressed to the Underwriters and dated such Closing Date,
         in form and substance satisfactory to the Underwriters, to the effect
         that:

                           (i) The Collateral Agent and Securities Intermediary
                  are duly incorporated as New York banking corporations with
                  all necessary corporate power and authority to execute,
                  deliver and perform their obligations under the Pledge
                  Agreement;

                           (ii) The execution, delivery and performance by the
                  Collateral Agent and Securities Intermediary of the Pledge
                  Agreement have been duly authorized by all necessary corporate
                  action on the part of the Collateral Agent and Securities
                  Intermediary. The Pledge Agreement has been duly executed and
                  delivered by the Collateral Agent and the Securities
                  Intermediary, and constitutes the valid and binding agreement
                  of the Collateral Agent and Securities Intermediary,
                  enforceable against the Collateral Agent and Securities
                  Intermediary in accordance with its terms, subject to the
                  effects of bankruptcy, insolvency, fraudulent conveyance,
                  reorganization, moratorium and other similar laws relating to
                  or affecting creditors' rights generally, general equitable
                  principles (whether


                                       21
<PAGE>

                  considered in a proceeding in equity or at law) and an implied
                  covenant of good faith and fair dealing;

                           (iii) The execution, delivery and performance of the
                  Pledge Agreement by the Collateral Agent and Securities
                  Intermediary does not conflict with or constitute a breach of
                  the charter or by-laws of the Collateral Agent and the
                  Securities Intermediary; and

                           (iv) No consent, approval or authorization of, or
                  registration with or notice to, any New York state or federal
                  governmental authority or agency is required for the execution
                  or delivery or as a condition precedent to the performance by
                  the Collateral Agent and the Securities Intermediary of the
                  Pledge Agreement.

                  (h) The Underwriters shall have received on the date of this
         Agreement (other than from Arthur Andersen LLP with respect to GTE
         Minnesota Inc.), dated the date of this Agreement, and on the Closing
         Date, dated the Closing Date, letters, in form and substance
         satisfactory to the Underwriters, from the Company's independent public
         accountants listed in Section 1(p) of this Agreement and each of the
         other accountants listed in Section 1(p) of this Agreement (except for
         PricewaterhouseCoopers LLP), containing statements and information of
         the type ordinarily included in accountants' "comfort letters" to
         underwriters with respect to the financial statements and certain
         financial information contained in or incorporated by reference into
         the Prospectus.

                  (i) The "lock-up" agreements, each substantially in the form
         of Exhibit A hereto, between the Representatives and each of the
         directors and certain executive officers of the Company relating to
         sales and certain other dispositions of shares of Common Stock or
         certain other securities, delivered to the Representatives on or before
         the date hereof, shall be in full force and effect on the Closing Date.

                  (j) The Equity Units shall have been approved for listing,
         subject only to official notice of issuance, on the New York Stock
         Exchange.

         The several obligations of the Underwriters to purchase Option
Securities hereunder are subject to the delivery to the Representatives on the
Option Closing Date of such documents as the Representatives may reasonably
request, including those set forth above, with respect to the good standing of
the Company, the due authorization and issuance of the Option Securities and
other matters related to the issuance of the Option Securities.

         6. COVENANTS OF THE COMPANY. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:

                  (a) To advise the Underwriters promptly and, if requested,
         confirm such advice in writing, of the happening of any event which
         makes any statement of a material fact made in the Registration
         Statement or the Prospectus untrue or which requires the making of any
         additions to or changes in the Registration Statement or the Prospectus
         (as amended or supplemented from time to time) in order to make the
         statements therein, in the light of the circumstances under which they
         were made, not misleading; to advise the


                                       22
<PAGE>

         Underwriters promptly of any order preventing or suspending the use of
         the Prospectus, of any suspension of the qualification of the Equity
         Units for offering or sale in any jurisdiction and of the initiation or
         threatening of any proceeding for any such purpose; and to use its best
         efforts to prevent the issuance of any such order preventing or
         suspending the use of the Registration Statement or the Prospectus or
         suspending any such qualification and, if any such suspension is
         issued, to obtain the lifting thereof at the earliest possible time;

                  (b) To furnish the Representatives, without charge, one
         conformed copy of the Registration Statement (including exhibits
         thereto) and for delivery to each other Underwriter a conformed copy of
         the Registration Statement (without exhibits thereto) and to furnish
         the Representatives in New York City, without charge, prior to 10:00
         a.m. New York City time on the business day next succeeding the date of
         this Agreement and during the period mentioned in Section 6(c) below,
         as many copies of the Prospectus, any documents incorporated by
         reference therein and any supplements and amendments thereto or to the
         Registration Statement as the Representatives may reasonably request.

                  (c) Before amending or supplementing the Registration
         Statement or the Prospectus with respect to the Equity Units, to
         furnish to the Representatives a copy of each such proposed amendment
         or supplement and not to file any such proposed amendment or supplement
         to which the Representatives reasonably object.

                  (d) If, during such period after the first date of the public
         offering of the Equity Units as in the opinion of counsel for the
         Underwriters the Prospectus is required by law to be delivered in
         connection with sales by an Underwriter or dealer, any event shall
         occur or condition exist as a result of which it is necessary to amend
         or supplement the Prospectus in order to make the statements therein,
         in the light of the circumstances when the Prospectus is delivered to a
         purchaser, not misleading, or if, in the opinion of counsel for the
         Underwriters, it is necessary to amend or supplement the Prospectus to
         comply with applicable law, forthwith to prepare, file with the
         Commission and furnish, at its own expense, to the Underwriters and to
         the dealers (whose names and addresses the Representatives will furnish
         to the Company) to which Offered Securities may have been sold by the
         Representatives on behalf of the Underwriters and to any other dealers
         upon request, either amendments or supplements to the Prospectus so
         that the statements in the Prospectus as so amended or supplemented
         will not, in the light of the circumstances when the Prospectus is
         delivered to a purchaser, be misleading or so that the Prospectus, as
         amended or supplemented, will comply with law.

                  (e) To endeavor to qualify the Equity Units for offer and sale
         under the securities or Blue Sky laws of such jurisdictions as the
         Representatives shall reasonably request.

                  (f) To make generally available to the Company's security
         holders and to the Representatives as soon as practicable an earning
         statement covering a twelve-month period beginning on the first day of
         the first full fiscal quarter after the date of this Agreement, which
         earning statement shall satisfy the provisions of Section 11(a) of the
         Securities Act and the rules and regulations of the Commission
         thereunder. If such fiscal quarter is the last fiscal quarter of the
         Company's fiscal year, such earning statement shall


                                       23
<PAGE>

         be made available not later than 90 days after the close of the period
         covered thereby and in all other cases shall be made available not
         later than 45 days after the close of the period covered thereby.

                  (g) To assist the Underwriters in arranging for the Equity
         Units to be eligible for clearance and settlement through The
         Depository Trust Company ("DTC").

                  (h) To apply the net proceeds from the sale of the Equity
         Units as set forth in the Prospectus under the heading "Use of
         Proceeds".

                  (i) Whether or not the transactions contemplated in this
         Agreement are consummated or this Agreement is terminated, to pay or
         cause to be paid all expenses incident to the performance of its
         obligations under this Agreement, including: (i) the fees,
         disbursements and expenses of the Company's counsel and the Company's
         accountants in connection with the registration and delivery of the
         Equity Units under the Securities Act and all other fees or expenses in
         connection with the preparation and filing of the Registration
         Statement, any preliminary prospectus, the Prospectus and amendments
         and supplements to any of the foregoing, including all printing costs
         associated therewith, and the mailing and delivering of copies thereof
         to the Underwriters and dealers, in the quantities hereinabove
         specified, (ii) all costs and expenses related to the transfer and
         delivery of the Equity Units to the Underwriters, including any
         transfer or other taxes payable thereon, (iii) the cost of printing or
         producing any Blue Sky or legal investment memorandum in connection
         with the offer and sale of the Equity Units under state law and all
         expenses in connection with the qualification of the Equity Units for
         offer and sale under state law as provided in Section 6(d) hereof,
         including filing fees and the reasonable fees and disbursements of
         counsel for the Underwriters in connection with such qualification and
         in connection with the Blue Sky or legal investment memorandum, (iv)
         the fees and disbursements of the Company's counsel and accountants and
         of the Trustee and its counsel, (v) all filing fees and the reasonable
         fees and disbursements of counsel to the Underwriters incurred in
         connection with the review and qualification of the offering of the
         Equity Units by the National Association of Securities Dealers, Inc.,
         (vi) any fees charged by the rating agencies for any rating of the
         Equity Units, (vii) the costs and expenses of the Company relating to
         investor presentations on any "road show" undertaken in connection with
         the marketing of the offering of the Equity Units, including, without
         limitation, expenses associated with the production of road show slides
         and graphics, fees and expenses of any consultants engaged in
         connection with the road show presentations with the prior approval of
         the Company, travel and lodging expenses of the representatives and
         officers of the Company and any such consultants, and the cost of any
         aircraft chartered in connection with the road show, and (viii) all
         other costs and expenses incident to the performance of the obligations
         of the Company hereunder for which provision is not otherwise made in
         this Section. It is understood, however, that except as provided in
         this Section, Section 7 entitled "Indemnity and Contribution" and the
         last paragraph of Section 9 below, the Underwriters will pay all of
         their costs and expenses, including fees and disbursements of their
         counsel, and any advertising expenses connected with any offers they
         may make.


                                       24
<PAGE>

                  (j) To use its best efforts to effect the listing of the
         Equity Units and the shares of Common Stock issuable upon settlement of
         the Warrants on The New York Stock Exchange.

         7. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein.

                  (b) Each Underwriter agrees, severally and not jointly, to
         indemnify and hold harmless the Company, its directors, its officers
         who sign the Registration Statement and each person, if any, who
         controls the Company within the meaning of either Section 15 of the
         Securities Act or Section 20 of the Exchange Act to the same extent as
         the foregoing indemnity from the Company to such Underwriter, but only
         with reference to information relating to such Underwriter furnished to
         the Company in writing by such Underwriter through the Representatives
         expressly for use in the Registration Statement, any preliminary
         prospectus, the Prospectus or any amendments or supplements thereto.

                  (c) In case any proceeding (including any governmental
         investigation) shall be instituted involving any person in respect of
         which indemnity may be sought pursuant to either Section 7(a) or 7(b),
         such person (the "indemnified party") shall promptly notify the person
         against whom such indemnity may be sought (the "indemnifying party") in
         writing and the indemnifying party, upon request of the indemnified
         party, shall retain counsel reasonably satisfactory to the indemnified
         party to represent the indemnified party and any others the
         indemnifying party may designate in such proceeding and shall pay 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, but the fees and expenses of such counsel shall
         be at the expense of such indemnified party unless (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 respect of the legal expenses of any
         indemnified party in connection with any proceeding or related
         proceedings in the same jurisdiction, be liable for the fees and
         expenses of more than one separate firm (in addition to any local
         counsel) for all such indemnified parties and that all such fees and
         expenses shall be reimbursed as they are incurred. Such firm shall be
         designated in writing by the Representatives, in the case of parties
         indemnified pursuant to


                                       25
<PAGE>

         Section 7(a) above, and by the Company, in the case of parties
         indemnified pursuant to Section 7(b) above. 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. Notwithstanding the
         foregoing sentence, if at any time an indemnified party shall have
         requested an indemnifying party to reimburse the indemnified party for
         fees and expenses of counsel as contemplated by the second and third
         sentences of this paragraph, the indemnifying party agrees that it
         shall be liable for any settlement of any proceeding effected without
         its written consent if (i) such settlement is entered into more than 30
         days after receipt by such indemnifying party of the aforesaid request
         and (ii) such indemnifying party shall not have reimbursed the
         indemnified party in accordance with such request prior to the date of
         such settlement. No indemnifying party shall, without the prior written
         consent of the indemnified party, effect any settlement of any pending
         or threatened proceeding in respect of which any indemnified party is
         or could have been a party and indemnity could have been sought
         hereunder by such indemnified party, unless such settlement includes an
         unconditional release of such indemnified party from all liability on
         claims that are the subject matter of such proceeding.

                  (d) To the extent the indemnification provided for in Section
         7(a) or 7(b) is unavailable to an indemnified party or insufficient in
         respect of any losses, claims, damages or liabilities referred to
         therein, then each indemnifying party under such paragraph, in lieu of
         indemnifying such indemnified party thereunder, shall contribute to the
         amount paid or payable by such indemnified party as a result of such
         losses, claims, damages or liabilities (i) 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 hand from the offering
         of the Equity Units or (ii) if the allocation provided by clause
         7(d)(i) above is not permitted by applicable law, in such proportion as
         is appropriate to reflect not only the relative benefits referred to in
         clause 7(d)(i) above but also the relative fault of the Company on the
         one hand and of the Underwriters on the other hand in connection with
         the statements or omissions that resulted in such losses, claims,
         damages or liabilities, 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 hand in connection with the
         offering of the Offered Securities shall be deemed to be in the same
         respective proportions as the net proceeds from the offering of such
         Equity Units (before deducting expenses) received by the Company and
         the total underwriting discounts and commissions received by the
         Underwriters, in each case as set forth in the table on the cover of
         the Prospectus Supplement, bear to the aggregate Public Offering Price
         of the Equity Units. The relative fault of the Company on the one hand
         and the Underwriters on the other hand 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 or by the
         Underwriters and the parties' relative intent, knowledge, access to
         information and opportunity to correct or prevent such statement or
         omission. The Underwriters' respective obligations to contribute
         pursuant to this Section 7 are several in proportion to the respective
         principal amounts of Equity Units they have purchased hereunder, and
         not joint.

                  (e) The Company and the Underwriters agree that it would not
         be just or equitable if contribution pursuant to this Section 7 were
         determined by pro rata allocation (even if the Underwriters were
         treated as one entity for such purpose) or by any other method of


                                       26
<PAGE>

         allocation that does not take account of the equitable considerations
         referred to in Section 7(d). The amount paid or payable by an
         indemnified party as a result of the losses, claims, damages and
         liabilities referred to in the immediately preceding paragraph shall be
         deemed to include, subject to the limitations set forth above, 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 Section 7, no Underwriter shall
         be required to contribute any amount in excess of the amount by which
         the total price at which the Equity Units underwritten by it and
         distributed to the public were offered to the public exceeds the amount
         of any damages that such Underwriter has otherwise been required to pay
         by reason of such untrue or alleged untrue statement or omission or
         alleged omission. No person guilty of fraudulent misrepresentation
         (within the meaning of Section 11(f) of the Securities Act) shall be
         entitled to contribution from any person who was not guilty of such
         fraudulent misrepresentation. The remedies provided for in this Section
         7 are not exclusive and shall not limit any rights or remedies, which
         may otherwise be available to any indemnified party at law or in
         equity.

                  (f) The indemnity and contribution provisions contained in
         this Section 7 and the representations, warranties and other statements
         of the Company contained in this Agreement shall remain operative and
         in full force and effect regardless of (i) any termination of this
         Agreement, (ii) any investigation made by or on behalf of any
         Underwriter or any person controlling any Underwriter or the Company,
         its officers or directors or any person controlling the Company and
         (iii) acceptance of and payment for any of the Equity Units.

         8. TERMINATION. This Agreement shall be subject to termination by
notice given by the Representatives to the Company, if (a) after the execution
and delivery of the Underwriting Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Representatives,
is material and adverse and (b) in the case of any of the events specified in
clauses 8(a)(i) through 8(a)(iv), such event, singly or together with any other
such event, makes it, in the judgment of the Representatives, impracticable to
market the Equity Units on the terms and in the manner contemplated in the
Prospectus.

         9. DEFAULTING UNDERWRITERS. If, on the Closing Date or the Option
Closing Date, any one or more of the Underwriters shall fail or refuse to
purchase Underwriters' Securities that it has or they have agreed to purchase
hereunder on such date, and the aggregate amount of Underwriters' Equity Units
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate amount of the
Underwriters' Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the amount of Underwriters'
Equity Units set forth opposite their respective names in the Underwriting
Agreement bears to the aggregate amount of Underwriters' Equity Units set forth
opposite the names of all such non-defaulting Underwriters, or in such other


                                       27
<PAGE>

proportions as the Representatives may specify, to purchase the Underwriters'
Equity Units which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the amount
of Underwriters' Securities that any Underwriter has agreed to purchase pursuant
to this Agreement be increased pursuant to this Section 10 by an amount in
excess of one-ninth of such amount of Underwriters' Equity Units without the
written consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Underwriters' Equity Units and the
aggregate amount of Underwriters' Securities with respect to which such default
occurs is more than one-tenth of the aggregate amount of Underwriters' Equity
Units to be purchased on such date, and arrangements satisfactory to the
Representatives and the Company for the purchase of such Underwriters'
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either the Representatives or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be effected.
If, on the Option Closing Date, any Underwriter or Underwriters shall fail or
refuse to purchase Option Securities and the aggregate number of Option
Securities with respect to which such default occurs is more than one-tenth of
the aggregate number of Option Securities to be purchased, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase Option Securities or (ii) purchase not less than the number of
Option Securities that such non-defaulting Underwriters would have been
obligated to purchase in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.

         If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.

         10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

         11. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.

         12. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.


                                       28
<PAGE>

                                   SCHEDULE I

                        LIST OF SIGNIFICANT SUBSIDIARIES

            Electric Lightwave, Inc.

            Citizens Telecommunications Company of California, Inc.

            Citizens Telecommunications Company

            Citizens Utilities Rural Company, Inc.

            Citizens Telecommunications Company of New York, Inc.

            Citizens Telecommunications Company of Tennessee L.L.C.

            Citizens Telecommunications Company of West Virginia, Inc.

            Citizens Telecommunications Company of the White Mountains, Inc.

            Citizens Directory Services Company, Inc.

            Citizens Utilities Capital L.P.


                                       29
<PAGE>

                                    EXHIBIT A

                            [FORM OF LOCK-UP LETTER]


                                                                          [Date]


Morgan Stanley & Co. Incorporated
J.P. Morgan Securities Inc.
Banc of America Securities LLC
Salomon Smith Barney Inc
Lehman Brothers Inc.
The Buckingham Research Group Incorporated
Dain Rauscher Incorporated
First Union Securities, Inc.
Legg Mason Wood Walker, Incorporated
Mizuho International plc
Robertson Stephens, Inc.
TD Securities (USA) Inc.
c/o Morgan Stanley & Co. Incorporated
     1585 Broadway
     New York, NY  10036

Dear Sirs and Mesdames:

         The undersigned understands that Morgan Stanley & Co. Incorporated
("MORGAN STANLEY") and J.P. Morgan Securities Inc. ("JPMORGAN") proposes to
enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with
Citizens Communications Company, a Delaware corporation (the "COMPANY"),
providing for the public offering (the "PUBLIC OFFERING") by the several
Underwriters, including Morgan Stanley and JPMorgan (the "UNDERWRITERS"), of
Equity Units that will include a stock purchase contract under which the holder
of the Equity Unit will purchase from the Company shares of the Common Stock,
par value $.25 per share of the Company (the "COMMON STOCK").

         To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley and JPMorgan on behalf of the Underwriters, it will not, during the
period commencing on the date hereof and ending 90 days after the date of the
final prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (a) the sale of any Equity Units to the Underwriters pursuant to the
Underwriting Agreement or (b) transactions relating to shares of Common Stock or
other
<PAGE>

securities acquired in open market transactions after the completion of
the Public Offering. In addition, the undersigned agrees that, without the prior
written consent of Morgan Stanley and JPMorgan on behalf of the Underwriters, it
will not, during the period commencing on the date hereof and ending 90 days
after the date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.

         Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.

                                                     Very truly yours


                                                     ---------------------------
                                                     (Name)


                                                     ---------------------------
                                                     (Address)


                                        2
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.2
<SEQUENCE>3
<FILENAME>a2052437zex-1_2.txt
<DESCRIPTION>EXHIBIT 1.2
<TEXT>

<PAGE>

                                                                     Exhibit 1.2

                                                                  EXECUTION COPY

                             UNDERWRITING AGREEMENT


                                                     June 13, 2001


Citizens Communications Company
3 High Ridge Park
Stamford, Connecticut 06905

Dear Sirs and Mesdames:

         We (the "REPRESENTATIVES" or the "UNDERWRITERS") understand that
Citizens Communications Company, a Delaware corporation (the "COMPANY"),
proposes to issue and sell 21,875,000 shares of its Common Stock, par value $.25
per share (the "SHARES") at a purchase price of $12.10 per share, such Shares to
be offered to the public at a price of $12.10 per Share, with an underwriting
commission in the amount of $0.5747 per share.

         Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters
listed in Schedule II hereto, and the Underwriters agree, severally and not
jointly, to purchase from the Company the numbers of Shares set forth opposite
their names in Schedule I hereto on the terms set forth in the Prospectus dated
May 9, 2001 and the Prospectus Supplement dated June 13, 2001.

         The Underwriters will pay for the Shares upon delivery thereof at the
offices of Simpson Thacher & Bartlett at 10:00 a.m. (New York City time) on June
19, 2001, or at such other time, not later than 5:00 p.m. (New York City time)
on June 26, 2001, as shall be designated by the Representatives. The time and
date of such payment and delivery are hereinafter referred to as the Closing
Date.

         All provisions contained in the document entitled Citizens
Communications Company -- Underwriting Agreement Standard Provisions (Common
Stock) dated June 13, 2001, a copy of which is attached hereto, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Agreement to the same extent as if such provisions had been set forth in
full herein, except that if any term defined in such document is otherwise
defined herein, the definition set forth herein shall control.
<PAGE>

         Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.

                                Very truly yours,

                                J.P. MORGAN SECURITIES INC.

                                Acting severally on behalf of themselves and
                                    the several Underwriters named herein

                                By:      J.P. MORGAN SECURITIES INC.


                                By:      /s/  JAMES L. STONE
                                     -------------------------------------------
                                       Name: James L. Stone
                                       Title: Managing Director


                                MORGAN STANLEY & CO. INCORPORATED

                                Acting severally on behalf of themselves and the
                                    several Underwriters named herein

                                By:      MORGAN STANLEY & CO.


                                By:      /s/  JERRY ELLIOTT
                                     -------------------------------------------
                                        Name: Jerry Elliott
                                        Title: Managing Director


Accepted:

CITIZENS COMMUNICATIONS COMPANY


By:  /s/  DONALD B. ARMOUR
    -------------------------------------------------
    Name:  Donald B. Armour
    Title: Vice President, Finance and Treasurer


                                       2
<PAGE>

                                   SCHEDULE I

<TABLE>
<CAPTION>
                                                                Number of
                       Underwriter                        Shares To Be Purchased
<S>                                                            <C>
J.P. Morgan Securities Inc..............................        4,630,938
Morgan Stanley & Co. Incorporated.......................        4,630,938
Banc of America Securities LLC..........................        4,630,937
Salomon Smith Barney Inc................................        4,630,937
Lehman Brothers Inc.....................................        1,155,000
The Buckingham Research Group                                     231,875
                       Incorporated
Dain Rauscher Incorporated                                        288,750
Legg Mason Wood Walker, Incorporated....................          231,875
Mizuho International plc................................          288,750
Robertson Stephens, Inc.................................          577,500
TD Securities (USA) Inc.................................          577,500
                                                               ----------

              Total.....................................       21,875,000
                                                               ==========
</TABLE>
<PAGE>

                         CITIZENS COMMUNICATIONS COMPANY

                             UNDERWRITING AGREEMENT

                               STANDARD PROVISIONS
                                 (COMMON STOCK)

                                                              June 13, 2001

         From time to time, Citizens Communications Company, a Delaware
corporation (the "COMPANY"), may enter into one or more underwriting agreements
that provide for the sale of designated securities to the several underwriters
named therein. The standard provisions set forth herein may be incorporated by
reference in any such underwriting agreement (an "UNDERWRITING AGREEMENT"). The
Underwriting Agreement, including the provisions incorporated therein by
reference, is herein sometimes referred to as this Agreement. Terms defined in
the Underwriting Agreement are used herein as therein defined.

         The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement (File No. 333-58044), including a
prospectus, relating to Common Stock and has filed with, or transmitted for
filing to, or shall promptly hereafter file with or transmit for filing to, the
Commission a prospectus supplement (the "PROSPECTUS SUPPLEMENT") specifically
relating to the Shares pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "SECURITIES ACT"). The term "REGISTRATION STATEMENT" means the
registration statement, including the exhibits thereto, as amended to the date
of this Agreement. The term "BASIC PROSPECTUS" means the prospectus included in
the Registration Statement. The term "PROSPECTUS" means the Basic Prospectus
together with the Prospectus Supplement. The term "PRELIMINARY PROSPECTUS" means
a preliminary prospectus supplement specifically relating to the Shares,
together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus", "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"SUPPLEMENT", "AMENDMENT" and "AMEND" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").

         1. REPRESENTATIONS AND WARRANTIESThe Company represents and warrants to
and agrees with each of the Underwriters that:

                  (a) The Registration Statement has become effective; no stop
         order suspending the effectiveness of the Registration Statement is in
         effect, and no proceedings for such purpose are pending before or
         threatened by the Commission.

                  (b) (i) Each document, if any, filed or to be filed pursuant
         to the Exchange Act and incorporated by reference in the Prospectus
         complied when filed or will comply when so filed in all material
         respects with the Exchange Act and the applicable rules and regulations
         of the Commission thereunder and none of such documents (other than the

<PAGE>

         Financial Statements contained in the Current Reports on Form 8-K filed
         on May 7, 2001, February 13, 2001 and November 14, 2000 (exclusive of
         the pro forma financial information contained therein) (the "Excluded
         Information") as to which the Company makes no representation)
         contained an untrue statement of a material fact or omitted to state a
         material fact necessary to make the statements in such documents, in
         light of the circumstances under which they were made, not misleading,
         (ii) the Registration Statement, when it became effective, did not
         contain, and the Registration Statement, as amended or supplemented, if
         applicable, will not contain any untrue statement of a material fact or
         omit to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading, (iii) the
         Registration Statement (as of its effective date) and the Prospectus
         (as of the date of the then most recent supplement thereto) complied,
         and, as amended or supplemented, if applicable, will comply in all
         material respects with the Securities Act and the applicable rules and
         regulations of the Commission thereunder and did not and, as amended or
         supplemented, if applicable, will not contain at the time of such
         amendment, any untrue statement of a material fact or omit to state a
         material fact required to be stated therein or necessary in order to
         make the statements therein, in light of the circumstances under which
         they were made, not misleading, and (iv) the Prospectus does not
         contain and, as amended or supplemented, if applicable, will not
         contain any untrue statement of a material fact or omit to state a
         material fact necessary to make the statements therein, in the light of
         the circumstances under which they were made, not misleading, except
         that the representations and warranties set forth in this paragraph do
         not apply (A) to statements or omissions in the Registration Statement
         or the Prospectus based upon information relating to any Underwriter
         furnished to the Company in writing by such Underwriter through the
         Representatives expressly for use therein or (B) to that part of the
         Registration Statement that constitutes the Statement of Eligibility
         (Form T-1) under the Trust Indenture Act of 1939, as amended (the
         "TRUST INDENTURE ACT"), of the trustee named therein.

                  (c) The Company has been duly incorporated, is validly
         existing as a corporation in good standing under the laws of the
         jurisdiction of its incorporation, has the corporate power and
         authority to own its property and to conduct its business as described
         in the Prospectus and is duly qualified to transact business and is in
         good standing in each jurisdiction in which the conduct of its business
         or its ownership or leasing of property requires such qualification,
         except to the extent that the failure to be so qualified or be in good
         standing would not have a material adverse effect on the Company and
         its subsidiaries, taken as a whole.

                  (d) Each subsidiary of the Company set forth on Schedule I
         attached hereto (each, a "SIGNIFICANT SUBSIDIARY") has been duly
         incorporated, is validly existing as a corporation in good standing
         under the laws of the jurisdiction of its incorporation, has the
         corporate power and authority to own its property and to conduct its
         business as described in the Prospectus and is duly qualified to
         transact business and is in good standing in each jurisdiction in which
         the conduct of its business or its ownership or leasing of property
         requires such qualification, except to the extent that the failure to
         be so qualified or be in good standing would not have a material
         adverse effect on the Company and its subsidiaries, taken as a whole;
         all of the issued shares of capital stock of each Significant
         Subsidiary, other than Electric Lightwave, Inc. ("ELI"), of the Company


                                       2
<PAGE>

         have been duly and validly authorized and issued, are fully paid and
         non-assessable and are owned directly, free and clear of all liens,
         encumbrances, equities or claims; all of the shares of capital stock of
         ELI that are issued to the Company have been duly and validly
         authorized and issued, are fully paid and non-assessable and are owned
         directly, free and clear of all liens, encumbrances, equities or
         claims.

                  (e) This Agreement has been duly authorized, executed and
         delivered by the Company and constitutes a valid and legally binding
         agreement of the Company, enforceable in accordance with its terms,
         subject to applicable bankruptcy, insolvency, fraudulent conveyance,
         reorganization, moratorium or similar laws affecting creditors' rights
         generally, general principles of equity and an implied covenant of good
         faith and fair dealing.

                  (f) The execution and delivery by the Company of, and the
         performance by the Company of its obligations under, this Agreement and
         issuance of the Shares, as applicable, will not (i) conflict with or
         result in a breach or violation of any of the terms or provisions of,
         or constitute a default under, or result in the creation or imposition
         of any lien, charge or encumbrance upon any property or assets of the
         Company or any of its subsidiaries pursuant to any indenture, mortgage,
         deed of trust, loan agreement or other material agreement or instrument
         to which the Company or any of its subsidiaries is a party or by which
         the Company or any of its subsidiaries is bound or to which any of the
         property or assets of the Company or any of its subsidiaries is
         subject, except where such violation, default, lien, charge, or
         encumbrance would not have a material adverse effect on the
         consolidated financial position, results of operations or business of
         the Company and its subsidiaries, taken as a whole (a "MATERIAL ADVERSE
         EFFECT"); (ii) contravene any provision of applicable law or the
         certificate of incorporation or by-laws of the Company or any agreement
         or other instrument binding upon the Company or any of its subsidiaries
         that is material to the Company and its subsidiaries, taken as a whole,
         or (iii) result in the violation of any judgment, order or decree of
         any governmental body, agency or court having jurisdiction over the
         Company or any of its subsidiaries, and no consent, approval,
         authorization or order of, or qualification with, any governmental body
         or agency is required for the performance by the Company of its
         obligations under this Agreement or the issuance of the Shares, except
         such as may be required by the securities or Blue Sky laws of the
         various states in connection with the offer and sale of the Shares and
         except where any such violation or failure to obtain a consent or other
         approval would not cause a Material Adverse Effect or prevent the
         consummation of the transaction contemplated hereby.

                  (g) Since the date as of which information is given in the
         Registration Statement and the Prospectus (exclusive of amendments or
         supplements after the date hereof) and as of the date of the
         Underwriting Agreement, except as otherwise stated therein, (i) there
         has been no material adverse change in the condition, financial or
         otherwise, or in the earnings, business affairs, management or
         operations of the Company and its subsidiaries, taken as a whole,
         whether or not arising in the ordinary course of business, (ii) none of
         the Company or any of its subsidiaries has incurred any material
         liability or obligation, direct or contingent, other than in the
         ordinary course of business, (iii) none of the Company or any of its
         subsidiaries has entered into any material


                                       3
<PAGE>

         transaction other than in the ordinary course of business and (iv)
         there has not been any change in the capital stock or long-term debt of
         the Company or any of its subsidiaries, or any dividend or distribution
         of any kind declared, paid or made by the Company or any of its
         subsidiaries on any class of its capital stock, or any redemption in
         respect thereof, except that capital stock may have changed due to the
         exercise of stock options in the ordinary course of business.

                  (h) There are (i) no legal or governmental proceedings pending
         or, to the knowledge of the Company, threatened to which the Company or
         any of its subsidiaries is a party or to which any of the properties of
         the Company or any of its subsidiaries is subject that are required to
         be described in the Registration Statement or the Prospectus and are
         not so described and which, if determined adversely to the Company or
         any of its subsidiaries, would have a Material Adverse Effect or (ii)
         any statutes, regulations, contracts or other documents that are
         required to be described in the Registration Statement or the
         Prospectus or to be filed or incorporated by reference as exhibits to
         the Registration Statement that are not described, filed or
         incorporated as required.

                  (i) Each preliminary prospectus filed as part of the
         registration statement as originally filed or as part of any amendment
         thereto, or filed pursuant to Rule 424 under the Securities Act,
         complied when so filed in all material respects with the Securities Act
         and the applicable rules and regulations of the Commission thereunder
         and did not and, as supplemented will not contain at the time of such
         supplement, any untrue statement of a material fact or omit to state a
         material fact or omit to state a material fact required to be stated
         therein or necessary in order to make the statements therein, in light
         of the circumstances under which they were made, not misleading.

                  (j) The Company is not and, after giving effect to the
         offering and sale of the Shares and the application of the proceeds
         thereof as described in the Prospectus, will not be an "investment
         company" or a company controlled by an investment company as such term
         is defined in the Investment Company Act of 1940, as amended, and the
         rules and regulations of the Commission thereunder.

                  (k) The Company is not a "holding company" within the meaning
         of the Public Utility Holding Company Act of 1935, as amended (the
         "PUBLIC UTILITY HOLDING COMPANY ACT"), and the rules and regulations of
         the Commission thereunder.

                  (l) The Company and its subsidiaries (i) are, to the Company's
         best knowledge, in compliance with any and all applicable foreign,
         federal, state and local laws and regulations relating to the
         protection of human health and safety, the environment or hazardous or
         toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
         LAWS"), (ii) have received all permits, licenses or other approvals
         required of them under applicable Environmental Laws to conduct their
         respective businesses and (iii) are, to the Company's best knowledge,
         in compliance with all terms and conditions of any such permit, license
         or approval, except where such noncompliance with Environmental Laws,
         failure to receive required permits, licenses or other approvals or
         failure to comply with the terms and conditions of such permits,
         licenses or approvals would not have a Material Adverse Effect.


                                       4
<PAGE>

                  (m) There are no costs or liabilities associated with
         Environmental Laws (including, without limitation, any capital or
         operating expenditures required for clean-up, closure of properties or
         compliance with Environmental Laws or any permit, license or approval,
         any related constraints on operating activities and any potential
         liabilities to third parties), which would have a Material Adverse
         Effect.

                  (n) KPMG LLP are independent certified public accountants with
         respect to the Company and its subsidiaries and, to the best of the
         Company's knowledge, Arthur Andersen LLP are independent certified
         public accountants with respect to GTE Minnesota Inc., Frontier
         Incumbent Local Exchange Carrier Businesses and Qwest Communications
         International Inc. and PricewaterhouseCoopers LLP are independent
         certified public accountants with respect to Frontier Incumbent Local
         Exchange Carrier Businesses each (i) as required by the Securities Act
         and the rules and regulations of the Commission thereunder and (ii)
         within the meaning of Rule 101 of the Code of Professional Conduct of
         the American Institute of Certified Public Accountants and its
         interpretations and rulings thereunder. The historical and pro forma
         financial statements (including the related notes) contained or
         incorporated by reference in the Prospectus comply as to form in all
         material respects with the applicable requirements under the Securities
         Act and the Exchange Act (except that certain supporting schedules are
         omitted); such financial statements (other than the Excluded
         Information as to which the Company makes no representation) have been
         prepared in accordance with generally accepted accounting principles
         consistently applied throughout the periods covered thereby and fairly
         present in all material respects the financial position of the entities
         purported to be covered thereby at the respective dates indicated and
         the results of their operations and their cash flows for the respective
         periods indicated; and the financial information contained or
         incorporated by reference in the Prospectus (other than the Excluded
         Information as to which the Company makes no representation) is derived
         from the accounting records of the Company and its subsidiaries and
         fairly present in all material respects the information purported to be
         shown thereby. The other historical and pro forma financial and
         statistical information and data included in the Prospectus (other than
         the Excluded Information as to which the Company makes no
         representation) are, in all material respects, fairly presented.

                  (o) The Company and each of its subsidiaries possess all
         material licenses, certificates, authorizations and permits issued by,
         and have made all declarations and filings with, the appropriate
         federal, state or foreign regulatory agencies or bodies which are
         necessary or desirable for the ownership of their respective properties
         or the conduct of their respective businesses as described in the
         Prospectus, except where the failure to possess or make the same would
         not, singularly or in the aggregate, have a Material Adverse Effect,
         and neither the Company nor any of its subsidiaries has received
         notification of any revocation or modification of any such license,
         certificate, authorization or permit or has any reason to believe that
         any such license, certificate, authorization or permit will not be
         renewed in the ordinary course in each case where such revocation,
         modification or failure of renewal would have a Material Adverse
         Effect.


                                       5
<PAGE>

                  (p) The authorized capital stock of the Company conforms as to
         legal matters to the description thereof contained in the Prospectus.

                  (q) The shares of Common Stock outstanding prior to the
         issuance of the Shares have been duly authorized and are validly
         issued, fully paid and non-assessable; no holder will be subject to
         personal liability by reason of being such a holder.

                  (r) The Shares have been duly and validly authorized and
         reserved for issuance; such Shares, when issued and delivered in
         accordance with the provisions of this Agreement, will be validly
         issued, fully paid and non-assessable; and the issuance of such shares
         of Common Stock will not be subject to any preemptive or similar
         rights.

                  (s) The shares of Common Stock outstanding prior to the
         issuance of the Securities are, and upon issuance the Shares by the
         Company, subject to official notice of issuance, will be, listed on the
         New York Stock Exchange.

         2. AGREEMENTS TO SELL AND PURCHASEThe Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Shares (the "UNDERWRITTEN SECURITIES") set
forth in the Underwriting Agreement opposite its name at the purchase price set
forth in the Underwriting Agreement.

         On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters up to 3,281,250 additional shares of Common Stock (the
"OPTION SHARES"), and the Underwriters shall have a one-time right to purchase,
severally and not jointly, any or all of the Option Shares at the Purchase
Price. If the Representatives, on behalf of the Underwriters, elect to exercise
such option, the Representatives shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the number of Option Shares to be purchased by the Underwriters and the date on
which such Option Shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Option Shares may be
purchased as provided in Section 3 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Underwritten
Securities. If any Option Shares are to be purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of Option Shares (subject to
such adjustments to eliminate fractional units as the Representatives may
determine) that bears the same proportion to the total number of Optional Shares
to be purchased as the number of Underwritten Shares set forth in the
Underwriting Agreement hereto opposite the name of such Underwriter bears to the
total number of Underwritten Shares.

         The Company hereby agrees that, without the prior written consent of
the Representatives on behalf of the Underwriters, the Company will not, during
the period ending 90 days after the date of the final prospectus supplement
included in the Prospectus, (i) register, offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or


                                       6
<PAGE>

exchangeable for shares of Common Stock, or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of shares of Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Shares of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the issuance by the Company of shares
of Common Stock pursuant to, or the grant of options under the Company's
existing stock option, employee benefit or dividend reinvestment plans (as
described in the Prospectus), (B) the issuance by the Company of shares of
Common Stock in certain private sales (as described in the Prospectus) or (C)
the concurrent issuance by the Company of equity units and the underlying
securities (as described in the Prospectus).

         3. TERMS OF PUBLIC OFFERINGThe Issuer is advised by the Representatives
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after this Agreement has become effective as in
the Representatives' judgment is advisable. The Company is further advised by
the Representatives that the Shares are to be offered to the public initially at
the public offering price set forth in the Underwriting Agreement (the "PUBLIC
OFFERING PRICE") and to certain dealers selected by the Representatives at the
Public Offering Price.

         As compensation to the Underwriters for their commitments hereunder,
the Company hereby agrees to pay at the Closing Date to the Representatives for
the accounts of the several Underwriters a commission in the amount per Share
set forth in the Underwriting Agreement (the "UNDERWRITING COMMISSION").

         4. PAYMENT AND DELIVERYPayment for the Underwritten Securities shall be
made to the Company in Federal or other funds immediately available in New York
City against delivery to the Representatives of the certificates for such
Underwritten Securities for the respective accounts of the several Underwriters,
or delivery to a securities intermediary designated by the Representatives of
such certificates and crediting to the Representatives' securities account at
such securities intermediary for the account of the several Underwriters of
security entitlements in respect of the Underwritten Securities, and payment to
the Representatives of the Underwriting Commission with respect to the
Underwritten Securities by wire transfer in immediately available funds to an
account specified by the Representatives to the Company shall be made at the
time and date set forth in the Underwriting Agreement. The time and date of such
payment are hereinafter referred to as the "CLOSING DATE".

         Payment for the Option Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery to the
Representatives of the certificates for such Option Shares for the respective
accounts of the several Underwriters, or delivery to a securities intermediary
designated by the Representatives of such certificates and crediting to the
Representatives' securities account at such securities intermediary for the
accounts of the several Underwriters of security entitlements in respect of such
Option Shares, and payment to the Representatives of the Underwriting Commission
with respect to such Option Shares in the manner set forth above shall be made
at 10:00 a.m., New York City time, on the date specified in the notice described
in Section 2 or at such other time on the same or on such other date, in any
event not later than 10 business days after the expiration of the Underwriters'


                                       7
<PAGE>

option to purchase Option Shares as shall be designated in writing by the
Representatives. The time and date of such payment are hereinafter referred to
as the "OPTION CLOSING DATE".

         The certificates, if any, for the Shares purchased by the Underwriters
shall be registered in such names and in such denominations as the
Representatives shall request in writing not later than one full business day
prior to the Closing Date or the Option Closing Date, as the case may be. The
certificates, if any, evidencing the Underwritten Securities or Option Shares
shall be delivered to the Representatives on the Closing Date or the Option
Closing Date, as the case may be, for the respective accounts of the several
Underwriters, with any transfer taxes payable in connection with the transfer of
the Underwritten Securities or Option Shares to the Underwriters duly paid,
against payment of the Purchase Price and the Underwriting Commission with
respect to such Shares.

         5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONSThe several obligations
of the Underwriters are subject to the following conditions:

                  (a) Subsequent to the execution and delivery of the
         Underwriting Agreement and prior to the Closing Date:

                           (i) there shall not have occurred any downgrading,
                  nor shall any notice have been given of any intended or
                  potential downgrading or of any review for a possible change
                  that does not indicate the direction of the possible change,
                  in the rating accorded any of the Company's securities by any
                  "nationally recognized statistical rating organization," as
                  such term is defined for purposes of Rule 436(g)(2) under the
                  Securities Act;

                           (ii) there shall not have occurred any change in the
                  condition, financial or otherwise, or in the earnings,
                  business affairs, management or operations of the Company and
                  its subsidiaries, taken as a whole, from that set forth in the
                  Prospectus (exclusive of any amendments or supplements thereto
                  subsequent to the date of this Agreement) that, in the
                  judgment of the Representatives, is material and adverse and
                  that makes it, in the judgment of the Representatives,
                  impracticable to market the Shares on the terms and in the
                  manner contemplated in the Prospectus; and

                           (iii) no stop order suspending the effectiveness of
                  the Registration Statement shall have been issued and no
                  proceedings for that purpose shall have been instituted or, to
                  the knowledge of the Company, shall be threatened by the
                  Commission.

                  (b) The Underwriters shall have received on the Closing Date a
         certificate, dated the Closing Date and signed by an executive officer
         of the Company, to the effect set forth in Section 5(a)(i) above and to
         the effect that as of the Closing Date, the representations and
         warranties of the Company contained in this Agreement are true and
         correct as of the Closing Date in all material respects and that the
         Company has complied with all of the agreements and satisfied in all
         material respects all of the conditions on its part to be performed or
         satisfied hereunder on or before the Closing Date.


                                       8
<PAGE>

                  The officer signing and delivering such certificate may rely
         upon the best of his or her knowledge as to proceedings threatened.

                  (c) The Underwriters shall have received on the Closing Date
         an opinion of Winston & Strawn, outside counsel for the Company, dated
         the Closing Date, substantially to the effect that:

                           (i) the Company has been duly incorporated, is
                  validly existing as a corporation in good standing under the
                  laws of the jurisdiction of its incorporation, has the
                  corporate power and authority to own its property and to
                  conduct its business as described in the Prospectus and is
                  duly qualified to transact business and is in good standing in
                  each jurisdiction in which the conduct of its business or its
                  ownership or leasing of property requires such qualification,
                  except to the extent that the failure to be so qualified or be
                  in good standing would not, singularly or in the aggregate,
                  have a material adverse effect on the Company and its
                  subsidiaries, taken as a whole;

                           (ii) the Company has an authorized capitalization as
                  set forth in the Prospectus;

                           (iii) each Significant Subsidiary of the Company has
                  been duly incorporated, is validly existing as a corporation
                  in good standing under the laws of the jurisdiction of its
                  incorporation, has the corporate power and authority to own
                  its property and to conduct its business as described in the
                  Prospectus and is duly qualified to transact business and is
                  in good standing in its jurisdiction of incorporation except
                  to the extent that the failure to be so qualified or be in
                  good standing would not have a material adverse effect on the
                  Company and its subsidiaries, taken as a whole;

                           (iv) the Company has full right, power and authority
                  to execute and deliver this Agreement and to perform its
                  obligations thereunder, and all corporate action required to
                  be taken for the due and proper authorization, execution and
                  delivery of this Agreement and the consummation of the
                  transactions contemplated thereby by the Company have been
                  duly and validly taken;

                           (v) this Agreement has been duly authorized, executed
                  and delivered by the Company;

                           (vi) the execution and delivery by the Company of,
                  and the performance by the Company of its obligations under,
                  this Agreement will not contravene any provision of Applicable
                  Law or the certificate of incorporation or by-laws of the
                  Company or, to the best of such counsel's knowledge, any
                  agreement or other instrument binding upon the Company or any
                  of its subsidiaries that is set forth as an Exhibit to the
                  Company's then current Annual Report on Form 10-K and any
                  subsequently filed Current Reports on Form 8-K or Quarterly
                  Reports on Form 10-Q or, to the best of such counsel's
                  knowledge, any judgment, order or decree of any Governmental
                  Authority having jurisdiction


                                       9
<PAGE>

                  over the Company or any subsidiary, and no consent, approval,
                  authorization or order of, or qualification with, any
                  Governmental Authority is required for the performance by the
                  Company of its obligations under this Agreement, except such
                  as may be required by the securities or Blue Sky laws of the
                  various states in connection with the offer and sale of the
                  Shares and except where any such contravention (other than
                  with respect to the certificate of incorporation or by-laws of
                  the Company) or failure to obtain such consent or other
                  approval would not cause a Material Adverse Effect;

                           (vii) the descriptions in the Prospectus of statutes,
                  legal and governmental proceedings and contracts and other
                  documents are accurate in all material respects; the
                  statements (A) in the Prospectus under the captions "The
                  Offering", "Underwriters", "Description of Capital Stock" and
                  "Plan of Distribution" (B) in the Registration Statement under
                  Item 15, (C) in "Item 3 - Legal Proceedings" of the Company's
                  most recent annual report on Form 10-K incorporated by
                  reference in the Prospectus and (D) in "Item 1 - Legal
                  Proceedings" of Part II of the Company's quarterly reports on
                  Form 10-Q, if any, filed since such annual report, in each
                  case insofar as such statements constitute summaries of the
                  legal matters, documents, conclusions or proceedings referred
                  to therein in each case in all material respects, fairly
                  present the information called for with respect to such legal
                  matters, documents, conclusions and proceedings and fairly
                  summarize the matters referred to therein; and after due
                  inquiry, such counsel does not know of any legal or
                  governmental proceedings pending or threatened to which the
                  Company or any of its subsidiaries is a party or to which any
                  of the properties of the Company or any of its subsidiaries is
                  subject that are required to be described in the Registration
                  Statement or the Prospectus and are not so described or of any
                  statutes, regulations, contracts or other documents that are
                  required to be described in the Registration Statement or the
                  Prospectus or to be filed or incorporated by reference as
                  exhibits to the Registration Statement that are not described,
                  filed or incorporated as required;

                           (viii) the Company is not and, after giving effect to
                  the offering and sale of the Shares and the application of the
                  proceeds thereof as described in the Prospectus, will not be
                  an "investment company" within the meaning of the Investment
                  Company Act of 1940, as amended and the rules and regulations
                  of the Commission thereunder, without taking into account of
                  any exemption under the Investment Company Act arising out of
                  the number of holders of the Company's securities;

                           (ix) the Company is not a "holding company" within
                  the meaning of the Public Utility Holding Company Act and the
                  rules and regulations of the Commission thereunder;

                           (x) such counsel (A) is of the opinion that each
                  document, if any, filed pursuant to the Exchange Act and
                  incorporated by reference in the Prospectus (except for
                  financial statements and schedules and other financial and
                  statistical data included or incorporated by reference therein
                  as to which such counsel need


                                       10
<PAGE>

                  not express any opinion) complied when so filed as to form in
                  all material respects with the Exchange Act and the applicable
                  rules and regulations of the Commission thereunder, (B) has no
                  reason to believe that (except for financial statements and
                  schedules and other financial and statistical data as to which
                  such counsel need not express any belief and except for that
                  part of the Registration Statement that constitutes the Form
                  T-1 heretofore referred to) the Registration Statement, when
                  it became effective, contained any untrue statement of a
                  material fact or omitted to state a material fact required to
                  be stated therein or necessary to make the statements therein
                  not misleading, (C) is of the opinion that the Registration
                  Statement, as of its effective date, and Prospectus, as of the
                  date of the then most recent supplement thereto, (except for
                  financial statements and schedules and other financial and
                  statistical data included or incorporated by reference therein
                  as to which such counsel need not express any opinion) comply
                  as to form in all material respects with the Securities Act
                  and the applicable rules and regulations of the Commission
                  thereunder and (D) has no reason to believe that (except for
                  financial statements and schedules and other financial and
                  statistical data as to which such counsel need not express any
                  belief) the Prospectus, as of the date such opinion is
                  delivered and as supplemented or amended to such date,
                  contains any untrue statement of a material fact or omits to
                  state a material fact necessary in order to make the
                  statements therein, in the light of the circumstances under
                  which they were made, not misleading;

                           (xi) The Shares have been duly and validly
                  authorized, and when issued and delivered in accordance with
                  the provisions of this Agreement, will be validly issued,
                  fully paid and non-assessable, and the issuance of the Shares
                  will not be subject to any preemptive or similar rights under
                  Federal, Delaware or New York law or the Company's certificate
                  of incorporation or by-laws; and

                           (xii) Subject to the qualifications and limitations
                  stated herein, the statements set forth in the Prospectus
                  under the caption "Certain Material U.S. Tax Consequences to
                  Non-U.S. Holders" insofar as they purport to constitute
                  summaries of matters of United States federal tax laws and
                  regulations or legal conclusions with respect thereto,
                  constitute accurate summaries of the matters described therein
                  in all material respects.

                  For purposes of the foregoing opinion, Winston & Strawn may
         state that (a) "Applicable Law" means only the laws of the United
         States, the State of New York and the General Corporation Law of the
         State of Delaware which, in such counsel's experience, are normally
         applicable to transactions of the type contemplated by this
         Underwriting Agreement, but without such counsel having made any
         special investigation as to the applicability of any specific law, rule
         or regulation except as specified, and (b) "Governmental Authority"
         means any New York or federal executive, legislative, judicial
         administrative or regulatory body.

                  With respect to Section 5(c)(x) above, Winston & Strawn may
         state that their opinion and beliefs are based upon their participation
         in the preparation of the Registration Statement and Prospectus and any
         amendments or supplements thereto and


                                       11
<PAGE>

         documents incorporated therein by reference and review and discussion
         of the contents thereof, but are without independent check or
         verification, except as specified.

                  (d) The Company shall have furnished an opinion of L. Russell
         Mitten, Vice President and General Counsel of the Company, with respect
         to FERC and all applicable state utility regulators' orders and/or
         authorizations necessary to enable the Company to issue the Shares,
         addressed to the Underwriters and dated the Closing Date, in form and
         substance reasonably satisfactory to the Underwriters.

                  The opinions described in Sections 5(c) and 5(d) above shall
         be rendered to the Underwriters at the request of the Company and shall
         so state therein.

                  (e) The Underwriters shall have received on the Closing Date
         an opinion of Simpson Thacher & Bartlett, special counsel for the
         Underwriters, dated the Closing Date, covering the matters referred to
         in Sections 5(c)(v) and 5(c)(vii) (but only as to the statements in the
         Prospectus under "The Offering", "Underwriters" and "Plan of
         Distribution") and clauses 5(c)(x)(B), 5(c)(x)(C) and 5(c)(x)(D) above.

                  With respect to clauses 5(c)(x)(B), 5(c)(x)(C) and 5(c)(x)(D)
         above, Simpson Thacher & Bartlett may state that their opinion and
         beliefs are based upon their participation in the preparation of the
         Registration Statement and Prospectus and any amendments or supplements
         thereto (but not including documents incorporated therein by reference)
         and review and discussion of the contents thereof (including documents
         incorporated therein by reference), but are without independent check
         or verification, except as specified.

                  (f) The Underwriters shall have received on the date of this
         Agreement (other than from Arthur Andersen LLP with respect to GTE
         Minnesota Inc.), dated the date of this Agreement, and on the Closing
         Date, dated the Closing Date, letters, in form and substance
         satisfactory to the Underwriters, from the Company's independent public
         accountants listed in Section 1(n) of this Agreement and each of the
         other accountants listed in Section 1(n) of this Agreement (except for
         PricewaterhouseCoopers LLP), containing statements and information of
         the type ordinarily included in accountants' "comfort letters" to
         underwriters with respect to the financial statements and certain
         financial information contained in or incorporated by reference into
         the Prospectus.

                  (g) The "lock-up" agreements, each substantially in the form
         of Exhibit A hereto, between the Representatives and each of the
         directors and certain executive officers of the Company relating to
         sales and certain other dispositions of shares of Common Stock or
         certain other securities, delivered to the Representatives on or before
         the date hereof, shall be in full force and effect on the Closing Date.

                  (h) The Shares shall have been approved for listing, subject
         only to official notice of issuance, on the New York Stock Exchange.

         The several obligations of the Underwriters to purchase Option
Securities hereunder are subject to the delivery to the Representatives on the
Option Closing Date of such documents as the Representatives may reasonably
request, including those set forth above, with respect to the


                                       12
<PAGE>

         good standing of the Company, the due authorization and issuance of the
         Option Securities and other matters related to the issuance of the
         Option Securities.

         6. COVENANTS OF THE COMPANYIn further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:

                  (a) to advise the Underwriters promptly and, if requested,
         confirm such advice in writing, of the happening of any event which
         makes any statement of a material fact made in the Registration
         Statement or the Prospectus untrue or which requires the making of any
         additions to or changes in the Registration Statement or the Prospectus
         (as amended or supplemented from time to time) in order to make the
         statements therein, in the light of the circumstances under which they
         were made, not misleading; to advise the Underwriters promptly of any
         order preventing or suspending the use of the Prospectus, of any
         suspension of the qualification of the Securities for offering or sale
         in any jurisdiction and of the initiation or threatening of any
         proceeding for any such purpose; and to use its best efforts to prevent
         the issuance of any such order preventing or suspending the use of the
         Registration Statement or the Prospectus or suspending any such
         qualification and, if any such suspension is issued, to obtain the
         lifting thereof at the earliest possible time;

                  (b) To furnish the Representatives, without charge, one
         conformed copy of the Registration Statement (including exhibits
         thereto) and for delivery to each other Underwriter a conformed copy of
         the Registration Statement (without exhibits thereto) and to furnish
         the Representatives in New York City, without charge, prior to 10:00
         a.m. New York City time on the business day next succeeding the date of
         this Agreement and during the period mentioned in Section 6(c) below,
         as many copies of the Prospectus, any documents incorporated by
         reference therein and any supplements and amendments thereto or to the
         Registration Statement as the Representatives may reasonably request.

                  (c) Before amending or supplementing the Registration
         Statement or the Prospectus with respect to the Shares, to furnish to
         the Representatives a copy of each such proposed amendment or
         supplement and not to file any such proposed amendment or supplement to
         which the Representatives reasonably object.

                  (d) If, during such period after the first date of the public
         offering of the Shares as in the opinion of counsel for the
         Underwriters the Prospectus is required by law to be delivered in
         connection with sales by an Underwriter or dealer, any event shall
         occur or condition exist as a result of which it is necessary to amend
         or supplement the Prospectus in order to make the statements therein,
         in the light of the circumstances when the Prospectus is delivered to a
         purchaser, not misleading, or if, in the opinion of counsel for the
         Underwriters, it is necessary to amend or supplement the Prospectus to
         comply with applicable law, forthwith to prepare, file with the
         Commission and furnish, at its own expense, to the Underwriters and to
         the dealers (whose names and addresses the Representatives will furnish
         to the Company) to which Offered Securities may have been sold by the
         Representatives on behalf of the Underwriters and to any other dealers
         upon request, either amendments or supplements to the Prospectus so
         that the statements in the Prospectus as so amended or supplemented
         will not, in the light of the circumstances


                                       13
<PAGE>

         when the Prospectus is delivered to a purchaser, be misleading or so
         that the Prospectus, as amended or supplemented, will comply with law.

                  (e) To endeavor to qualify the Shares for offer and sale under
         the securities or Blue Sky laws of such jurisdictions as the
         Representatives shall reasonably request.

                  (f) To make generally available to the Company's security
         holders and to the Representatives as soon as practicable an earning
         statement covering a twelve-month period beginning on the first day of
         the first full fiscal quarter after the date of this Agreement, which
         earning statement shall satisfy the provisions of Section 11(a) of the
         Securities Act and the rules and regulations of the Commission
         thereunder. If such fiscal quarter is the last fiscal quarter of the
         Company's fiscal year, such earning statement shall be made available
         not later than 90 days after the close of the period covered thereby
         and in all other cases shall be made available not later than 45 days
         after the close of the period covered thereby.

                  (g) The Company, during the period when a Prospectus relating
         to the Shares is required to be delivered under the Act, will timely
         file all documents required to be filed with the Commission pursuant to
         Section 13 or 14 of the Act.

                  (h) To apply the net proceeds from the sale of the Shares as
         set forth in the Prospectus under the heading "Use of Proceeds".

                  (i) Whether or not the transactions contemplated in this
         Agreement are consummated or this Agreement is terminated, to pay or
         cause to be paid all expenses incident to the performance of its
         obligations under this Agreement, including: (i) the fees,
         disbursements and expenses of the Company's counsel and the Company's
         accountants in connection with the registration and delivery of the
         Shares under the Securities Act and all other fees or expenses in
         connection with the preparation and filing of the Registration
         Statement, any preliminary prospectus, the Prospectus and amendments
         and supplements to any of the foregoing, including all printing costs
         associated therewith, and the mailing and delivering of copies thereof
         to the Underwriters and dealers, in the quantities hereinabove
         specified, (ii) all costs and expenses related to the transfer and
         delivery of the Shares to the Underwriters, including any transfer or
         other taxes payable thereon, (iii) the cost of printing or producing
         any Blue Sky or legal investment memorandum in connection with the
         offer and sale of the Shares under state law and all expenses in
         connection with the qualification of the Shares for offer and sale
         under state law as provided in Section 6(d) hereof, including filing
         fees and the reasonable fees and disbursements of counsel for the
         Underwriters in connection with such qualification and in connection
         with the Blue Sky or legal investment memorandum, (iv) all filing fees
         and the reasonable fees and disbursements of counsel to the
         Underwriters incurred in connection with the review and qualification
         of the offering of the Shares by the National Association of Securities
         Dealers, Inc., (v) the costs and expenses of the Company relating to
         investor presentations on any "road show" undertaken in connection with
         the marketing of the offering of the Shares, including, without
         limitation, expenses associated with the production of road show slides
         and graphics, fees and expenses of any consultants engaged in
         connection with the road show


                                       14
<PAGE>

         presentations with the prior approval of the Company, travel and
         lodging expenses of the representatives and officers of the Company and
         any such consultants, and the cost of any aircraft chartered in
         connection with the road show, and (vi) all other costs and expenses
         incident to the performance of the obligations of the Company hereunder
         for which provision is not otherwise made in this Section. It is
         understood, however, that except as provided in this Section, Section 7
         entitled "Indemnity and Contribution" and the last paragraph of Section
         9 below, the Underwriters will pay all of their costs and expenses,
         including fees and disbursements of their counsel, and any advertising
         expenses connected with any offers they may make.

                  (j) To use its best efforts to effect the listing of the
         Shares of Common Stock on The New York Stock Exchange.

         7. INDEMNITY AND CONTRIBUTION(a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein.

         (b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.

         (c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either Section 7(a) or 7(b), such person (the "INDEMNIFIED
PARTY") shall promptly notify the person against whom such indemnity may be
sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay 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, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party


                                       15
<PAGE>

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 respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Representatives, in the case of parties indemnified
pursuant to Section 7(a) above, and by the Company, in the case of parties
indemnified pursuant to Section 7(b) above. 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.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.

         (d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) 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 hand from the offering of the Shares or (ii) if the allocation provided by
clause 7(d)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
7(d)(i) above but also the relative fault of the Company on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, 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 hand in
connection with the offering of the Offered Securities shall be deemed to be in
the same respective proportions as the net proceeds from the offering of such
Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus Supplement, bear
to the aggregate Public Offering Price of the Shares. The relative fault of the
Company on the one hand and the Underwriters on the other hand 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


                                       16
<PAGE>

omission to state a material fact relates to information supplied by the Company
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the respective principal amounts of Shares they
have purchased hereunder, and not joint.

         (e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 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 that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, 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 Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.

         (f) The indemnity and contribution provisions contained in this Section
7 and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
the Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Shares.


                                       17
<PAGE>

         8. TERMINATIONThis Agreement shall be subject to termination by notice
given by the Representatives to the Company, if (a) after the execution and
delivery of the Underwriting Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Representatives, is material and
adverse and (b) in the case of any of the events specified in clauses 8(a)(i)
through 8(a)(iv), such event, singly or together with any other such event,
makes it, in the judgment of the Representatives, impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.

         9. DEFAULTING UNDERWRITERSIf, on the Closing Date or the Option Closing
Date, any one or more of the Underwriters shall fail or refuse to purchase
Underwriters' Shares that it has or they have agreed to purchase hereunder on
such date, and the aggregate amount of Underwriters' Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate amount of the Underwriters'
Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the amount of Underwriters' Shares
set forth opposite their respective names in the Underwriting Agreement bears to
the aggregate amount of Underwriters' Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as the
Representatives may specify, to purchase the Underwriters' Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; PROVIDED that in no event shall the amount of Underwriters'
Securities that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 10 by an amount in excess of
one-ninth of such amount of Underwriters' Shares without the written consent of
such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Underwriters' Shares and the aggregate amount of
Underwriters' Shares with respect to which such default occurs is more than
one-tenth of the aggregate amount of Underwriters' Shares to be purchased on
such date, and arrangements satisfactory to the Representatives and the Company
for the purchase of such Underwriters' Shares are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company. In any such case either the
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. If, on the Option Closing Date,
any Underwriter or Underwriters shall fail or refuse to purchase Option Shares
and the aggregate number of Option Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Option Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Option Shares or (ii) purchase
not less than the number of Option Shares that such non-defaulting Underwriters
would have been obligated to purchase in the absence of such default. Any action
taken under this paragraph


                                       18
<PAGE>

shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.

         If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.

         10. COUNTERPARTSThis Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

         11. APPLICABLE LAWThis Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

         12. HEADINGSThe headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.


                                       19
<PAGE>

                                   SCHEDULE I

                            SIGNIFICANT SUBSIDIARIES

             Electric Lightwave, Inc.

             Citizens Telecommunications Company of California, Inc.

             Citizens Telecommunications Company

             Citizens Utilities Rural Company, Inc.

             Citizens Telecommunications Company of New York, Inc.

             Citizens Telecommunications Company of Tennessee L.L.C.

             Citizens Telecommunications Company of West Virginia, Inc.

             Citizens Telecommunications Company of the White Mountains, Inc.

             Citizens Directory Services Company, Inc.

             Citizens Utilities Capital L.P.


                                       20
<PAGE>

                                    EXHIBIT A

                            [FORM OF LOCK-UP LETTER]


                                                                          [Date]


J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Banc of America Securities LLC
Salomon Smith Barney Inc
Lehman Brothers Inc.
The Buckingham Research Group Incorporated
Dain Rauscher Incorporated
Legg Mason Wood Walker, Incorporated
Mizuho International plc
Robertson Stephens, Inc.
TD Securities (USA) Inc.
c/o J.P. Morgan Securities Inc.
     270 Park Avenue
     New York, NY  10017

Dear Sirs and Mesdames:

         The undersigned understands that J.P. Morgan Securities Inc.
("JPMORGAN") and Morgan Stanley & Co. Incorporated ("MORGAN STANLEY") propose to
enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with
Citizens Communications Company, a Delaware corporation (the "COMPANY"),
providing for the public offering (the "PUBLIC OFFERING") by the several
Underwriters, including JPMorgan and Morgan Stanley (the "UNDERWRITERS"), of
Common Stock, par value $.25 per share of the Company (the "COMMON STOCK").

         To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of JPMorgan
and Morgan Stanley on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the final
prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (a) the sale of any Common Stock to the Underwriters pursuant to the
Underwriting Agreement or (b) transactions relating to shares of Common Stock or
other securities acquired in open market transactions after the completion of
the Public Offering. In


                                       21
<PAGE>

addition, the undersigned agrees that, without the prior written consent of
JPMorgan and Morgan Stanley on behalf of the Underwriters, it will not, during
the period commencing on the date hereof and ending 90 days after the date of
the Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.

         Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.

                                                     Very truly yours,


                                                     ---------------------------
                                                     (Name)


                                                     ---------------------------
                                                     (Address)


                                       2
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>4
<FILENAME>a2052437zex-4_1.txt
<DESCRIPTION>EXHIBIT 4.1
<TEXT>

<PAGE>

                                                                     EXHIBIT 4.1

                                                                [Execution Copy]











                         CITIZENS COMMUNICATIONS COMPANY

                                       and

                            THE CHASE MANHATTAN BANK,

                                as Warrant Agent



                                WARRANT AGREEMENT

                            Dated as of June 19, 2001

<PAGE>


                                TABLE OF CONTENTS

                                                                            PAGE


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

  SECTION 1.01.   Definitions................................................1
  SECTION 1.02.   Compliance Certificates and Opinions......................15
  SECTION 1.03.   Form of Documents Delivered to Warrant Agent..............16
  SECTION 1.04.   Acts of Holders; Record Dates.............................16
  SECTION 1.05.   Notices...................................................17
  SECTION 1.06.   Notice to Holders; Waiver.................................18
  SECTION 1.07.   Effect of Headings and Table of Contents..................19
  SECTION 1.08.   Successors and Assigns....................................19
  SECTION 1.09.   Separability Clause.......................................19
  SECTION 1.10.   Benefits of Agreement.....................................19
  SECTION 1.11.   Governing Law.............................................19
  SECTION 1.12.   Legal Holidays............................................19
  SECTION 1.13.   Counterparts..............................................20
  SECTION 1.14.   Inspection of Agreement...................................20
  SECTION 1.15.   Appointment of Financial Institution  as Agent for
                  the Company...............................................20
  SECTION 1.16.   Fees and Expenses.........................................20

 ARTICLE 2 - CERTIFICATE FORMS..............................................20

  SECTION 2.01.   Forms of Certificates Generally...........................20
  SECTION 2.02.   Form of Warrant Agent's Certificate  of Authentication....21

 ARTICLE 3 - THE SECURITIES.................................................21

  SECTION 3.01.   Amount; Form and Denominations............................21
  SECTION 3.02.   Rights and Obligations Evidenced by the Certificates......22
  SECTION 3.03.   Execution, Authentication, Delivery and Dating............22
  SECTION 3.04.   Temporary Certificates....................................23
  SECTION 3.05.   Registration; Registration of Transfer and Exchange.......24
  SECTION 3.06.   Book-entry Interests......................................25
  SECTION 3.07.   Notices to Holders........................................25
  SECTION 3.08.   Appointment of Successor Depositary.......................26
  SECTION 3.09.   Definitive Certificates...................................26
  SECTION 3.10.   Mutilated, Destroyed, Lost and Stolen Certificates........26
  SECTION 3.11.   Persons Deemed Owners.....................................27
  SECTION 3.12.   Cancellation..............................................28
  SECTION 3.13.   Creation of Treasury Equity Units by Substitution of
                  Treasury Securities.......................................28
  SECTION 3.14.   Reestablishment of Equity Units...........................29
  SECTION 3.15.   Transfer of Collateral upon Occurrence of Termination
                  Event.....................................................31
  SECTION 3.16.   No Consent to Assumption..................................32
  SECTION 3.17.   CUSIP Numbers.............................................32

                                       i
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)


 ARTICLE 4 - THE NOTES AND APPLICABLE OWNERSHIP INTEREST OF THE
            TREASURY PORTFOLIO..............................................32

  SECTION 4.01.   Interest Payments; Rights to Interest Payments Preserved..32
  SECTION 4.02.   Notice and Voting.........................................33
  SECTION 4.03.   Tax Event Redemption......................................34

 ARTICLE 5 - THE WARRANTS...................................................35

  SECTION 5.01.   Purchase of Shares of Common Stock........................35
  SECTION 5.02.   Initial and Additional Remarketing........................37
  SECTION 5.03.   Payment of Purchase Price; Final Remarketing..............38
  SECTION 5.04.   Failed Final Remarketing..................................42
  SECTION 5.05.   Issuance of Shares of Common Stock........................42
  SECTION 5.06.   Adjustment of Settlement Rate.............................43
  SECTION 5.07.   Notice of Adjustments and Certain Other Events............49
  SECTION 5.08.   Termination Event; Notice.................................50
  SECTION 5.09.   Early Settlement..........................................50
  SECTION 5.10.   No Fractional Shares......................................52
  SECTION 5.11.   Charges and Taxes.........................................52

 ARTICLE 6 - REMEDIES.......................................................53

  SECTION 6.01.   Unconditional Right of Holders to Purchase Shares
                  of Common Stock...........................................53
  SECTION 6.02.   Restoration of Rights and Remedies........................53
  SECTION 6.03.   Rights and Remedies Cumulative............................53
  SECTION 6.04.   Delay or Omission Not Waiver..............................53
  SECTION 6.05.   Undertaking for Costs.....................................53
  SECTION 6.06.   Waiver of Stay or Extension Laws..........................54

 ARTICLE 7 - THE WARRANT AGENT..............................................54

  SECTION 7.01.   Certain Duties and Responsibilities.......................54
  SECTION 7.02.   Notice of Default.........................................55
  SECTION 7.03.   Certain Rights of Warrant Agent...........................55
  SECTION 7.04.   Not Responsible for Recitals or Issuance of Securities....57
  SECTION 7.05.   May Hold Securities.......................................57
  SECTION 7.06.   Money Held in Custody.....................................57
  SECTION 7.07.   Compensation and Reimbursement............................57
  SECTION 7.08.   Corporate Warrant Agent Required; Eligibility.............58
  SECTION 7.09.   Resignation and Removal; Appointment of Successor.........58
  SECTION 7.10.   Acceptance of Appointment by Successor....................59
  SECTION 7.11.   Merger, Conversion, Consolidation or Succession to
                  Business..................................................60
  SECTION 7.12.   Preservation of Information; Communications to Holders....60
  SECTION 7.13.   No Obligations of Warrant Agent...........................60


                                       ii
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)


  SECTION 7.14.   Tax Compliance............................................61

 ARTICLE 8 - SUPPLEMENTAL AGREEMENTS........................................61

  SECTION 8.01.   Supplemental Agreements Without Consent of Holders........61
  SECTION 8.02.   Supplemental Agreements with Consent of Holders...........62
  SECTION 8.03.   Execution of Supplemental Agreements......................63
  SECTION 8.04.   Effect of Supplemental Agreements.........................63
  SECTION 8.05.   Reference to Supplemental Agreements......................63

 ARTICLE 9 - CONSOLIDATION OR MERGER, SALE OR CONVEYANCE....................63

  SECTION 9.01.   Covenant Not to Consolidate or Merge, Sell or Convey
                  Property Except Under Certain Conditions..................63
  SECTION 9.02.   Rights and Duties of Successor Person.....................64
  SECTION 9.03.   Officers' Certificate and Opinion of Counsel Given
                  to Warrant Agent..........................................65

 ARTICLE 10 - COVENANTS.....................................................65

  SECTION 10.01.  Performance under Warrants................................65
  SECTION 10.02.  Maintenance of Office or Agency...........................65
  SECTION 10.03.  Company to Reserve Common Stock...........................65
  SECTION 10.04.  Covenants as to Common Stock..............................66
  SECTION 10.05.  Statements of Officers of the Company as to Default.......66
  SECTION 10.06.  ERISA.....................................................66


                                      iii
<PAGE>

            WARRANT AGREEMENT, dated as of June 19, 2001 (the "AGREEMENT"),
between CITIZENS COMMUNICATIONS COMPANY, a Delaware corporation (the "COMPANY"),
and THE CHASE MANHATTAN BANK, a New York banking corporation, acting as warrant
agent and attorney-in-fact for the Holders of Securities (as defined herein)
from time to time (the "WARRANT AGENT").

                                    RECITALS

            The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.

            All things necessary to make the Warrants, when the Certificates are
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Warrant Agent, as provided in this Agreement, the valid
obligations of the Company, and to constitute these presents a valid agreement
of the Company, in accordance with its terms, have been done. For and in
consideration of the premises and the purchase of the Securities by the Holders
thereof, it is mutually agreed as follows:

                                   ARTICLE 1
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

            SECTION 1.01. DEFINITIONS.

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

            (a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular, and nouns
and pronouns of the masculine gender include the feminine and neuter genders;

            (b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;

            (c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision;

            (d) the following terms have the meanings given to them in the
Remarketing Agreement: (i) Remarketing; and (ii) Remarketing Procedures;

            (e) the following terms have the meanings given to them in this
SECTION 1.01(E):

            "ACT" has the meaning, with respect to any Holder, set forth in
SECTION 1.04.

            "ADDITIONAL REMARKETING" has the meaning set forth in SECTION 5.02.


                                      -1-
<PAGE>

            "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.

            "AGREEMENT" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.

            "APPLICABLE AMOUNT" means the aggregate principal amount of the
Notes which are components of Equity Units on the Initial Remarketing Date.

            "APPLICABLE MARKET VALUE" has the meaning set forth in Section 5.01.

            "APPLICABLE OWNERSHIP INTEREST" means, with respect to an Equity
Unit that includes the treasury portfolio, (A) a 1/40, or 2.5%, undivided
beneficial ownership interest in a $1,000 face amount of a principal or interest
strip in a U.S. treasury security included in the treasury portfolio that
matures on or prior to August 16, 2004; and (B) for the scheduled interest
payment on the Notes that occurs on August 17, 2004, in the case of a successful
remarketing of the Notes, or for each scheduled interest payment date on the
Notes that occurs after the date upon which the Notes are redeemed due to a tax
event and on or before August 17, 2004, in the case of a tax event redemption, a
1/40, undivided beneficial ownership interest in a $1,000 face amount of a
principal or interest strip in a U.S. treasury security included in the treasury
portfolio that matures on or prior to such date.

            "APPLICABLE SPREAD" means the spread determined as set forth below,
based on the Prevailing Rating of the Notes in effect at the close of business
on the Business Day immediately preceding the date of a Failed Final
Remarketing.

<TABLE>
<CAPTION>

PREVAILING RATING OF THE NOTES                         SPREAD
- ---------------------------------------------------  -----------

<S>                                                     <C>
AA/"Aa"...........................................      3.00%
A/"a".............................................      4.00%
BBB/"Baa".........................................      5.00%
Below BBB/"Baa"...................................      7.00%
</TABLE>

            "APPLICANTS" has the meaning set forth in SECTION 7.12(B).

            "AUTHORIZED NEWSPAPER" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in The City
of New York, whether or not published on days that are legal holidays, and of
general circulation in The City of New York. The Authorized Newspaper for the
purposes of the Reset Announcement Date is currently anticipated to be The Wall
Street Journal.

            "BANKRUPTCY CODE" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.


                                      -2-
<PAGE>

            "BENCHMARK TREASURY" means direct obligations of the United States
(which may be obligations traded on a when-issued basis only) having a maturity
comparable to the remaining term to maturity of the Notes, as agreed upon by the
Company and the Reset Agent. The rate for the Benchmark Treasury will be the bid
side rate displayed at 10:00 a.m., New York City time, (i) in case of the first
Initial Remarketing on the third Business Day immediately preceding May 17, 2004
and in the case of the Final Remarketing on the third Business day immediately
preceding August 17, 2004, on the seventh Business Day immediately preceding the
date of such remarketing, and (ii) and in the case of any Additional Remarketing
on the fourth Business Day immediately preceding the date on which the Notes
will be remarketed, in the Telerate system (or if the Telerate system is (a) no
longer available on that date or (b) in the opinion of the Reset Agent (after
consultation with the Company) no longer an appropriate system from which to
obtain such rate, such other nationally recognized quotation system as, in the
opinion of the Reset Agent (after consultation with the Company) is
appropriate). If such rate is not so displayed, the rate for the Benchmark
Treasury shall be, as calculated by the Reset Agent, the yield to maturity for
the Benchmark Treasury, expressed as a bond equivalent on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis, and computed by
taking the arithmetic mean of the secondary market bid rates, as of 10:30 a.m.,
New York City time, (i) in case of the first Initial Remarketing on the third
Business Day immediately preceding May 17, 2004 and in the case of the Final
Remarketing on the third Business Day immediately preceding August 17, 2004, on
the seventh Business Day immediately preceding the date of such remarketing, and
(ii) in the case of any Additional Remarketing, on the fourth Business Day
immediately preceding the date of such Remarketing, as applicable, of three
leading United States government securities dealers selected by the Reset Agent
(after consultation with the Company) (which may include the Reset Agent or an
Affiliate thereof).

            "BENEFICIAL OWNER" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Depositary or on the books of a Person maintaining an account
with such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).

            "BOARD OF DIRECTORS" means the board of directors of the Company or
a duly authorized committee of that board.

            "BOARD RESOLUTION" means one or more resolutions of the Board of
Directors, a copy of which has been 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 Warrant Agent.

            "BOOK-ENTRY INTEREST" means a beneficial interest in a Global
Certificate, registered in the name of a Depositary or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Depositary as described in SECTION 3.06.

            "BUSINESS DAY" means, with respect to any security, unless otherwise
specified in a Board Resolution and an Officers' Certificate with respect to a
particular series of securities, a day that (a) in the Place(s) of Payment (as
defined in the Indenture) in which amounts are


                                      -3-
<PAGE>

payable, as specified in the form of such security, and (b) in the city in which
the Corporate Trust Office is located, is not a Saturday or Sunday or a day on
which banking institutions are authorized or required by law or regulation to
close.

            "CASH" shall have the meaning set forth in Article 1 of the Pledge
Agreement.

            "CASH SETTLEMENT" has the meaning set forth in Section 5.03(A)(I).

            "CERTIFICATE" means an Equity Units Certificate or a Treasury Equity
Units Certificate.

            "CLEARING AGENCY" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee of
that organization, shall be registered a Global Certificate and which shall
undertake to effect book-entry transfers and pledges of the Securities.

            "CLOSING PRICE" has the meaning set forth in SECTION 5.01.

            "CODE" means the Internal Revenue Code of 1986, as amended.

            "COLLATERAL" has the meaning set forth in Article 1 of the Pledge
Agreement.

            "COLLATERAL ACCOUNT" has the meaning set forth in Article 1 of the
Pledge Agreement.

            "COLLATERAL AGENT" means The Bank of New York, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have become
such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.

            "COLLATERAL SUBSTITUTION" has the meaning set forth in SECTION 3.13.

            "COMMON STOCK" means the Citizens Communications Company common
stock, par value $0.25 per share.

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

            "CONSTITUENT PERSON" has the meaning set forth in SECTION 5.05(B).

            "CORPORATE TRUST OFFICE" means the principal corporate trust office
of the Warrant Agent at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at
450 West 33rd Street, New York, New York 10001, Attention: Institutional Trust
Services.

            "COUPON RATE" means the percentage rate per annum at which each Note
will bear interest initially and, following a Successful Initial Remarketing or
a Successful Final


                                      -4-
<PAGE>

Remarketing, as the case may be, on and after the Reset Effective Date, the
Reset Rate as calculated by the Reset Agent, or following a Failed Final
Remarketing, on and after August 17, 2004, the Reset Rate that will be equal to
the Two-Year Benchmark Treasury in effect on the Final Remarketing Date plus the
Applicable Spread.

            "CURRENT MARKET PRICE" has the meaning set forth in SECTION
5.05(a)(8).

            "DEPOSITARY" means a clearing agency registered under the Exchange
Act that is designated to act as Depositary for the Securities as contemplated
by SECTIONS 3.06, 3.07, 3.08 and 3.09.

            "DEPOSITARY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Depositary
effects book entry transfers and pledges of securities deposited with the
Depositary.

            "DTC" means The Depository Trust Company.

            "EARLY SETTLEMENT" has the meaning set forth in SECTION 5.08(A).

            "EARLY SETTLEMENT AMOUNT" has the meaning set forth in SECTION
5.08(a).

            "EARLY SETTLEMENT DATE" has the meaning set forth in SECTION
5.08(A).

            "EARLY SETTLEMENT RATE" has the meaning set forth in SECTION
5.08(B).

            "EQUITY UNIT" means the collective rights and obligations of a
Holder of an Equity Units Certificate in respect of the Note or an appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
subject in each case to the Pledge thereof, and the related Warrant; provided,
that the appropriate Applicable Ownership Interest (as specified in clause (B)
of the definition of such term) of the Treasury Portfolio shall not be subject
to the Pledge.

            "EQUITY UNITS CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Equity Units specified
on such certificate.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

            "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and any statute successor thereto, in each case as amended from time to
time, and the rules and regulations promulgated thereunder.

            "EXPIRATION DATE" has the meaning set forth in SECTION 1.04(E).

            "EXPIRATION TIME" has the meaning set forth in SECTION 5.05(A)(6).

            "FAILED FINAL REMARKETING" has the meaning set forth in SECTION
5.03(B).

            "FAILED INITIAL REMARKETING" has the meaning set forth in SECTION
5.02.


                                      -5-
<PAGE>

            "FINAL REMARKETING" has the meaning set forth in SECTION 5.03(B).

            "FINAL REMARKETING DATE" has the meaning set forth in SECTION
5.03(B).

            "GLOBAL CERTIFICATE" means a Certificate that evidences all or part
of the Securities and is registered in the name of a Clearing Agency or a
nominee thereof.

            "HOLDER" means, with respect to a Security, the Person in whose name
the Security evidenced by a Certificate is registered in the Security Register;
provided, however, that in determining whether the Holders of the requisite
number of Securities have voted on any matter, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Security
remains in the form of one or more Global Certificates and if the Depositary
which is the registered holder of such Global Certificate has sent an omnibus
proxy assigning voting rights to the Depositary Participants to whose accounts
the Securities are credited on the Record Date, the term "Holder" shall mean
such Depositary Participant acting at the direction of the Beneficial Owners.

            "INDENTURE" means the Senior Indenture, dated as of May 23, 2001,
between the Company and the Indenture Trustee (including any provisions of the
TIA that are deemed incorporated therein), as supplemented by the Second
Supplemental Indenture, dated as of June 19, 2001, pursuant to which the Notes
will be issued.

            "INDENTURE TRUSTEE" means The Chase Manhattan Bank, a New York
banking corporation, as trustee under the Indenture, or any successor thereto in
such capacity.

            "INITIAL REMARKETING" has the meaning set forth in SECTION 5.02.

            "INITIAL REMARKETING DATE" has the meaning set forth in SECTION
5.02.

            "ISSUER ORDER" or "ISSUER REQUEST" means a written order or request
signed in the name of the Company by its Chairman of the Board, its President or
one of its Vice Presidents, its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary, and delivered to the Warrant Agent.

            "NEW YORK OFFICE" shall have the meaning set forth in SECTION 10.02.

            "NON-ELECTING SHARE" has the meaning set forth in SECTION 5.05(B).

            "NOTES" means the series of Notes issued by the Company under the
Indenture.

            "NYSE" means The New York Stock Exchange, Inc.

            "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman
of the Board, its President or one of its Vice Presidents, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company,
and delivered to the Warrant Agent. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Agreement shall include:


                                      -6-
<PAGE>

            (i) a statement that each officer signing the Officers' Certificate
      has read the covenant or condition and the definitions relating thereto;

            (ii) a brief statement of the nature and scope of the examination or
      investigation undertaken by each officer in rendering the Officers'
      Certificate;

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

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

            "OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel to the Company (and who may be an employee of the Company), and who
shall be reasonably acceptable to the Warrant Agent or in the case of an Opinion
of Counsel delivered under the Pledge Agreement, reasonably acceptable to the
Collateral Agent, Securities Intermediary or Custodial Agent, as the case may
be. An opinion of counsel may rely on certificates as to matters of fact.

            "OUTSTANDING SECURITIES" means, with respect to any Security and as
of the date of determination, all Securities evidenced by Certificates
theretofore authenticated, executed and delivered under this Agreement, except:

      (i)   If a Termination Event has occurred, (i) Treasury Equity Units and
            (ii) Equity Units for which the underlying Notes have been
            theretofore deposited with the Warrant Agent in trust for the
            Holders of such Equity Units;

      (ii)  Securities evidenced by Certificates theretofore cancelled by the
            Warrant Agent or delivered to the Warrant Agent for cancellation or
            deemed cancelled pursuant to the provisions of this Agreement; and

      (iii) Securities evidenced by Certificates in exchange for or in lieu of
            which other Certificates have been authenticated, executed on behalf
            of the Holder and delivered pursuant to this Agreement, other than
            any such Certificate in respect of which there shall have been
            presented to the Warrant Agent proof satisfactory to it that such
            Certificate is held by a protected purchaser in whose hands the
            Securities evidenced by such Certificate are valid obligations of
            the Company;

provided, however, that in determining whether the Holders of the requisite
number of the Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any Affiliate of the Company shall be disregarded and deemed not to be
Outstanding Securities, except that, in determining whether the Warrant Agent
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities that a Responsible Officer
of the Warrant Agent knows to be so owned shall be so disregarded. Securities so
owned that have been pledged in good faith may be regarded as Outstanding
Securities if the pledgee establishes to the


                                      -7-
<PAGE>

satisfaction of the Warrant Agent the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company or any Affiliate of the
Company.

            "PAYMENT DATE" means for each year February 17, May 17, August 17,
and November 17, commencing August 17, 2001.

            "PERMITTED INVESTMENTS" has the meaning set forth in Section 1.01 of
the Pledge Agreement.

            "PERSON" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof or any other entity of
whatever nature.

            "PLAN" means an employee benefit plan that is subject to ERISA, a
plan or individual retirement account that is subject to Section 4975 of the
Code or any entity whose assets are considered assets of any such plan.

            "PLEDGE" means the pledge under the Pledge Agreement of the
principal amount of the Notes, the Treasury Securities or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, in each case constituting a part of the
Securities.

            "PLEDGE AGREEMENT" means the Pledge Agreement, dated as of the date
hereof, among the Company, the Collateral Agent, the Securities Intermediary,
the Custodial Agent and the Warrant Agent, on its own behalf and as
attorney-in-fact for the Holders from time to time of the Securities.

            "PLEDGED NOTES" has the meaning set forth in the Pledge Agreement.

            "PREDECESSOR CERTIFICATE" means a Predecessor Equity Units
Certificate or a Predecessor Treasury Equity Units Certificate.

            "PREDECESSOR EQUITY UNITS CERTIFICATE" of any particular Equity
Units Certificate means every previous Equity Units Certificate evidencing all
or a portion of the rights and obligations of the Company and the Holder under
the Equity Units evidenced thereby; and, for the purposes of this definition,
any Equity Units Certificate authenticated and delivered under SECTION 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Equity Units
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Equity Units
Certificate.

            "PREDECESSOR TREASURY EQUITY UNITS CERTIFICATE" of any particular
Treasury Equity Units Certificate means every previous Treasury Equity Units
Certificate evidencing all or a portion of the rights and obligations of the
Company and the Holder under the Treasury Equity Units evidenced thereby; and,
for the purposes of this definition, any Treasury Equity Units Certificate
authenticated and delivered under SECTION 3.10 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Treasury Equity Units Certificate shall be
deemed to evidence


                                      -8-
<PAGE>

the same rights and obligations of the Company and the Holder as the mutilated,
destroyed, lost or stolen Treasury Equity Units Certificate.

            "PREVAILING RATING" with respect to the Notes means:

            (1)   AA/"Aa" if the Notes have a credit rating of AA- or better by
Standard & Poor's Ratings Services and "Aa3" or better by Moody's Investors
Service, Inc. or the equivalent of such ratings by such agencies or a substitute
rating agency or substitute rating agencies selected by the Remarketing Agent
(after consultation with the Company);

            (2)   if not under clause (1) above, then A/"a" if the Notes have a
credit rating of A- or better by Standard & Poor's Rating Services and "A3" or
better by Moody's Investors Service, Inc. or the equivalent of such ratings by
such agencies or a substitute rating agency or substitute rating agencies
selected by the Remarketing Agent (after consultation with the Company);

            (3)   if not under clauses (1) or (2) above, then BBB/"Baa" if the
Notes have a credit rating of BBB- or better by Standard & Poor's Rating
Services and "Baa3" or better by Moody's Investors Service, Inc. or the
equivalent of such ratings by such agencies or a substitute rating agency or
substitute rating agencies selected by the Remarketing Agent (after consultation
with the Company); or

            (4)   if not under clauses (1), (2) or (3) above, then Below
BBB/"Baa."

            Notwithstanding the foregoing, (A) if (i) the credit rating of the
Notes by Standard & Poor's Rating Services shall be on the "Credit Watch" of
Standard & Poor's Rating Services with a designation of "negative implications"
or "developing", or (ii) the credit rating of the Notes by Moody's Investors
Service, Inc. shall be on the "Corporate Credit Watch List" of Moody's Investors
Service, Inc. with a designation of "downgrade" or "uncertain", or, in each
case, on any successor list of Standard & Poor's Rating Services or Moody's
Investors Service, Inc. with a comparable designation, the prevailing ratings of
the Notes shall be deemed to be within a range one full level lower in the above
table than those actually assigned to the Notes by Moody's Investors Service,
Inc. and Standard & Poor's Rating Services and (B) if the Notes are rated by
only one rating agency on or before the Remarketing Date, the prevailing rating
will at all times be determined without reference to the rating of any other
rating agency; provided that if no such rating agency shall have in effect a
rating of the Notes and the Remarketing Agent is unable to identify a substitute
rating agency or rating agencies, the prevailing rating shall be Below
BBB/"Baa."

            "PRIMARY TREASURY DEALER" means a primary U.S. government securities
dealer in New York City.

            "PROCEEDS" has the meaning set forth in Article 1 of the Pledge
Agreement.

            "PURCHASE PRICE" has the meaning set forth in SECTION 5.01.

            "PURCHASED SHARES" has the meaning set forth in SECTION 5.05(A)(6).


                                      -9-
<PAGE>

            "QUOTATION AGENT" means (i) Morgan Stanley & Co. Incorporated and
its respective successors, provided, however, that if the foregoing shall cease
to be a Primary Treasury Dealer, the Company shall substitute therefore another
Primary Treasury Dealer or (ii) any other Primary Treasury Dealer selected by
the Company.

            "RECORD DATE" for the interest payable on any Payment Date means, as
to any Global Certificate, the Business Day next preceding such Payment Date,
and as to any other Certificate, the fifteenth day prior to such Payment Date,
and for all other purposes means such record date that may be established
pursuant to the provisions of SECTION 1.04.

            "REDEMPTION AMOUNT" means, for each Note prior to the Warrant
Settlement Date, the product of (i) the principal amount of such Note and (ii) a
fraction whose numerator is the applicable Treasury Portfolio Purchase Price and
whose denominator is the applicable Tax Event Redemption Amount and means, after
the Warrant Settlement Date the applicable Tax Event Redemption Amount.

            "REDEMPTION PRICE" means the redemption price per Note equal to the
Redemption Amount plus any accrued and unpaid interest on such Note to the date
of redemption.

            "REFERENCE DEALER" means a dealer engaged in trading of convertible
securities.

            "REFERENCE PRICE" has the meaning set forth in SECTION 5.01.

            "REMARKETING AGENT" has the meaning set forth in SECTION 5.02.

            "REMARKETING AGREEMENT" means the Remarketing Agreement, dated as of
the date hereof, among the Company and the Remarketing Agent.

            "REMARKETING MATERIALS" means any materials distributed in
connection with a Remarketing and approved by the Company.

            "REMARKETING FEE" has the meaning set forth in SECTION 5.02.

            "REORGANIZATION EVENT" has the meaning set forth in SECTION 5.05(B).

            "RESET AGENT" means Morgan Stanley & Co. Incorporated or, if Morgan
Stanley & Co. Incorporated is unwilling or unable to act, another nationally
recognized investment banking firm chosen by the Company to determine the Reset
Rate.

            "RESET ANNOUNCEMENT DATE" means, in the case of the Reset Rate to be
determined on the first Initial Remarketing Date on the third Business Day
immediately preceding May 17, 2004, the tenth Business Day immediately preceding
the applicable Reset Effective Date and, in the case of the Reset Rate to be
determined on the Final Remarketing Date, the tenth Business Day immediately
preceding the Warrant Settlement Date, and in the case of the Reset Rate to be
determined on the date of any Additional Remarketing, the third Business Day
immediately preceding the date of any such remarketing.


                                      -10-
<PAGE>

            "RESET EFFECTIVE DATE" means the third Business Day following a
Successful Initial Remarketing or August 17, 2004.

            "RESET RATE" means the interest rate per annum (to be determined by
the Reset Agent), rounded to the nearest one-thousandth (0.001) of one percent
per annum, equal to the sum of (X) the Reset Spread and (Y) the rate of interest
on (1) in the case of the Reset Rate to be determined on the Initial Remarketing
Date, the Benchmark Treasury in effect on the Initial Remarketing Date or (2) in
the case of the Reset Rate to be determined on the Final Remarketing Date, (i)
in the case of a Successful Final Remarketing, the Two-Year Benchmark Treasury
in effect on the Final Remarketing Date, and (ii) in the case of a Failed Final
Remarketing, the Two-Year Benchmark Treasury in effect on the Final Remarketing
Date plus the Applicable Spread; provided, however, that the Reset Rate shall
not exceed the maximum rate permitted by applicable law and provided further
that the Reset Rate shall not be below the initial Coupon Rate.

            "RESET SPREAD" means (a) in the case of the Reset Rate to be
determined on the Initial Remarketing Date after a Successful Initial
Remarketing, a spread amount to be determined by the Reset Agent on the
applicable Reset Announcement Date as the appropriate spread so that the Reset
Rate will be the interest rate that the Notes should bear, in each case, in
order for the Applicable Amount of Notes to have an approximate aggregate market
value of 100.25% of the Treasury Portfolio Purchase Price on the Initial
Remarketing Date, (b) in the case of the Reset Rate to be determined on the
Final Remarketing Date after a Successful Final Remarketing, a spread amount
determined by the Reset Agent on the applicable Reset Announcement Date as the
appropriate spread so that the Reset Rate will be the interest rate that the
Notes should bear in order for the Notes to have an approximate market value of
100.25% of their liquidation amount, or principal amount, as the case may be, on
the Final Remarketing Date, and (c) in the case of the Reset Rate to be
determined on the Final Remarketing Date after a Failed Final Remarketing, the
Applicable Spread.

            "RESPONSIBLE OFFICER" means, with respect to the Warrant Agent, any
officer of the Warrant Agent assigned by the Warrant Agent to administer this
Warrant Agreement.

            "SECURITIES INTERMEDIARY" means The Bank of New York, as Securities
Intermediary under the Pledge Agreement until a successor Securities
Intermediary shall have become such pursuant to the applicable provisions of the
Pledge Agreement, and thereafter "Securities Intermediary" shall mean such
successor.

            "SECURITY" means an Equity Unit or a Treasury Equity Unit, as the
case may be.

            "SECURITY REGISTER" and "SECURITIES REGISTRAR" have the respective
meanings set forth in SECTION 3.05.

            "SETTLEMENT RATE" has the meaning set forth in SECTION 5.01.

            "STATED AMOUNT" means $25.

            "SUCCESSFUL FINAL REMARKETING" has the meaning set forth in SECTION
5.03(B).


                                      -11-
<PAGE>

            "SUCCESSFUL INITIAL REMARKETING" has the meaning set forth in
SECTION 5.02.

            "SUPPLEMENTAL REMARKETING AGREEMENT" means the Supplemental
Remarketing Agreement between the Company and the Warrant Agent in connection
with the remarketing.

            "TAX EVENT" means the receipt by the Company of an opinion of
counsel, rendered by a law firm having a recognized national tax practice, to
the effect that, as a result of any amendment to, change in or announced
proposed in the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official administrative decision, pronouncement, judicial decision or action
interpreting or applying such laws or regulations, which amendment or change is
effective or which proposed change, pronouncement, action or decision is
announced on or after the date of issuance of the Notes, there is more than an
insubstantial increase in the risk that interest payable by the Company on the
Notes is not, or within 90 days of the date of such opinion, will not be,
deductible by the Company, in whole or in part, for United States federal income
tax purposes.

            "TAX EVENT REDEMPTION" means the redemption of the Notes at the
option of the Company upon the occurrence of a Tax Event. Upon such a Tax Event
Redemption occurring prior to the Warrant Settlement Date, the Securities
Intermediary will use the proceeds from the redemption of the Notes to purchase
a portfolio of zero-coupon U.S. Treasury securities that mature one Business Day
prior to the Warrant Settlement Date and on the various dates upon which
payments would have been due on the Notes.

            "TAX EVENT REDEMPTION AMOUNT" means either (i) if the Tax Event
Redemption Date occurs prior to a Successful Initial Remarketing, or, in the
event of a Failed Initial Remarketing, prior to the Warrant Settlement Date, the
aggregate principal amount of the Notes which are components of Equity Units on
the Tax Event Redemption Date or (ii) if the Tax Event Redemption Date occurs on
or after a Successful Initial Remarketing or, in the event of a Failed Initial
Remarketing, on or after the Warrant Settlement Date, the aggregate principal
amount of Notes outstanding on such Tax Event Redemption Date.

            "TAX EVENT REDEMPTION DATE" means the date the Tax Event Redemption
is effected.

            "TERMINATION DATE" means the date, if any, on which a Termination
Event occurs.

            "TERMINATION EVENT" means the occurrence of any of the following
events:

            (i) at any time on or prior to the Warrant Settlement Date, a
      judgment, decree or court order shall have been entered granting relief
      under the Bankruptcy Code, adjudicating the Company to be insolvent, or
      approving as properly filed a petition seeking reorganization or
      liquidation of the Company or any other similar applicable Federal or
      State law, and, unless such judgment, decree or order shall have been
      entered within 60 days prior to the Warrant Settlement Date, such decree
      or order shall have continued undischarged and unstayed for a period of 60
      days;

            (ii) a judgment, decree or court order for the appointment of a
      receiver or liquidator or trustee or assignee in bankruptcy or insolvency
      of the Company or of its


                                      -12-
<PAGE>

      property, or for the termination or liquidation of its affairs, shall have
      been entered, and, unless such judgment, decree or order shall have been
      entered within 60 days prior to the Warrant Settlement Date, such
      judgment, decree or order shall have continued undischarged and unstayed
      for a period of 60 days; or

            (iii) at any time on or prior to the Warrant Settlement Date, the
      Company shall file a petition for relief under the Bankruptcy Code, or
      shall consent to the filing of a bankruptcy proceeding against it, or
      shall file a petition or answer or consent seeking reorganization or
      liquidation under the Bankruptcy Code or any other similar applicable
      Federal or State law, or shall consent to the filing of any such petition,
      or shall consent to the appointment of a receiver or liquidator or trustee
      or assignee in bankruptcy or insolvency of it or of its property, or shall
      make an assignment for the benefit of creditors, or shall admit in writing
      its inability to pay its debts generally as they become due.

            "THRESHOLD APPRECIATION PRICE" has the meaning set forth in SECTION
5.01.

            "TIA" means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation.

            "TRADING DAY" has the meaning set forth in SECTION 5.01.

            "TRANSFER AGENT" shall mean Illinois Stock Transfer Company.

            "TREASURY EQUITY UNIT" means, following the substitution of Treasury
Securities for Notes as collateral to secure a Holder's obligations under the
Warrant, the collective rights and obligations of a Holder of a Treasury Equity
Units Certificate in respect of such Treasury Securities, subject to the Pledge
thereof, and the related Warrant.

            "TREASURY EQUITY UNITS CERTIFICATE" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of Treasury
Equity Units specified on such certificate.

            "TREASURY PORTFOLIO" means (1) in connection with the Initial
Remarketing, a portfolio of zero-coupon U.S. Treasury securities consisting of
(a) principal or interest strips of U.S. Treasury securities that mature on or
prior to August 16, 2004 in an aggregate amount equal to the Applicable Amount
and (b) with respect to the scheduled interest payment date on the Notes that
occurs on the Warrant Settlement Date, principal or interest strips in U.S.
Treasury securities that mature on or prior to such date in an aggregate amount
equal to the aggregate interest payment that would be due on the Applicable
Amount of the Notes on such date if the applicable Coupon Rate on the Notes were
not reset to the Reset Rate as described in Section 4.1 and (2) in connection
with a Tax Event Redemption, (a) if the Tax Event Redemption Date occurs prior
to August 17, 2004 or prior to the date of any Additional Remarketing or, in the
event of a Failed Initial Remarketing, prior to the Warrant Settlement Date, a
portfolio of zero-coupon U.S. Treasury securities consisting of (i) principal or
interest strips of U.S. Treasury securities that mature on or prior to August
16, 2004 in an aggregate amount equal to the applicable Tax Event Redemption
Amount and (ii) with respect to each scheduled interest payment date on the
Notes that occurs after the Tax Event Redemption Date and on or before the


                                      -13-
<PAGE>

Warrant Settlement Date, principal or interest strips of U.S. Treasury
securities that mature on or prior to such date in an aggregate amount equal to
the aggregate interest payment that would be due on the applicable Tax Event
Redemption Amount of the Notes on such date, and (b) if the Tax Event Redemption
Date occurs on or after a Successful Initial Remarketing or, in the event of a
Failed Initial Remarketing, on or after the Warrant Settlement Date, a portfolio
of zero-coupon U.S. Treasury securities consisting of (i) principal or interest
strips of U.S. Treasury securities that mature on or prior to August 16, 2004 in
an aggregate amount equal to the applicable Tax Event Redemption Amount and (ii)
with respect to each scheduled interest payment date on the Notes that occurs
after the Tax Event Redemption Date, principal or interest strips of such U.S.
Treasury securities that mature on or prior to such date in an aggregate amount
equal to the aggregate interest payment that would be due on the applicable Tax
Event Redemption Amount of the Notes on such date.

            "TREASURY PORTFOLIO PURCHASE PRICE" means the lowest aggregate price
quoted by the Primary Treasury Dealer to the Quotation Agent (a) in the case of
a Tax Event Redemption, on the third Business Day immediately preceding the Tax
Event Redemption Date for the purchase of the applicable Treasury Portfolio for
settlement on the Tax Event Redemption Date; and (b) in the case of any
Remarketing on or after the Initial Remarketing, or from time to time
thereafter, the third Business Day immediately following the date of an
Additional Remarketing that is successful for the purchase of the applicable
Treasury Portfolio for settlement on the Warrant Settlement Date.

            "TREASURY SECURITIES" means zero-coupon U.S. Treasury securities
(CUSIP No. 912820 BK 2) which mature on August 16, 2004.

            "TWO-YEAR BENCHMARK TREASURY" means direct obligations of the United
States (which may be obligations traded on a when-issued basis only) having a
maturity comparable to the remaining term to maturity of the Notes, as agreed
upon by the Company and the Remarketing Agent. The rate for the Two-Year
Benchmark Treasury will be the bid side rate displayed at 10:00 a.m., New York
City time, on the Final Remarketing Date in the Telerate system (or if the
Telerate system is (a) no longer available on the Final Remarketing Date or (b)
in the opinion of the Remarketing Agent (after consultation with the Company) no
longer an appropriate system from which to obtain such rate, such other
nationally recognized quotation system as, in the opinion of the Remarketing
Agent (after consultation with the Company) is appropriate). If such rate is not
so displayed, the rate for the Two-Year Benchmark Treasury shall be, as
calculated by the Remarketing Agent, the yield to maturity for the Two-Year
Benchmark Treasury, expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis, and computed by taking
the arithmetic mean of the secondary market bid rates, as of 10:30 a.m., New
York City time, on the Final Remarketing Date of three leading United States
government securities dealers selected by the Remarketing Agent (after
consultation with the Company) (which may include the Remarketing Agent or an
Affiliate thereof).

            "UNDERWRITING AGREEMENT" means, the Underwriting Agreement, dated
June 13, 2001, between the Company and the underwriters identified therein.


                                      -14-
<PAGE>

            "VICE PRESIDENT" means any vice president, whether or not designated
by a number or a word or words added before or after the title "vice president."

            "WARRANT" means, with respect to any Security, the contract forming
a part of such Security and obligating the Company to sell, and the Holder of
such Security to purchase, shares of Common Stock.

            "WARRANT AGENT" means the Person named as the "Warrant Agent" in the
first paragraph of this Agreement until a successor Warrant Agent shall have
become such pursuant to the applicable provisions of this Agreement, and
thereafter "Warrant Agent" shall mean such Person.

            "WARRANT SETTLEMENT DATE" means August 17, 2004.

            "WARRANT SETTLEMENT FUND" has the meaning set forth in SECTION 5.04.

SECTION 1.02.     COMPLIANCE CERTIFICATES AND OPINIONS.

            Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Warrant Agent to take any action in
accordance with any provision of this Agreement, the Company shall furnish to
the Warrant Agent an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Agreement relating to the proposed
action have been complied with and, if requested by the Warrant Agent, 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 Agreement 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 Agreement shall include:

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

            (ii) 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;

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

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


                                      -15-
<PAGE>

            SECTION 1.03.     FORM OF DOCUMENTS DELIVERED TO WARRANT AGENT.

            In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

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

            Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.

            SECTION 1.04.     ACTS OF HOLDERS; RECORD DATES.

            (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by 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 Warrant Agent and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and (subject to SECTION 7.01) conclusive in favor of the Warrant Agent
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 in any manner which the Warrant Agent deems
sufficient.

            (c) The ownership of Securities shall be proved by the Equity Units
Register or the Treasury Equity Units Register, as the case may be.

            (d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Certificate evidencing such
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered


                                      -16-
<PAGE>

to be done by the Warrant Agent or the Company in reliance thereon, whether or
not notation of such action is made upon such Certificate.

            (e) The Company may set any date as a Record Date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any Record Date is set pursuant to this paragraph, the
Holders of the Outstanding Equity Units and the Outstanding Treasury Equity
Units, as the case may be, on such Record Date, and no other Holders, shall be
entitled to take the relevant action with respect to the Equity Units or the
Treasury Equity Units, as the case may be, whether or not such Holders remain
Holders after such Record Date; provided that no such action shall be effective
hereunder unless taken prior to or on the applicable Expiration Date by Holders
of the requisite number of Outstanding Securities on such Record Date. Nothing
contained in this paragraph shall be construed to prevent the Company from
setting a new Record Date for any action for which a Record Date has previously
been set pursuant to this paragraph (whereupon the Record Date previously set
shall automatically and with no action by any Person be cancelled and be of no
effect), and nothing contained in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite number of Outstanding
Securities on the date such action is taken. Promptly after any Record Date is
set pursuant to this paragraph, the Company, at its own expense, shall cause
notice of such Record Date, the proposed action by Holders and the applicable
Expiration Date to be given to the Warrant Agent in writing and to each Holder
of Securities in the manner set forth in SECTION 1.06.

            With respect to any Record Date set pursuant to this Section, the
Company may designate any date as the "EXPIRATION DATE" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Warrant Agent in writing, and to each Holder of Securities in
the manner set forth in SECTION 1.06, prior to or on the existing Expiration
Date. If an Expiration Date is not designated with respect to any Record Date
set pursuant to this Section, the Company shall be deemed to have initially
designated the 180th day after such Record Date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable Record Date.

            SECTION 1.05.     NOTICES.

            Any notice or communication is duly given if in writing and
delivered in Person or mailed by first-class mail (registered or certified,
return receipt requested), telecopier (with receipt confirmed) or overnight air
courier guaranteeing next day delivery, to the others' address; provided that
notice shall be deemed given to the Warrant Agent only upon receipt thereof:


                                      -17-
<PAGE>

                  If to the Warrant Agent:

                            The Chase Manhattan Bank
                            450 West 33rd Street
                            New York, New York 10001
                            Telecopier No.: (212) 946-8159
                            Attention: Institutional Trust Services

                  If to the Company:

                            Citizens Communications Company
                            3 High Ridge Park
                            Stamford, Connecticut 06905
                            Telecopier No.: (203) 614-4651
                            Attention: Secretary & Treasurer

                  If to the Collateral Agent:

                            The Bank of New York
                            Corporate Trust Division
                            101 Barclay Street, 21st Floor West
                            New York, New York 10286
                            Telecopier No.: (212) 815-5915
                            Attention: Corporate Trust Administration
                                   -   Corporate Finance Unit

                  If to the Indenture Trustee:

                            The Chase Manhattan Bank
                            450 West 33rd Street
                            New York, New York 10001
                            Telecopier No.: (212) 946-8159
                            Attention: Institutional Trust Services


            SECTION 1.06.   NOTICE TO HOLDERS; WAIVER.

            Where this Agreement provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at its address as it appears in the applicable 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
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Agreement
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Warrant


                                      -18-
<PAGE>

Agent, but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.

            In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Warrant Agent
shall constitute a sufficient notification for every purpose hereunder.

            SECTION 1.07.   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 1.08.   SUCCESSORS AND ASSIGNS.

            All covenants and agreements in this Agreement by the Company and
the Warrant Agent shall bind their respective successors and assigns, whether so
expressed or not.

            SECTION 1.09.   SEPARABILITY CLAUSE.

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

            SECTION 1.10.   BENEFITS OF AGREEMENT.

            Nothing contained in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
The Holders from time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the Securities
evidenced by their Certificates by their acceptance of delivery of such
Certificates.

            SECTION 1.11.   GOVERNING LAW.

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

            SECTION 1.12.   LEGAL HOLIDAYS.

            In any case where any Warrant Settlement Date or Early Settlement
Date shall not be a Business Day (notwithstanding any other provision of this
Agreement or the Securities), Warrants shall not be performed and Early
Settlement shall not be effected on such date, but Warrants shall be performed
or Early Settlement effected, as applicable, on the next succeeding Business Day
with the same force and effect as if made on such Warrant Settlement Date or
Early Settlement Date, as applicable, provided that no interest shall accrue or
be payable by the Company or to any Holder for the period from and after any
such Warrant Settlement Date or Early Settlement Date, as applicable, except
that, if such next succeeding Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day with
the same force and effect as if made on such Warrant Settlement Date or Early
Settlement Date, as applicable.


                                      -19-
<PAGE>

            SECTION 1.13.   COUNTERPARTS.

            This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.

            SECTION 1.14.   INSPECTION OF AGREEMENT.

            A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder or Beneficial Owner.

            SECTION 1.15.   APPOINTMENT OF FINANCIAL INSTITUTION
                            AS AGENT FOR THE COMPANY.

            The Company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Warrant Agent and
the Holders, under this Agreement and the Warrants, by giving notice of such
appointment in the manner provided in Section 1.05 hereof. Any such appointment
shall not relieve the Company in any way from its obligations hereunder.

            SECTION 1.16.   FEES AND EXPENSES.

            Except to the extent otherwise provided for by SECTION 3.14, the
Company shall pay all fees and expenses related to (1) the retention of the
Collateral Agent and the Securities Intermediary and (2) the enforcement by the
Warrant Agent of the rights of the holders of the Equity Units and Treasury
Equity Units.

                                   ARTICLE 2

                                CERTIFICATE FORMS

            SECTION 2.01.   FORMS OF CERTIFICATES GENERALLY.

            The Certificates (including the form of Warrant forming part of each
Security evidenced thereby) shall be in substantially the form set forth in
EXHIBIT A hereto (in the case of Certificates evidencing Equity Units) or
EXHIBIT B hereto (in the case of Certificates evidencing Treasury Equity Units),
with such letters, numbers or other marks of identification or designation and
such legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Securities are
listed or any depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such Certificates, as
evidenced by their execution of the Certificates but which do not affect the
rights, duties or immunities of the Warrant Agent.

            The definitive Certificates shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers of the Company executing the Securities evidenced
by such Certificates, consistent with the provisions of this Agreement, as
evidenced by their execution thereof.

            Every Global Certificate authenticated, executed on behalf of the
            Holders and delivered hereunder shall bear a legend in substantially
            the following form:


                                      -20-
<PAGE>

            "THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
            WARRANT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
            NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
            "DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS
            EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON
            OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
            CIRCUMSTANCES DESCRIBED IN THE WARRANT AGREEMENT AND NO TRANSFER OF
            THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE 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) MAY BE REGISTERED EXCEPT IN THE LIMITED
            CIRCUMSTANCES DESCRIBED IN THE WARRANT AGREEMENT.

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

            SECTION 2.02.   FORM OF WARRANT AGENT'S CERTIFICATE
                            OF AUTHENTICATION.

            The form of the Warrant Agent's certificate of authentication of the
Securities shall be in substantially the form set forth on the form of the
applicable Certificates.

                                   ARTICLE 3

                                 THE SECURITIES

            SECTION 3.01.   AMOUNT; FORM AND DENOMINATIONS.

            The aggregate number of Securities evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to 18,400,000, except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to SECTION 3.04, 3.05, 3.10, 3.13, 3.14, 5.08 or
8.05.

            The Certificates shall be issuable only in registered form and only
in denominations of a single Equity Unit or Treasury Equity Unit and any
integral multiple thereof.


                                      -21-
<PAGE>

            SECTION 3.02.   RIGHTS AND OBLIGATIONS EVIDENCED BY THE
CERTIFICATES.

            Each Equity Units Certificate shall evidence the number of Equity
Units specified therein, with each such Equity Unit representing (1) the
ownership by the Holder thereof of a beneficial interest in a Note or the
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
subject to the Pledge of such Note or the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, by such Holder pursuant to the Pledge Agreement,
and (2) the rights and obligations of the Holder thereof and the Company under
one Warrant. The Warrant Agent as attorney-in-fact for, and on behalf of, the
Holder of each Equity Unit shall pledge, pursuant to the Pledge Agreement, the
principal portions (and not the interest payments accruing on) each Note or the
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, as the case may be, forming a part of such
Equity Unit, to the Collateral Agent and grant to the Collateral Agent a
security interest in the right, title and interest of such Holder in the
principal portions (and not the interest payments accruing on) each such Note or
the Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, as the case may be, for the benefit of
the Company, to secure the obligation of the Holder under each Warrant to
purchase shares of Common Stock.

            Upon the formation of a Treasury Equity Unit pursuant to SECTION
3.13, each Treasury Equity Units Certificate shall evidence the number of
Treasury Equity Units specified therein, with each such Treasury Equity Unit
representing (1) the ownership by the Holder thereof of a 1/40 undivided
beneficial interest in a Treasury Security with a principal amount at maturity
equal to $1,000, subject to the Pledge of such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (2) the rights and obligations of the
Holder thereof and the Company under one Warrant.

            Prior to the purchase of shares of Common Stock under each Warrant,
such Warrants shall not entitle the Holder of a Security to any of the rights of
a holder of shares of Common Stock, including, without limitation, the right to
vote or receive any dividends or other payments or to consent or to receive
notice as a shareholder in respect of the meetings of shareholders or for the
election of directors of the Company or for any other matter, or any other
rights whatsoever as a shareholder of the Company.

            SECTION 3.03.   EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

            Subject to the provisions of SECTIONS 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Warrant Agent for authentication, execution on behalf of the Holders and
delivery, together with its Issuer Order for authentication of such
Certificates, and the Warrant Agent in accordance with such Issuer Order shall
authenticate, execute on behalf of the Holders and deliver such Certificates.

            The Certificates 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 Certificates may be
manual or facsimile.


                                      -22-
<PAGE>

            Certificates 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 Certificates
or did not hold such offices at the date of such Certificates.

            No Warrant evidenced by a Certificate shall be valid until such
Certificate has been executed on behalf of the Holder by the manual signature of
an authorized signatory of the Warrant Agent, as such Holder's attorney-in-fact.
Such signature by an authorized signatory of the Warrant Agent shall be
conclusive evidence that the Holder of such Certificate has entered into the
Warrants evidenced by such Certificate.

            Each Certificate shall be dated the date of its authentication.

            No Certificate shall be entitled to any benefit under this Agreement
or be valid or obligatory for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by an authorized signatory of the Warrant Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.

            SECTION 3.04.   TEMPORARY CERTIFICATES.

            Pending the preparation of definitive Certificates, the Company
shall execute and deliver to the Warrant Agent, and the Warrant Agent shall
authenticate, execute on behalf of the Holders, and deliver, in lieu of such
definitive Certificates, temporary Certificates which are in substantially the
form set forth in EXHIBIT A or EXHIBIT B hereto, as the case may be, with such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Equity Units or
Treasury Equity Units, as the case may be, are listed, or as may, consistently
herewith, be determined by the officers of the Company executing such
Certificates, as evidenced by their execution of the Certificates but which do
not affect the rights, duties or immunities of the Warrant Agent.

            If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Company shall execute and deliver to the Warrant
Agent, and the Warrant Agent shall authenticate, execute on behalf of the
Holder, and deliver in exchange therefor, one or more definitive Certificates of
like tenor and denominations and evidencing a like number of Securities as the
temporary Certificate or Certificates so surrendered. Until so exchanged, the
temporary Certificates shall in all respects evidence the same benefits and the
same obligations with respect to the Securities, evidenced thereby as definitive
Certificates.


                                      -23-
<PAGE>

            SECTION 3.05.   REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE.

            The Warrant Agent shall keep at the Corporate Trust Office a
register (the "SECURITY REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Warrant Agent shall provide for the
registration of Certificates and of transfers of Certificates (the Warrant
Agent, in such capacity, the "SECURITY REGISTRAR"). The Security Registrar shall
record separately the registration and transfer of the Certificates evidencing
Equity Units and Treasury Equity Units.

            Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the Company shall execute and deliver to the Warrant
Agent, and the Warrant Agent shall authenticate, execute on behalf of the
designated transferee or transferees, and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of any authorized
denominations, like tenor, and evidencing a like number of Equity Units or
Treasury Equity Units, as the case may be.

            At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Equity Units or Treasury Equity Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Warrant Agent, and the Warrant Agent shall authenticate, execute
on behalf of the Holder, and deliver the Certificates which the Holder making
the exchange is entitled to receive.

            All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same number of
Equity Units or Treasury Equity Units, as the case may be, and be entitled to
the same benefits and subject to the same obligations, under this Agreement as
the Equity Units or Treasury Equity Units, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.

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

            No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Warrant Agent may require
payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Certificates, other than any exchanges pursuant to
SECTIONS 3.06 and 8.05 not involving any transfer.

            Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Warrant Agent, and the Warrant Agent shall not be
obligated to authenticate, execute on behalf of the Holder and deliver any
Certificate in exchange for any other Certificate presented or surrendered for
registration of transfer or for exchange on or after the Business Day
immediately preceding the earlier of the Warrant Settlement Date or the
Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of
the applicable conditions specified


                                      -24-
<PAGE>

above in this Section and receipt of appropriate registration or transfer
instructions from such Holder, the Warrant Agent shall:

            (i) if the Warrant Settlement Date has occurred, upon receipt of
      shares of Common Stock from the Company's Transfer Agent, deliver the
      shares of Common Stock issuable in respect of the Warrants forming a part
      of the Securities evidenced by such other Certificate; or

            (ii) if a Termination Event shall have occurred prior to the Warrant
      Settlement Date, transfer the Notes, the Treasury Securities, or the
      appropriate Applicable Ownership Interest of the Treasury Portfolio, as
      the case may be, evidenced thereby, in each case subject to the applicable
      conditions and in accordance with the applicable provisions of ARTICLE 5
      hereof.

            SECTION 3.06.   BOOK-ENTRY INTERESTS.

            The Certificates, on original issuance, will be issued in the form
of one or more fully registered Global Certificates, to be delivered to the
Depositary or its custodian by, or on behalf of, the Company. The Company hereby
designates DTC as the initial Depositary. Such Global Certificates shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive
a definitive Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in SECTION 3.09. If the terms of such
agreement are reasonably acceptable to the Warrant Agent, the Warrant Agent
shall enter into an agreement with the Depositary if so requested by the
Company. Unless and until definitive, fully registered Certificates have been
issued to Beneficial Owners pursuant to SECTION 3.09:

            (i) the provisions of this SECTION 3.06 shall be in full force and
      effect;

            (ii) the Company and the Warrant Agent shall be entitled to deal
      with the Depositary for all purposes of this Agreement (including
      receiving approvals, votes or consents hereunder) as the Holder of the
      Securities and the sole holder of the Global Certificates and shall have
      no obligation to the Beneficial Owners;

            (iii) to the extent that the provisions of this SECTION 3.06
      conflict with any other provisions of this Agreement, the provisions of
      this SECTION 3.06 shall control; and

            (iv) the rights of the Beneficial Owners shall be exercised only
      through the Depositary and shall be limited to those established by law
      and agreements between such Beneficial Owners and the Depositary or the
      Depositary Participants. The Depositary will make book-entry transfers
      among Depositary Participants.

            SECTION 3.07.   NOTICES TO HOLDERS.

            Whenever a notice or other communication to the Holders is required
to be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any
Securities registered in the name of the Depositary or the nominee of the
Depositary, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.


                                      -25-
<PAGE>

            SECTION 3.08.   APPOINTMENT OF SUCCESSOR DEPOSITARY.

            If the Depositary elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Depositary with respect to the Securities.

            SECTION 3.09.   DEFINITIVE CERTIFICATES.

          If:

            (i) the Depositary elects to discontinue its services as securities
      depositary with respect to the Securities and a successor Depositary is
      not appointed within 90 days after such discontinuance pursuant to SECTION
      3.08; or

            (ii) the Company elects after consultation with the Warrant Agent to
      terminate the book-entry system for the Securities, then (x) definitive
      Certificates shall be prepared by the Company with respect to such
      Securities and delivered to the Warrant Agent and (y) upon surrender of
      the Global Certificates representing the Securities by the Depositary,
      accompanied by registration instructions, the Company shall cause
      definitive Certificates to be delivered to Beneficial Owners in accordance
      with the instructions of the Depositary. The Company shall not be liable
      for any delay in delivery of such instructions and may conclusively rely
      on and shall be protected in relying on, such instructions. Each
      definitive Certificate so delivered shall evidence Securities of the same
      kind and tenor as the Global Certificate so surrendered in respect
      thereof.

            SECTION 3.10.   MUTILATED, DESTROYED, LOST AND STOLEN
CERTIFICATES.

            If any mutilated Certificate is surrendered to the Warrant Agent,
the Company shall execute and deliver to the Warrant Agent, and the Warrant
Agent shall authenticate, execute on behalf of the Holder, and deliver in
exchange therefor, a new Certificate, evidencing the same number of Equity Units
or Treasury Equity Units, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.

            If there shall be delivered to the Company and the Warrant Agent (i)
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) such security or indemnity as may be required by them to
hold each of them and any agent of any of them harmless, then, in the absence of
notice to the Company or the Warrant Agent that such Certificate has been
acquired by a "protected" purchaser (as defined in Article 8 of the UCC), the
Company shall execute and deliver to the Warrant Agent, and the Warrant Agent
shall authenticate, execute on behalf of the Holder, and deliver to the Holder,
in lieu of any such destroyed, lost or stolen Certificate, a new Certificate,
evidencing the same number of Equity Units or Treasury Equity Units, as the case
may be, and bearing a Certificate number not contemporaneously outstanding.

            Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Warrant Agent, and the Warrant Agent shall not be
obligated to authenticate, execute on behalf of the Holder, and deliver to the
Holder, a Certificate on or after the Business Day immediately preceding the
earlier of the Warrant Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable conditions
specified


                                      -26-
<PAGE>

above in this Section and receipt of appropriate registration or transfer
instructions from such Holder, the Warrant Agent shall:

                  (1) if the Warrant Settlement Date has occurred, upon receipt
      of shares of Common Stock from the Company's Transfer Agent, deliver the
      shares of Common Stock issuable in respect of the Warrants forming a part
      of the Securities evidenced by such Certificate; or

                  (2) if a Termination Event shall have occurred prior to the
      Warrant Settlement Date, transfer the Notes, the Treasury Securities or
      the appropriate Applicable Ownership Interest (as specified in clause (A)
      of the definition of such term) of the Treasury Portfolio, as the case may
      be, evidenced thereby, in each case subject to the applicable conditions
      and in accordance with the applicable provisions of Article Five hereof.

            Upon the issuance of any new Certificate under this Section, the
Company and the Warrant Agent may require the payment by the Holder 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
Warrant Agent) connected therewith.

            Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered 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 Certificates.

            SECTION 3.11.   PERSONS DEEMED OWNERS.

            Prior to due presentment of a Certificate for registration of
transfer, the Company and the Warrant Agent, and any agent of the Company or the
Warrant Agent, may treat the Person in whose name such Certificate is registered
as the owner of the Security evidenced thereby, for the purpose of receiving
interest on the Treasury Securities, the Notes, or on the maturing quarterly
interest strips of the Treasury Portfolio, as applicable, performance of the
Warrants and for all other purposes whatsoever, whether or not any interest on
the Treasury Securities, the Notes, or Treasury Portfolio, as applicable,
constituting a part of the Security evidenced thereby, shall be overdue and
notwithstanding any notice to the contrary, and neither the Company nor the
Warrant Agent, nor any agent of the Company or the Warrant Agent, shall be
affected by notice to the contrary.

            Notwithstanding the foregoing, with respect to any Global
Certificate, nothing contained herein shall prevent the Company, the Warrant
Agent or any agent of the Company or the Warrant Agent, from giving effect to
any written certification, proxy or other authorization furnished by the
Depositary (or its nominee), as a Holder, with respect to such Global
Certificate


                                      -27-
<PAGE>

or impair, as between such Depositary and the related Beneficial Owner, the
operation of customary practices governing the exercise of rights of the
Depositary (or its nominee) as Holder of such Global Certificate.

            SECTION 3.12.   CANCELLATION.

            All Certificates surrendered for delivery of shares of Common Stock
on or after the Warrant Settlement Date, upon the transfer of Notes, the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of that term) of the Treasury Portfolio or Treasury Securities, as
the case may be, after the occurrence of a Termination Event or pursuant to an
Early Settlement, or upon the registration of transfer or exchange of a
Security, or a Collateral Substitution or the reestablishment of Equity Units
shall, if surrendered to any Person other than the Warrant Agent, be delivered
to the Warrant Agent and, if not already cancelled, shall be promptly cancelled
by it. The Company may at any time deliver to the Warrant Agent for cancellation
any Certificates previously authenticated, executed and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all
Certificates so delivered shall, upon Issuer Order, be promptly cancelled by the
Warrant Agent. No Certificates shall be authenticated, executed on behalf of the
Holder and delivered in lieu of or in exchange for any Certificates cancelled as
provided in this Section, except as expressly permitted by this Agreement. All
cancelled Certificates held by the Warrant Agent shall be disposed of in
accordance with its customary practices.

            If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Warrant Agent
cancelled or for cancellation.

            SECTION 3.13.   CREATION OF TREASURY EQUITY UNITS BY SUBSTITUTION
                            OF TREASURY SECURITIES.

            Subject to the conditions set forth in this Agreement, a Holder may
separate the Notes, as applicable, from the related Warrants in respect of such
Holder's Equity Units by substituting for such Notes, as the case may be,
Treasury Securities in an aggregate principal amount equal to the aggregate
principal amount of such Notes, as applicable (a "COLLATERAL SUBSTITUTION"), at
any time from and after the date of this Agreement and prior to or on the fifth
Business Day immediately preceding the Warrant Settlement Date. To effect such
substitution, the Holder must:

            (i) deposit with the Securities Intermediary Treasury Securities
      having an aggregate amount at maturity equal to the aggregate principal
      amount of the Notes; and

            (ii) transfer the related Equity Units to the Warrant Agent
      accompanied by a notice to the Warrant Agent, substantially in the form of
      Exhibit C hereto, (i) stating that the Holder has transferred the relevant
      amount of Treasury Securities to the Securities Intermediary and (ii)
      requesting that the Warrant Agent instruct the Collateral Agent to release
      the Notes underlying such Equity Units, whereupon the Warrant Agent shall
      promptly provide an instruction to such effect to the Collateral Agent,
      substantially in the form of Exhibit A to the Pledge Agreement.


                                      -28-
<PAGE>

            Upon receipt of the Treasury Securities described in clause (i)
above and the instruction described in clause (ii) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will cause the release of
such Notes from the Pledge, free and clear of the Company's security interest
therein, and the transfer of such Notes to the Warrant Agent on behalf of the
Holder. Upon receipt thereof, the Warrant Agent shall promptly:

            (i)   cancel the related Equity Units;

            (ii)  transfer the Notes, as the case may be, to the Holder; and

            (iii) authenticate, execute on behalf of such Holder and deliver a
      Treasury Equity Units Certificate executed by the Company in accordance
      with SECTION 3.03 evidencing the same number of Warrants as were evidenced
      by the cancelled Equity Units.

            Holders who elect to separate the Notes from the related Warrants
and to substitute Treasury Securities for such Notes, as the case may be, shall
be responsible for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.

            Holders may make Collateral Substitutions (i) only in integral
multiples of 40 Equity Units. If a Tax Event Redemption or a Successful Initial
Remarketing has occurred, Holders may no longer convert their Equity Units into
Treasury Equity Units.

            In the event a Holder making a Collateral Substitution pursuant to
this SECTION 3.13 fails to effect a book-entry transfer of the Equity Units or
fails to deliver Equity Units Certificates to the Warrant Agent after depositing
Treasury Securities with the Collateral Agent, any distributions on the Notes
constituting a part of such Equity Units, as the case may be, shall be held in
the name of the Warrant Agent or its nominee in trust for the benefit of such
Holder, until such Equity Units are so transferred or the Equity Units
Certificate is so delivered, as the case may be, or, such Holder provides
evidence satisfactory to the Company and the Warrant Agent that such Equity
Units Certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Warrant Agent and the Company.

            Except as described in this SECTION 3.13 and except as necessary to
effect the Pledge, for so long as the Warrant underlying an Equity Unit remains
in effect, such Equity Unit shall not be separable into its constituent parts,
and the rights and obligations of the Holder in respect of the Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, and the Warrant comprising such Equity Unit may be acquired, and may be
transferred and exchanged, only as an Equity Unit.

            SECTION 3.14.   REESTABLISHMENT OF EQUITY UNITS.

            Subject to the conditions set forth in this Agreement, a Holder of
Treasury Equity Units may reestablish Equity Units at any time prior to or on
the seventh Business Day immediately preceding the Warrant Settlement Date,
unless a Tax Event Redemption or a Successful Initial Remarketing has occurred,
by:


                                      -29-
<PAGE>

            (i) depositing with the Collateral Agent Notes having an aggregate
      principal amount equal to the aggregate principal amount at maturity of
      the Treasury Securities comprising part of the Treasury Equity Units; and

            (ii) transferring the related Treasury Equity Units to the Warrant
      Agent accompanied by a notice to the Warrant Agent, substantially in the
      form of Exhibit C hereto, (a) stating that the Holder has transferred the
      relevant amount of Notes to the Collateral Agent and (b) requesting that
      the Warrant Agent instruct the Collateral Agent to release the Treasury
      Securities underlying such Treasury Equity Units, whereupon the Warrant
      Agent shall promptly provide an instruction to such effect to the
      Collateral Agent, substantially in the form of Exhibit C to the Pledge
      Agreement.

Upon receipt of the Notes described in clause (i) above and the instruction
described in clause (ii) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will cause the Securities Intermediary to effect
the release of the Treasury Securities having a corresponding aggregate
principal amount at maturity from the Pledge, free and clear of the Company's
security interest therein, and the transfer to the Warrant Agent on behalf of
the Holder. Upon receipt thereof, the Warrant Agent shall promptly:

            (i) cancel the related Treasury Equity Units;

            (ii) transfer the Treasury Securities to the Holder; and

            (iii) authenticate, execute on behalf of such Holder and deliver an
      Equity Units Certificate executed by the Company in accordance with
      Section 3.03 evidencing the same number of Equity Units as were evidenced
      by the cancelled Treasury Equity Units.

            Holders who elect to re-establish Equity Units shall be responsible
for any fees or expenses payable to the Collateral Agent for its services as
Collateral Agent in respect of the reestablishment, and the Company shall not be
responsible for any such fees or expenses.

            Holders of Treasury Equity Units may only re-establish Equity Units
in integral multiples of 40 Treasury Equity Units and only if a Tax Event
Redemption or a Successful Initial Remarketing has not occurred.

            In the event a Holder re-establishing Equity Units pursuant to this
SECTION 3.14 fails to effect a book-entry transfer of the Treasury Equity Units
or fails to deliver a Equity Certificate to the Warrant Agent after depositing
the Notes with the Collateral Agent, the Treasury Equity Securities constituting
a part of such Treasury Equity Units shall be held in the name of the Warrant
Agent or its nominee in trust for the benefit of such Holder, until such
Treasury Equity Units are so transferred or the Equity Certificate is so
delivered, as the case may be, or, with respect to a Certificate for Treasury
Equity Units, such Holder provides evidence satisfactory to the Company and the
Warrant Agent that such Certificate has been destroyed, lost or stolen, together
with any indemnity that may be required by the Agent and the Company.

            Except as provided in this SECTION 3.14 and except as necessary to
effect the Pledge, for so long as the Warrant underlying a Treasury Equity Unit
remains in effect, such Treasury Equity Unit shall not be separable into its
constituent parts and the rights and


                                      -30-
<PAGE>

obligations of the Holder of such Treasury Equity Unit in respect of the 1/40 of
a Treasury Security and the Warrant comprising such Treasury Equity Unit may be
acquired, and may be transferred and exchanged, only as a Treasury Equity Unit.

            SECTION 3.15.   TRANSFER OF COLLATERAL UPON OCCURRENCE OF
                            TERMINATION EVENT.

            Upon the occurrence of a Termination Event and the transfer to the
Warrant Agent of the Notes, the appropriate Applicable Ownership Interest of the
Treasury Portfolio or the Treasury Securities, as the case may be, underlying
the Equity Units and the Treasury Equity Units, as the case may be, pursuant to
the terms of the Pledge Agreement, the Warrant Agent shall request transfer
instructions with respect to such Notes, the appropriate Applicable Ownership
Interest of the Treasury Portfolio or Treasury Securities, as the case may be,
from each Holder by written request, substantially in the form of EXHIBIT D
hereto, mailed to such Holder at its address as it appears in the Security
Register.

            Upon book-entry transfer of the Equity Units or the Treasury Equity
Units or delivery of an Equity Units Certificate or Treasury Equity Units
Certificate to the Warrant Agent with such transfer instructions, the Warrant
Agent shall transfer the Notes, the appropriate Applicable Ownership Interest of
the Treasury Portfolio or Treasury Securities, as the case may be, underlying
such Equity Units or Treasury Equity Units, as the case may be, to such Holder
by book-entry transfer, or other appropriate procedures, in accordance with such
instructions; provided, however, that, to the extent that a Holder of Equity
Units or Treasury Equity Units would otherwise be entitled to receive less than
$1,000 principal amount at maturity of the Treasury Portfolio or the Treasury
Securities, the Warrant Agent shall dispose of such securities for cash using a
customary method (and shall have no liability relating to the amount of cash so
received, unless any deficiency in the amount of such cash arose from the gross
negligence, willful misconduct or bad faith of the Warrant Agent), and transfer
the appropriate amount of such cash to such Holder in accordance with such
Holder's instructions. In the event a Holder of Equity Units or Treasury Equity
Units fails to effect such transfer or delivery, the Notes, the appropriate
Applicable Ownership Interest of the Treasury Portfolio or Treasury Securities,
as the case may be, underlying such Equity Units or Treasury Equity Units, as
the case may be, and any distributions thereon, shall be held in the name of the
Warrant Agent or its nominee in trust for the benefit of such Holder, until the
earlier to occur of:

            (i) the transfer of such Equity Units or Treasury Equity Units or
      surrender of the Equity Units Certificate or Treasury Equity Units
      Certificate or receipt by the Company and the Warrant Agent from such
      Holder of satisfactory evidence that such Equity Units Certificate or
      Treasury Equity Units Certificate has been destroyed, lost or stolen,
      together with any indemnity that may be required by the Warrant Agent and
      the Company; and

            (ii) the expiration of the time period specified in the abandoned
      property laws of the relevant State.


                                      -31-
<PAGE>

            SECTION 3.16.   NO CONSENT TO ASSUMPTION.

            Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Warrant by the Company or its trustee,
receiver, liquidator or a person or entity performing similar functions in the
event that the Company becomes the debtor under the Bankruptcy Code or subject
to other similar state or Federal law providing for reorganization or
liquidation.

            SECTION 3.17.   CUSIP NUMBERS.

            The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Warrant Agent 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 Warrant Agent of any changes in the "CUSIP" numbers.

                                   ARTICLE 4
                   THE NOTES AND APPLICABLE OWNERSHIP INTEREST
                            OF THE TREASURY PORTFOLIO

            SECTION 4.01.   INTEREST PAYMENTS; RIGHTS TO INTEREST PAYMENTS
                            PRESERVED.

            Any interest payment on any Note or on the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, which is paid
on any Payment Date shall, subject to receipt thereof by the Warrant Agent from
the paying agent as provided in the Indenture or the Collateral Agent as
provided by the terms of the Pledge Agreement, be paid to the Person in whose
name the Equity Units Certificate (or one or more Predecessor Equity Units
Certificates) of which such Note or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, is registered at the
close of business on the Record Date for such Payment Date; provided, however,
that if any such payment is received on a day that is not a Business Day or
after 11:00 a.m. (New York City time) on a Business Day, then the Warrant Agent
shall use all commercially reasonable efforts to deliver any such payment not
later than 10:30 a.m. (New York City time) on the next succeeding Business Day.

            Each Equity Units Certificate evidencing Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio delivered under this
Agreement upon registration of transfer of or in exchange for or in lieu of any
other Equity Units Certificate shall carry the right to interest accrued and
unpaid, and to accrue interest, which were carried by the Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio underlying
such other Equity Units Certificate.

            In the case of any Equity Units with respect to which Cash
Settlement of the underlying Warrant is properly effected pursuant to SECTION
5.03 hereof, or with respect to which Early Settlement of the underlying Warrant
is properly effected pursuant to SECTION 5.08 hereof, or with respect to which a
Collateral Substitution is effected, in each case on a date that is after


                                      -32-
<PAGE>

any Record Date and prior to or on the next succeeding Payment Date,
distributions on the Notes or on the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, underlying such Equity Unit
otherwise payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement or Early Settlement or Collateral
Substitution, and such distributions shall, subject to receipt thereof by the
Warrant Agent, be payable to the Person in whose name the Equity Units
Certificate (or one or more Predecessor Equity Units Certificates) was
registered at the close of business on the Record Date. Except as otherwise
expressly provided in the immediately preceding sentence, in the case of any
Equity Unit with respect to which Cash Settlement or Early Settlement of the
underlying Warrant is properly effected, or with respect to which a Collateral
Substitution has been effected, distributions on the related Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, that would otherwise be payable after the Warrant Settlement Date or
Early Settlement Date or Collateral Substitution shall not be payable hereunder
to the Holder of such Equity Units; provided, however, that to the extent that
such Holder continues to hold separated Notes that formerly comprised a part of
such Holder's Equity Unit, such Holder shall be entitled to receive
distributions on such separated Notes.

            The applicable Coupon Rate on the Notes on and after May 17, 2004
will be reset in the case of a Successful Initial Remarketing or a Successful
Final Remarketing to the applicable Reset Rate (such Reset Rate to be in effect
on and after the applicable Reset Effective Date), provided that the Reset Rate
will not be below 6 3/4%. In the event of a Failed Final Remarketing, the
applicable Coupon Rate on the Notes outstanding on and after the Warrant
Settlement Date will be reset on the Warrant Settlement Date to the Reset Rate
that will be equal to the Two-Year Benchmark Treasury plus the Applicable
Spread, provided that the Reset Rate will not be below 6 3/4%. On the applicable
Reset Announcement Date the Reset Spread and the Two-Year Benchmark Treasury or
Benchmark Treasury, as applicable, to be used to determine the Reset Rate will
be announced by the Company, such announcement to be made by a customary method,
as determined by the Company. On the Business Day immediately following the
Reset Announcement Date, the holders of the Notes will be notified of such Reset
Spread and Two-Year Benchmark Treasury or Benchmark Treasury, as applicable, by
the Company. Such notice shall be sufficiently given to holders of the Notes if
published in an Authorized Newspaper.

            In the case of (i) the first Initial Remarketing on the third
Business Day prior to May 17, 2004 or the Final Remarketing, no later than 7
calendar days nor more than 15 calendar days prior to the Reset Announcement
Date, and in the case of (ii) any Additional Remarketing, as soon as practical
after the Company has been notified of an Additional Remarketing by the
Remarketing Agent, the Company will request the Depositary or its nominee by
first-class mail, postage prepaid, to notify the Beneficial Owners or
Participants holding Equity Units or Treasury Equity Units of such Reset
Announcement Date and, in the case of a Final Remarketing, the procedures to be
followed by Holders of Equity Units who intend to effect a Cash Settlement on
the fourth Business Day immediately preceding the Warrant Settlement Date.

            SECTION 4.02.   NOTICE AND VOTING.

            Under the terms of the Pledge Agreement, the Warrant Agent will be
entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Notes, but only to


                                      -33-
<PAGE>

the extent instructed in writing by the Holders as described below. Upon receipt
of notice of any meeting at which holders of Notes are entitled to vote or upon
any solicitation of consents, waivers or proxies of holders of Notes, the
Warrant Agent shall, as soon as practicable thereafter, mail, first class,
postage pre-paid, to the Holders of Equity Units a notice:

            (i) containing such information as is contained in the notice or
      solicitation;

            (ii) stating that each Holder on the Record Date set by the Warrant
      Agent therefor (which, to the extent possible, shall be the same date as
      the Record Date for determining the holders of Notes entitled to vote)
      shall be entitled to instruct the Warrant Agent as to the exercise of the
      voting rights pertaining to such Notes underlying their Equity Units; and

            (iii) stating the manner in which such instructions may be given.

Upon the written request of the Holders of Equity Units on such Record Date
received by the Warrant Agent at least six days prior to such meeting, the
Warrant Agent shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such requests, the
maximum number of Notes as to which any particular voting instructions are
received. In the absence of specific instructions from the Holder of an Equity
Unit, the Warrant Agent shall abstain from voting the Notes underlying such
Equity Unit. The Company hereby agrees, if applicable, to solicit Holders of
Equity Units to timely instruct the Warrant Agent in order to enable the Warrant
Agent to vote such Notes.

            SECTION 4.03.   TAX EVENT REDEMPTION.

            Upon the occurrence of a Tax Event Redemption prior to a Successful
Initial Remarketing, or in the event of a Failed Initial Remarketing, prior to
the Warrant Settlement Date, the Redemption Price payable on such date with
respect to the Applicable Amount shall be deposited in the Collateral Account in
exchange for the Pledged Notes. Thereafter, pursuant to the terms of the Pledge
Agreement, the Collateral Agent shall cause the Securities Intermediary to apply
an amount equal to the Redemption Amount of such Redemption Price to purchase on
behalf of the Holders of Equity Units the Treasury Portfolio and promptly remit
the remaining portion of such Redemption Price to the Warrant Agent for payment
to the Holders of such Equity Units. The Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio will be substituted as Collateral for the Pledged Notes and will be
held by the Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligation of each Holder of an Equity Unit to purchase
the Common Stock of the Company under the Warrant constituting a part of such
Equity Unit. Following the occurrence of a Tax Event Redemption prior to a
Successful Initial Remarketing, the Holders of Equity Units and the Collateral
Agent shall have such security interest rights and obligations with respect to
the Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio as the Holders of Equity Units and the
Collateral Agent had in respect of the Notes subject to the Pledge thereof as
provided in the Pledge Agreement, and any reference herein to the Notes shall be
deemed to be reference to such Treasury Portfolio.


                                      -34-
<PAGE>

                                    ARTICLE 5
                                  THE WARRANTS

            SECTION 5.01.   PURCHASE OF SHARES OF COMMON STOCK.

            Each Warrant shall, unless a Cash Settlement has occurred in
accordance with SECTION 5.03 hereof or an Early Settlement has occurred in
accordance with SECTION 5.09 hereof, obligate the Holder of the related Security
to purchase, and the Company to sell, on the Warrant Settlement Date at a price
equal to the Stated Amount (the "PURCHASE PRICE"), a number of shares of Common
Stock (subject to SECTION 5.10) equal to the Settlement Rate unless, prior to or
on the Warrant Settlement Date, there shall have occurred a Termination Event
with respect to the Security of which such Warrant is a part. The "SETTLEMENT
Rate" is equal to:

            (i) if the Applicable Market Value (as defined below) is greater
      than or equal to $14.52 (the "THRESHOLD APPRECIATION PRICE"), 1.7218
      shares of Common Stock per Warrant;

            (ii) if the Applicable Market Value is less than the Threshold
      Appreciation Price but greater than $12.10 (the "REFERENCE PRICE"), the
      number of shares of Common Stock per Warrant having a value, based on the
      Applicable Market Value, equal to the Stated Amount; and

            (iii) if the Applicable Market Value is less than or equal to the
      Reference Price, 2.0661 shares of Common Stock per Warrant, in each case
      subject to adjustment as provided in Section 5.06 (and in each case
      rounded upward or downward to the nearest 1/10,000th of a share).

            The "APPLICABLE MARKET VALUE" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Warrant Settlement Date.

            The "CLOSING PRICE" per share of Common Stock on any date of
determination means:

            (i) the closing sale price as of the 4:15 p.m. close of trading (or,
      if no closing price is reported, the last reported sale price) per share
      on the NYSE on such date;

            (ii) if the Common Stock is not listed for trading on the NYSE on
      any such date, the closing sale price per share as reported in the
      composite transactions for the principal United States securities exchange
      on which the Common Stock is so listed;

            (iii) if the Common Stock is not so listed on a United States
      national or regional securities exchange, the closing sale price per share
      as reported by The NASDAQ National Market;

            (iv) if the Common Stock is not so reported, the last quoted bid
      price for the Common Stock in the over-the-counter market as reported by
      the National Quotation Bureau or similar organization; or


                                      -35-
<PAGE>

            (v) if such bid price is not available, the average of the mid-point
      of the last bid and ask prices of the Common Stock on such date from at
      least three nationally recognized independent investment banking firms
      retained for this purpose by the Company.

            A "TRADING DAY" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.

            Each Holder of an Equity Unit or a Treasury Equity Unit, by its
acceptance thereof:

            (i) irrevocably authorizes the Warrant Agent to enter into and
      perform the Holder's obligations under the related Warrant and Pledge
      Agreement on its behalf as its attorney-in-fact (including the execution
      of Certificates on behalf of such Holder);

            (ii) agrees to be bound by the terms and provisions of the related
      Warrant Agreement;

            (iii) agrees to be bound by the pledge arrangements contained in the
      related Pledge Agreement; and

            (iv) consents to, and agrees to treat itself as the owner of the
      related Note, Treasury Securities or the Applicable Ownership Interest (as
      specified in clause (A) of the definition of such term) of the Treasury
      Portfolio, as the case may be, and to treat the Note as indebtedness and
      the Warrant as a forward purchase contract for the common stock of the
      Company for United States Federal, state and local income and franchise
      tax purposes.

provided that upon a Termination Event, the rights of the Holder of such
Security under the Warrant may be enforced without regard to any other rights or
obligations. Each Holder of an Equity Unit or a Treasury Equity Unit, by its
acceptance thereof, further covenants and agrees, that to the extent and in the
manner provided in SECTION 5.03 and the Pledge Agreement, but subject to the
terms thereof, payments in respect of the Notes, only in the case of a Failed
Remarketing, or the proceeds from the Treasury Securities or the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio at maturity on the Warrant Settlement Date, as the
case may be, shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Warrant and such Holder
shall acquire no right, title or interest in such payments.

            Upon registration of transfer of a Certificate, the transferee shall
be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Warrants underlying such
Certificate, the Pledge Agreement and the transferor shall be released from the
obligations under this Agreement, the Warrants underlying the Certificate so
transferred and the Pledge Agreement. The Company covenants and agrees, and


                                      -36-
<PAGE>

each Holder of a Certificate, by its acceptance thereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.

            SECTION 5.02.   INITIAL AND ADDITIONAL REMARKETING.

            Unless a Tax Event Redemption has occurred, the Company shall engage
a nationally recognized investment bank (the "REMARKETING AGENT") pursuant to
the Remarketing Agreement to sell the Notes of the Equity Unit Holders on the
third Business Day immediately preceding May 17, 2004, and, in the event of a
failed attempt to remarket on such date, the Remarketing Agent shall use its
reasonable efforts in its discretion to remarket all of the Notes from time to
time thereafter prior to the tenth Business Day preceding the Warrant Settlement
Date (each such additional remarketing being referred to as an "ADDITIONAL
Remarketing" and, any such Additional Remarketing and the first Remarketing on
the third Business Day preceding May 17, 2004 being referred to as an "INITIAL
REMARKETING", and each date on which an Initial Remarketing takes place being
referred to as an "INITIAL REMARKETING DATE"). In order to facilitate the
remarketing, upon written request by the Company made two Business Days prior
thereto, the Warrant Agent shall notify, by 11:00 a.m., New York City time, on
the Business Day immediately preceding any Initial Remarketing Date, the
Remarketing Agent and the Company, as the case may be, of the aggregate
principal amount of Notes which constitute part of the Equity Units to be
remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement will present for remarketing such Notes to the Remarketing
Agent. Upon receipt of the notice from the Warrant Agent and such Notes from the
Collateral Agent, the Remarketing Agent will, on any Initial Remarketing Date,
use its reasonable efforts to remarket such Notes on such date at a price of
approximately 100.25% (but not less than 100%) of the Treasury Portfolio. If the
Remarketing Agent is able to remarket the Notes at a price equal to or greater
than 100% of the Treasury Portfolio (a "SUCCESSFUL INITIAL REMARKETING"), the
portion of the proceeds from such Successful Initial Remarketing equal to the
Treasury Portfolio will be applied to purchase the Treasury Portfolio in
accordance with Section 7.4 of the Pledge Agreement. In addition, the
Remarketing Agent may deduct as a remarketing fee ("REMARKETING FEE") an amount
not exceeding 25 basis points (0.25%) of the Treasury Portfolio from any amount
of such proceeds in excess of the Treasury Portfolio. Any proceeds in excess of
those required to pay the Remarketing Fee will be remitted to the Warrant Agent
for a prompt payment to the Holders of the related Equity Units to be made on a
pro rata basis. Equity Units Holders whose Notes are so remarketed will not
otherwise be responsible for the payment of any Remarketing Fee in connection
therewith. The Applicable Ownership Interest in the Treasury Portfolio will be
substituted for the Notes of Equity Unit Holders and will be pledged to the
Collateral Agent to secure the Equity Unit Holders' obligation to pay the
Purchase Price for the Common Stock under the related Warrants on the Warrant
Settlement Date. Following the occurrence of a Successful Initial Remarketing,
the Holders of Equity Units and the Collateral Agent shall have such security
interests, rights and obligations with respect to the Treasury Portfolio as the
Holder of Equity Units and the Collateral Agent had in respect of the Notes
subject to the Pledge thereof as provided in the Pledge Agreement, and any
reference herein to the Notes shall be deemed to be a reference to such Treasury
Portfolio and any reference herein to interest on the Notes shall be deemed to
be a reference to corresponding distributions on the Treasury Portfolio. The
Company may cause to be made in any Equity Units Certificates thereafter to be
issued such change in phraseology and form (but not in substance) as may be
appropriate to reflect the substitution of the Treasury Portfolio for Notes as
collateral.


                                      -37-
<PAGE>

            If, (i) in spite of using its reasonable efforts, the Remarketing
Agent cannot remarket the related Notes (other than to the Company) of such
Holders of Equity Units at a price not less than 100% of the Treasury Portfolio
Purchase Price, or (ii) the remarketing has not occurred because a condition
precedent to the remarketing has not been fulfilled, the remarketing will be
deemed to have failed (a "FAILED INITIAL REMARKETING"). The Company will cause a
notice of a Failed Initial Remarketing to be published on the Business Day
immediately succeeding any Initial Remarketing Date in the Authorized Newspaper.

            Holders of the Securities shall be hereby deemed to agree that the
obligations of the Remarketing Agent and the Reset Agent under the Remarketing
Agreement and the related Supplemental Remarketing Agreement are subject to
satisfaction of conditions set forth in or incorporated by reference into any
such agreement.

            Instead of participating in the first Initial Remarketing on the
third Business Day immediately preceding May 17, 2004, the Holders of Equity
Units can deliver the Applicable Ownership Interest in the Treasury Portfolio to
the Remarketing Agent on or prior to the fifth Business Day prior to such
Remarketing as further described in Section 7.4 of the Pledge Agreement. In
addition, instead of participating in an Additional Remarketing, the Holders of
Equity Units can deliver the Applicable Ownership Interest in the Treasury
Portfolio to the Remarketing Agent on the second Business Day prior to any
Additional Remarketing as further described in Section 7.4 of the Pledge
Agreement.

            To effect a collateral substitution in connection with the Treasury
Portfolio, a Holder shall give a notice to the Warrant Agent, substantially in
the form of Exhibit H to the Pledge Agreement, stating that the Holder has
transferred the Applicable Ownership Interest in the Treasury Portfolio in
respect of their Equity Units to the Remarketing Agent, on or prior to 11:00
a.m., New York City time, on the second Business Day immediately preceding the
date of any Additional Remarketing, and requesting that the Warrant Agent
instruct the Collateral Agent to release the Notes underlying such Equity Units,
whereupon the Warrant Agent shall give such instruction to the Collateral Agent
substantially in the form of Exhibit J to the Pledge Agreement. If a Holder
fails to deliver the Applicable Ownership Interest in Treasury Portfolio Cash
Payment on or prior to 11:00 a.m., New York City time, on the fifth Business Day
prior to May 17, 2004, or on or prior to 11:00 a.m., New York City time, on the
second Business Day immediately preceding the date of any Additional
Remarketing, such Holder will be deemed to have consented to the remarketing and
such Holder's Notes will be remarketed by the Remarketing Agent.

            In the event of a Collateral substitution as described in this
SECTION 5.02, the Notes shall be released to the Warrant Agent who shall deliver
the Pledged Securities to the Holder upon satisfaction of the conditions
precedent described in this SECTION 5.02. The date of such release shall not be
prior to the applicable Reset Effective Date.

            SECTION 5.03.   PAYMENT OF PURCHASE PRICE; FINAL REMARKETING.

            (a) (i) Unless a Tax Event Redemption, Successful Initial
Remarketing or Termination Event has occurred or a Holder of an Equity Unit
effects an Early Settlement of the underlying Warrant in the manner described in
SECTION 5.09, each Holder who intends to pay in cash to satisfy such Holder's
obligations under the Warrant shall notify the Warrant Agent by use


                                      -38-
<PAGE>

of a notice in substantially the form of EXHIBIT E hereto of his intention to
pay in cash ("CASH SETTLEMENT") the Purchase Price for the shares of Common
Stock to be purchased pursuant to the related Warrant. Such notice shall be
given prior to 5:00 p.m. (New York City time) on the fourth Business Day
immediately preceding the Warrant Settlement Date. Prior to 5:00 p.m. (New York
City time) on the next succeeding Business Day, the Warrant Agent shall notify
the Collateral Agent and the Indenture Trustee of the receipt of such notices
from Holders intending to make a Cash Settlement.

            (ii) A Holder of an Equity Unit who has so notified the Warrant
      Agent of his intention to effect a Cash Settlement in accordance with
      SECTION 5.03(A)(I) above shall pay the Purchase Price to the Securities
      Intermediary for deposit in the Collateral Account prior to 5:00 p.m. (New
      York City time) on the fourth Business Day immediately preceding the
      Warrant Settlement Date, in lawful money of the United States by certified
      or cashiers' check or wire transfer, in each case in immediately available
      funds payable to or upon the order of the Securities Intermediary. Any
      cash received by the Collateral Agent shall be invested promptly by the
      Securities Intermediary in Permitted Investments and paid to the Company
      on the Warrant Settlement Date in settlement of the Warrants in accordance
      with the terms of this Agreement and the Pledge Agreement. Any funds
      received by the Securities Intermediary in respect of the investment
      earnings from such Permitted Investments in excess of the Purchase Price
      for the shares of Common Stock to be purchased by such Holder shall be
      distributed to the Warrant Agent when received for payment to the Holder.

            (iii) If a Holder of an Equity Unit fails to notify the Warrant
      Agent of his intention to make a Cash Settlement in accordance with
      SECTION 5.03(A)(I) above, or has notified the Warrant Agent but fails to
      pay the Purchase Price to the Securities Intermediary in accordance with
      SECTION 5.03(A)(II) above, such Holder shall be deemed to have consented
      to the disposition of the Pledged Notes pursuant to the Remarketing as
      described in SECTION 5.03(B) below.

            (b)   Unless a Tax Event Redemption or a Successful Initial
Remarketing has occurred, the Notes of Equity Unit Holders who have not notified
the Warrant Agent of their intention to effect a Cash Settlement as provided in
PARAGRAPH (A)(I) above or have failed to pay the Purchase Price to the
Securities Intermediary in accordance with PARAGRAPH 5.03 (A)(II) above will be
sold by the Remarketing Agent (the "FINAL REMARKETING") on the third Business
Day immediately preceding the Warrant Settlement Date (the "FINAL REMARKETING
DATE"). The Warrant Agent, upon written request by the Company made two Business
Days prior thereto, shall notify, by 11:00 a.m., New York City time, on the
Business Day immediately preceding the Final Remarketing Date, the Remarketing
Agent, the Collateral Agent, the Indenture Trustee and the Company of the
aggregate principal amount of Notes that are part of Equity Units to be
remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement, will present for remarketing such Notes to the Remarketing
Agent. Upon receipt of such notice from the Collateral Agent and such Notes from
the Collateral Agent, the Remarketing Agent will, on the Final Remarketing Date,
use its reasonable efforts to remarket such Notes on such date at a price of
approximately 100.25% (but not less than 100%) of the aggregate principal amount
of Notes. If the Remarketing Agent is able to remarket the Notes at a price
equal to or greater than 100% of the aggregate principal amount of the Notes (a
"SUCCESSFUL FINAL


                                      -39-
<PAGE>

REMARKETING"), the Remarketing Agent will remit the entire amount of the
proceeds from such Successful Final Remarketing to the Collateral Agent;
provided, however, that the Remarketing Agent may deduct as the Remarketing Fee
an amount not exceeding 25 basis points (0.25%) of the aggregate principal
amount of the remarketed Notes from any amount of the proceeds of a Successful
Final Remarketing in excess of the aggregate principal amount of the remarketed
Notes. The portion of the proceeds equal to the aggregate principal amount of
Notes will automatically be applied by the Collateral Agent, in accordance with
the Pledge Agreement, to satisfy in full such Equity Units Holders' obligations
to pay the Purchase Price for the Common Stock under the related Warrants on the
Warrant Settlement Date. Any proceeds in excess of those required to pay the
Purchase Price and the Remarketing Fee will be remitted to the Warrant Agent for
payment to the Holders of the related Equity Units. Equity Units Holders whose
Notes are so remarketed will not otherwise be responsible for the payment of any
Remarketing Fee in connection therewith. If, (i) in spite of using its
reasonable efforts, the Remarketing Agent cannot remarket the related Notes
(other than to the Company) of such Holders of Equity Units at a price not less
than 100% of the aggregate principal amount of the Notes or (ii) the remarketing
has not occurred because a condition precedent to the remarketing has not been
fulfilled, the remarketing will be deemed to have failed (a "FAILED FINAL
REMARKETING") and in accordance with the terms of the Pledge Agreement the
Collateral Agent for the benefit of the Company will exercise its rights as a
secured party with respect to such Notes including those actions specified in
paragraph (c) below. The Company will cause a notice of such Failed Final
Remarketing to be published on the second Business Day immediately preceding the
Warrant Settlement Date in the Authorized Newspaper.

            (c) With respect to Notes, which are subject to a Failed Final
Remarketing, the Collateral Agent for the benefit of the Company reserves all of
its rights as a secured party with respect thereto and, subject to applicable
law and SECTION 5.03(H) below, may, among other things, (i) retain the Notes or
(ii) sell the Notes in one or more public or private sales, each in full
satisfaction of the Holders' obligations under the Warrants.

            (d) Unless a Termination Event or an Early Settlement has occurred,
the Warrant underlying each Treasury Unit and, if a Tax Event Redemption or a
Successful Initial Remarketing has occurred, each Equity Unit will be settled
with the Proceeds at maturity of the Treasury Security or the Applicable
Ownership Interest (as defined in clause (A) of the definition of such term) of
the Treasury Portfolio, as applicable. Upon receipt of such Proceeds, the
Collateral Agent will invest the Proceeds promptly in Permitted Investments and
pay the Proceeds to the Company on the Warrant Settlement Date in accordance
with the terms of this Agreement and the Pledge Agreement. Any such Proceeds
received by the Collateral Agent in excess of the Purchase Price and any funds
received by the Collateral Agent in respect of the investment earnings from the
investment in such Permitted Investments will be distributed to the Warrant
Agent when received for payment to the Holder.

            (e) Any distribution to Holders of excess funds and interest
described above, shall be payable at the New York Office maintained for that
purpose or, at the option of the Holder, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Security Register
or, at the option of the Company, by wire transfer to the bank account
designated by such Holder in writing, such payments to be made to the same
Persons entitled to receive Common Stock with respect to Warrants referred to in
SECTION 5.03(D) above.


                                      -40-
<PAGE>

            (f) (i) Unless a Holder of a Treasury Equity Units or Equity Units
effects an Early Settlement of the underlying Warrant through the early delivery
of cash to the Warrant Agent in the manner described in SECTION 5.09, each
Holder of a Treasury Equity Unit who intends to pay in cash shall notify the
Warrant Agent by use of a notice in substantially the form of EXHIBIT E hereto
of his intention to pay in cash the Purchase Price for the shares of Common
Stock to be purchased pursuant to the related Warrant. Such notice shall be
given prior to 5:00 p.m. (New York City time) on the second Business Day
immediately preceding the Warrant Settlement Date. Prior to 5:00 p.m. (New York
City time) on the next succeeding Business Day, the Warrant Agent shall notify
the Collateral Agent of the receipt of such notices from such Holders intending
to make a Cash Settlement. Treasury Equity Unit holders may make Cash
Settlements only in integral multiples of 40 Treasury Equity Units.

            (ii) A Holder of a Treasury Equity Unit who has so notified the
      Warrant Agent of his intention to make a Cash Settlement in accordance
      with SECTION 5.03(F)(I) above shall pay the Purchase Price to the
      Securities Intermediary for deposit in the Collateral Account prior to
      5:00 p.m. (New York City time) on the Business Day immediately preceding
      August 17, 2004, in lawful money of the United States by certified or
      cashiers' check or wire transfer, in each case in immediately available
      funds payable to or upon the order of the Securities Intermediary. Any
      cash received by the Collateral Agent shall be invested promptly by the
      Securities Intermediary in Permitted Investments and paid to the Company
      on the Warrant Settlement Date in settlement of the Warrant in accordance
      with the terms of this Agreement and the Pledge Agreement. Any funds
      received by the Securities Intermediary in respect of the investment
      earnings from the investment in such Permitted Investments in excess of
      the Purchase Price for the shares of common stock to be purchased by such
      Holder shall be distributed to the Warrant Agent when received for payment
      to the Holder.

            (iii) If a Holder of a Treasury Equity Unit fails to notify the
      Warrant Agent of his intention to make a Cash Settlement in accordance
      with SECTION 5.03(F)(I) above, or does notify the Warrant Agent as
      provided in SECTION 5.03(F)(I) above of his intention to pay the Purchase
      Price in cash, but fails to make such payment as required by SECTION
      5.03(F)(II) above, then upon the maturity of the Pledged Treasury
      Securities held by the Securities Intermediary on the Business Day
      immediately preceding the Warrant Settlement Date, the principal amount of
      the Treasury Securities received by the Securities Intermediary shall be
      invested promptly in Permitted Investments. On the Warrant Settlement
      Date, an amount equal to the Purchase Price shall be remitted to the
      Company as payment thereof without receiving any instructions from the
      Holder. In the event the sum of the proceeds from the related Pledged
      Treasury Securities and the investment earnings earned from such
      investments is in excess of the aggregate Purchase Price of the Warrants
      being settled thereby, the Collateral Agent shall cause the Securities
      Intermediary to distribute such excess to the Warrant Agent for the
      benefit of the Holder of the related Treasury Equity Unit or Equity Unit
      when received.

            (iv) If a Tax Event Redemption or a Successful Initial Remarketing
      has occurred, a Holder of an Equity Unit may not make a Cash Settlement.


                                      -41-
<PAGE>

            (v) A holder of a Note that is no longer part of an Equity Unit may
      elect to have such Note remarketed pursuant to Section 5.7(c) of the
      Pledge Agreement.

            (g) Upon Cash Settlement of any Warrant:

            (i) the Collateral Agent will in accordance with the terms of the
      Pledge Agreement cause the Pledged Notes, the appropriate Applicable
      Ownership Interest (as specified in clause (A) of the definition of such
      term) of the Treasury Portfolio or the Pledged Treasury Securities, as the
      case may be, underlying the relevant Security to be released from the
      Pledge, free and clear of any security interest of the Company, and
      transferred to the Warrant Agent for delivery to the Holder thereof or its
      designee as soon as practicable; and

            (ii) subject to the receipt thereof, the Warrant Agent shall, by
      book-entry transfer or other appropriate procedures, in accordance with
      written instructions provided by the Holder thereof, transfer such Notes,
      or the appropriate Applicable Ownership Interest (as specified in clause
      (A) of the definition of such term) of the Treasury Portfolio or such
      Treasury Securities, as the case may be (or, if no such instructions are
      given to the Warrant Agent by the Holder, the Warrant Agent shall hold
      such Notes, or the appropriate Applicable Ownership Interest (as specified
      in clause (A) of the definition of such term) of the Treasury Portfolio or
      such Treasury Securities, as the case may be, and any interest payment
      thereon, in the name of the Warrant Agent or its nominee in trust for the
      benefit of such Holder until the expiration of the time period specified
      in the abandoned property laws of the relevant state).

            (h) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early Settlement
or Cash Settlement, are payable solely out of the proceeds of any Collateral
pledged to secure the obligations of the Holders and in no event will Holders be
liable for any deficiency between the proceeds of the disposition of Collateral
and the Purchase Price.

            SECTION 5.04.   FAILED FINAL REMARKETING.

            If a Failed Final Remarketing occurs Holders of Notes that are not
part of an Equity Unit will retain possession of their Notes, and the Reset Rate
will be reset on the Warrant Settlement Date as described in the definition of
Reset Rate in Section 1.01 and in Section 4.01 of this Agreement.

            SECTION 5.05.   ISSUANCE OF SHARES OF COMMON STOCK.

            Unless a Termination Event or an Early Settlement shall have
occurred, subject to SECTION 5.06(B), on the Warrant Settlement Date upon
receipt of the aggregate Purchase Price payable on all Outstanding Securities,
the Company shall issue and deposit with the Warrant Agent, for the benefit of
the Holders of the Outstanding Securities, one or more certificates representing
the shares of Common Stock registered in the name of the Warrant Agent (or its
nominee) as custodian for the Holders (such certificates for shares of Common
Stock, together with any dividends or distributions for which a Record Date and
payment date for such dividend or distribution has occurred after the Warrant
Settlement Date, being hereinafter referred to as the "WARRANT SETTLEMENT FUND")
to which the Holders are entitled hereunder.


                                      -42-
<PAGE>

            Subject to the foregoing, upon surrender of a Certificate to the
Warrant Agent on or after the Warrant Settlement Date, together with settlement
instructions thereon duly completed and executed, the Holder of such Certificate
shall be entitled to receive in exchange therefor a certificate representing
that number of whole shares of Common Stock which such Holder is entitled to
receive pursuant to the provisions of this ARTICLE 5 (after taking into account
all Securities then held by such Holder), together with cash in lieu of
fractional shares as provided in SECTION 5.10 and any dividends or distributions
with respect to such shares constituting part of the Warrant Settlement Fund,
but without any interest thereon, and the Certificate so surrendered shall be
cancelled. Such shares shall be registered in the name of the Holder or the
Holder's designee as specified in the settlement instructions provided by the
Holder to the Warrant Agent. If any shares of Common Stock issued in respect of
a Warrant are to be registered to a Person other than the Person in whose name
the Certificate evidencing such Warrant is registered, no such registration
shall be made unless the Person requesting such registration has paid any
transfer and other taxes required by reason of such registration in a name other
than that of the registered Holder of the Certificate evidencing such Warrant or
has established to the satisfaction of the Company that such tax either has been
paid or is not payable.

            SECTION 5.06.   ADJUSTMENT OF SETTLEMENT RATE.

            (a)   Adjustments for Dividends, Distributions, Stock Splits, Etc.

            (1)   In case the Company shall pay or make a dividend or other
distribution on Common Stock in Common Stock, the Settlement Rate in effect at
the opening of business on the day following the date fixed for the
determination of shareholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which:

            (i)   the numerator shall be the number of shares of Common Stock
      outstanding at the close of business on the date fixed for such
      determination; and

            (ii)  the denominator shall be the sum of such number of shares and
      the total number of shares constituting such dividend or other
      distribution,

such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this PARAGRAPH (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company shall not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of the
Company.

            (2)   In case the Company shall issue rights, warrants or options to
all holders of its Common Stock (not being available on an equivalent basis to
Holders of the Securities upon settlement of the Warrants underlying such
Securities) entitling them, for a period expiring within 45 days after the
Record Date for the determination of shareholders entitled to receive such
rights, warrants or options, to subscribe for or purchase shares of Common Stock
at a price per share less than the Current Market Price per share of Common
Stock on the date fixed for the determination of shareholders entitled to
receive such rights, warrants or options the Settlement


                                      -43-
<PAGE>

Rate in effect at the opening of business on the day following the date fixed
for such determination shall be increased by dividing such Settlement Rate by a
fraction of which:

            (i) the numerator shall be the number of shares of Common Stock
      outstanding at the close of business on the date fixed for such
      determination plus the number of shares of Common Stock which the
      aggregate of the offering price of the total number of shares of Common
      Stock so offered for subscription or purchase would purchase at such
      Current Market Price; and

            (ii) the denominator shall be the number of shares of Common Stock
      outstanding at the close of business on the date fixed for such
      determination plus the number of shares of Common Stock so offered for
      subscription or purchase, such increase to become effective immediately
      after the opening of business on the day following the date fixed for such
      determination. For the purposes of this PARAGRAPH (2), the number of
      shares of Common Stock at any time outstanding shall not include shares
      held in the treasury of the Company but shall include any shares issuable
      in respect of any scrip certificates issued in lieu of fractions of shares
      of Common Stock. The Company agrees that it shall not issue any such
      rights, warrants or options in respect of shares of Common Stock held in
      the treasury of the Company.

            (3)   In case outstanding shares of Common Stock shall be subdivided
or split into a greater number of shares of Common Stock, the Settlement Rate in
effect at the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision, split or
combination becomes effective.

            (4)   In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness or
assets (including securities, but excluding any rights, warrants or options
referred to in PARAGRAPH (2) of this SECTION 5.06(A), any dividend or
distribution paid exclusively in cash and any dividend or distribution referred
to in PARAGRAPH (1) of this SECTION 5.06(A)), the Settlement Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of business on the date
fixed for the determination of shareholders entitled to receive such
distribution by a fraction of which:

            (i)   the numerator shall be the Current Market Price per share of
      Common Stock on the date fixed for such determination less the then fair
      market value (as reasonably determined by the Board of Directors, whose
      determination shall be conclusive and the basis for which shall be
      described in a Board Resolution) of the portion of the assets or evidences
      of indebtedness so distributed applicable to one share of Common Stock;
      and


                                      -44-
<PAGE>

            (ii)  the denominator shall be such Current Market Price per share
      of Common Stock,

such adjustment to become effective immediately prior to the opening of business
on the day following the date fixed for the determination of shareholders
entitled to receive such distribution. In any case in which this PARAGRAPH (4)
is applicable, PARAGRAPH (2) of this SECTION 5.06(A) shall not be applicable. In
the event that such dividend or distribution is not so paid or made, the
Settlement Rate shall again be adjusted to be the Settlement Rate which would
then be in effect if such dividend or distribution had not been declared.

            (5)   In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash excluding:

            (i)   any cash dividend on Common Stock to the extent that the
      aggregate cash dividend per share of Common Stock in any fiscal quarter
      does not exceed 3.75% of the average of the last reported sales price of
      Common Stock during the 10 trading days immediately prior to the date of
      declaration of the dividend (the "DIVIDEND THRESHOLD"), and

            (ii)  any dividend or distribution in connection with the
      liquidation, dissolution or termination of the Company, whether voluntary
      or involuntary), then, in such case, the Settlement Rate shall be
      increased so that the same shall equal the rate determined by dividing the
      Settlement Rate in effect immediately prior to the close of business on
      such Record Date by a fraction of which:

            (iii) the numerator shall be the Current Market Price of Common
      Stock on the Record Date less the amount of cash so distributed (and not
      excluded as provided above) applicable to one share of Common Stock; and

            (iv)  the denominator shall be the Current Market Price of Common
      Stock,

      such increase to be effective immediately prior to the opening of business
      on the day following the Record Date; provided, however, that in the event
      the portion of cash so distributed applicable to one share of Common Stock
      is equal to or greater than the Current Market Price per share of Common
      Stock on the Record Date, in lieu of the foregoing adjustment, adequate
      provision shall be made so that each holder of a Security shall have the
      right to receive upon settlement of the Securities the amount of cash such
      Holder would have received had such Holder settled each Security on the
      Record Date. In the event that such dividend or distribution is not so
      paid or made, the Settlement Rate shall again be adjusted to be the
      Settlement Rate which would then be in effect if such dividend or
      distribution had not been declared. If any adjustment is required to be
      made as set forth in this SECTION 5.06(A)(5) as a result of a distribution
      that is such a quarterly dividend, such adjustment shall be based upon the
      amount by which such distribution exceeds the amount of the Dividend
      Threshold. If an adjustment is required to be made as set forth in this
      SECTION 5.06(A)(5) above as a result of a distribution that is a dividend
      (other than the first dividend in any fiscal quarter), such adjustment
      shall be based upon the full amount of the distribution.


                                      -45-
<PAGE>

            (6)   In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of Common Stock shall expire
and such tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of Purchased Shares as
herein defined) of an aggregate consideration having a fair market value (as
reasonably determined by the Board of Directors, whose determination shall be
conclusive and the basis for which shall be described in a Board Resolution)
that combined together with the aggregate of the cash plus the fair market value
(as reasonably determined by the Board of Directors, whose determination shall
be conclusive and the basis for which shall be described in a Board Resolution),
as of the expiration of such tender or exchange offer, of consideration payable
in respect of any other tender or exchange offer, by the Company or any
subsidiary of the Company for all or any portion of Common Stock expiring within
the 12 months preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to this PARAGRAPH (6) has been made, and
(II) the aggregate amount of any distributions to all holders of Common Stock
made exclusively in cash within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
PARAGRAPH (6) has been made, exceeds 15% of the product of the Current Market
Price per share of Common Stock as of the last time (the "EXPIRATION TIME")
tenders could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business on the date of the Expiration Time by a fraction:

            (i) the numerator of which shall be equal to (A) the product of (I)
      the Current Market Price per share of Common Stock on the date of the
      Expiration Time and (II) the number of shares of Common Stock outstanding
      (including any tendered shares) on the Expiration Time less (B) the amount
      of cash plus the fair market value (determined as aforesaid) of the
      aggregate consideration payable to shareholders based on the transactions
      described in CLAUSES (I) and (II) above (assuming in the case of CLAUSE
      (I) the acceptance, up to any maximum specified in the terms of the tender
      or exchange offer, of Purchased Shares); and

            (ii) the denominator of which shall be equal to the product of (A)
      the Current Market Price per share of Common Stock as of the Expiration
      Time and (B) the number of shares of Common Stock outstanding (including
      any tendered shares) as of the Expiration Time less the number of all
      shares validly tendered and not withdrawn as of the Expiration Time (the
      shares deemed so accepted, up to any such maximum, being referred to as
      the "PURCHASED SHARES").

            (7)   The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which SECTION 5.06(B) applies) shall be deemed to
involve:

            (i) a distribution of such securities other than Common Stock to all
      holders of Common Stock (and the effective date of such reclassification
      shall be deemed to be "the


                                      -46-
<PAGE>

      date fixed for the determination of shareholders entitled to receive such
      distribution" and the "date fixed for such determination" within the
      meaning of PARAGRAPH (4) of this Section); and

            (ii) a subdivision, split or combination, as the case may be, of the
      number of shares of Common Stock outstanding immediately prior to such
      reclassification into the number of shares of Common Stock outstanding
      immediately thereafter (and the effective date of such reclassification
      shall be deemed to be "the day upon which such subdivision or split
      becomes effective" or "the day upon which such combination becomes
      effective", as the case may be, and "the day upon which such subdivision,
      split or combination becomes effective" within the meaning of PARAGRAPH
      (3) of this Section).

            (8)   The "CURRENT MARKET PRICE" per share of Common Stock on any
date of determination means the average of the daily Closing Prices for the five
consecutive Trading Days selected by the Company commencing not more than 30
Trading Days before, and ending not later than, the earlier of such date of
determination and the day before the "ex date" with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph, the
term "ex date," when used with respect to any issuance or distribution, shall
mean the first date on which Common Stock trades on such exchange or in such
market without the right to receive such issuance or distribution.

            (9)   All adjustments to the Settlement Rate shall be calculated to
the nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment
in the Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent thereof; provided, however, that
any adjustments which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
an adjustment is made to the Settlement Rate pursuant to PARAGRAPH (1), (2),
(3), (4), (5), (6), (7) or (10) of this SECTION 5.05(A), an adjustment shall
also be made to the Applicable Market Value solely to determine which of CLAUSES
(I), (ii) or (III) of the definition of Settlement Rate in SECTION 5.01 will
apply on the Warrant Settlement Date. Such adjustment shall be made by
multiplying the Applicable Market Value by a fraction of which the numerator
shall be the Settlement Rate immediately after such adjustment pursuant to
PARAGRAPH (1), (2), (3), (4), (5), (6), (7) or (10) of this SECTION 5.06(A) and
the denominator shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the events contemplated
by PARAGRAPH (1), (2), (3), (4), (5), (6), (7) or (10) of this SECTION 5.06(A)
during the period taken into consideration for determining the Applicable Market
Value, appropriate and customary adjustments shall be made to the Settlement
Rate.

            (10)  The Company may, but shall not be required to, make such
increases in the Settlement Rate, in addition to those required by this Section,
as it considers to be advisable in order to avoid or diminish any income tax to
any holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or subscribe
for stock or from any event treated as such for income tax purposes or for any
other reason.


                                      -47-
<PAGE>

            (b)   Adjustment for Consolidation, Merger or Other Reorganization
Event.

            (1)   In the event of:

            (i)   any consolidation or merger of the Company with or into
      another Person (other than a merger or consolidation in which the Company
      is the continuing corporation and in which the shares of Common Stock
      outstanding immediately prior to the merger or consolidation are not
      exchanged for cash, securities or other property of the Company or another
      Person);

            (ii)  any sale, transfer, lease or conveyance to another Person of
      the property of the Company as an entirety or substantially as an
      entirety;

            (iii) any statutory share exchange of the Company with another
      Person (other than in connection with a merger or acquisition);

            (iv)  any liquidation, dissolution or termination of the Company
      other than as a result of or after the occurrence of a Termination Event
      (any such event, a "REORGANIZATION EVENT"),

the Settlement Rate will be adjusted to provide that each Holder of Securities
will receive on the Warrant Settlement Date with respect to each Warrant forming
a part thereof, the kind and amount of securities, cash and other property
receivable upon such Reorganization Event (without any interest thereon, and
without any right to dividends or distribution thereon which have a Record Date
that is prior to the Warrant Settlement Date) by a Holder of the number of
shares of Common Stock issuable on account of each Warrant if the Warrant
Settlement Date had occurred immediately prior to such Reorganization Event,
assuming such Holder of Common Stock is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (any such Person,
a "CONSTITUENT PERSON"), or an Affiliate of a Constituent Person to the extent
such Reorganization Event provides for different treatment of Common Stock held
by Affiliates of the Company and non-affiliates and such Holder failed to
exercise his rights of election, if any, as to the kind or amount of securities,
cash and other property receivable upon such Reorganization Event (provided that
if the kind or amount of securities, cash and other property receivable upon
such Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("NON-ELECTING SHARE"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares).

            In the event of such a Reorganization Event, the Person formed by
such consolidation, merger or exchange or the Person which acquires the assets
of the Company or, in the event of a liquidation, dissolution or termination of
the Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Warrant Agent an agreement supplemental hereto
providing that each Holder of an Outstanding Security shall


                                      -48-
<PAGE>

have the rights provided by this SECTION 5.06(B). Such supplemental agreement
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental agreement, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section. The above
provisions of this Section shall similarly apply to successive Reorganization
Events.

            (2)   In the event of a consolidation or merger of the Company with
or into another Person, any merger of another Person into the Company (other
than a merger that does not result in any reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock) in which 30% or more of
the total consideration paid to the Company's shareholders consists of cash or
cash equivalents, then a Holder of a Security may settle his Warrant for cash as
described in SECTION 5.03(A)(I) or 5.03(F)(I) hereof, as applicable, during the
one week period beginning on the twenty-third Trading Day following the closing
date of such merger (the "EARLY SETTLEMENT WEEK"), at the applicable Settlement
Rate. For the purposes of this Section, the twenty-third Trading Day after the
closing of the merger or consolidation shall be deemed to be the Warrant
Settlement Date for the purpose of determining the Applicable Market Value and
the deadline for submitting the notice to settle early and the related cash
payment shall be 5:00 p.m. (New York City time) of the last Business Day of the
Early Settlement Week.

            (c)   All calculations and determinations pursuant to this ARTICLE 5
including but not limited to the Applicable Market Value, shall be made by the
Company or its agent, and the Warrant Agent shall have no responsibility with
respect thereto.

            If at any time the Company makes a distribution of property to
holders of its common stock that would be taxable to such shareholders as a
dividend for United States federal income tax purposes (i.e., distributions of
evidences of the Company's indebtedness or assets, but generally not stock
dividends or rights to subscribe for capital stock) and, pursuant to the
Settlement Rate adjustment provisions of SECTION 5.06 hereof, the Settlement
Rate is increased, such increase may give rise to a taxable dividend to holders
of the Equity Units and Treasury Equity Units.

            Each adjustment to the Settlement Rate will result in a
corresponding adjustment to the number of shares of Common Stock issuable upon
Early Settlement.

            If an adjustment is made to the Settlement Rate, an adjustment also
will be made to the Applicable Market Value solely to determine which Settlement
Rate will be applicable on the Warrant Settlement Date.

            SECTION 5.07.   NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.

            (a)   Whenever the Settlement Rate is adjusted as herein provided,
the Company shall:

            (i)   forthwith compute the adjusted Settlement Rate in accordance
      with SECTION 5.06 and prepare and transmit to the Warrant Agent an
      Officers' Certificate setting forth the Settlement Rate, the method of
      calculation thereof in reasonable detail, and the facts requiring such
      adjustment and upon which such adjustment is based; and


                                      -49-
<PAGE>

            (ii)  within 10 Business Days following the occurrence of an event
      that requires an adjustment to the Settlement Rate pursuant to SECTION
      5.06 (or if the Company is not aware of such occurrence, as soon as
      practicable after becoming so aware), provide a written notice to the
      Holders of the Securities of the occurrence of such event and a statement
      in reasonable detail setting forth the method by which the adjustment to
      the Settlement Rate was determined and setting forth the adjusted
      Settlement Rate.

            (b)   The Warrant Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same or with respect to any other
calculation made pursuant to this ARTICLE 5. The Warrant Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at the time
be issued or delivered with respect to any Warrant; and the Warrant Agent makes
no representation with respect thereto. The Warrant Agent shall not be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock pursuant to a Warrant or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article.

            SECTION 5.08.   TERMINATION EVENT; NOTICE.

            The Warrants and all obligations and rights of the Company and the
Holders thereunder, including, without limitation, the rights and obligations of
Holders to purchase Common Stock, shall immediately and automatically terminate,
without the necessity of any notice or action by any Holder, the Warrant Agent
or the Company, if, prior to or on the Warrant Settlement Date, a Termination
Event shall have occurred.

            Upon and after the occurrence of a Termination Event, the Securities
shall thereafter represent the right to receive the Notes, the Treasury
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, forming part of such Securities, in accordance
with the provisions of Section 5.02 and 5.03 of the Pledge Agreement. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to the Warrant
Agent, the Collateral Agent and the Holders, at their addresses as they appear
in the Security Register.

            SECTION 5.09.   EARLY SETTLEMENT.

            (a) Subject to and upon compliance with the provisions of this
Section 5.09, at the option of the Holder thereof, Warrants underlying
Securities may be settled early ("EARLY SETTLEMENT") in the case of Equity Units
(unless a Tax Event Redemption or a Successful Initial Remarketing has occurred)
on or prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Warrant Settlement Date, and in the case of Treasury
Equity Units on or prior to the second Business Day immediately preceding the
Warrant Settlement Date, in each case, as provided herein; provided however,
that if a Tax Event Redemption or a Successful Initial Remarketing has occurred
and the Treasury Portfolio has become a component of the Equity Units, Warrants
underlying such Equity Units may not be settled early. Holders of Treasury
Equity Units may only settle the related Warrants in integral multiples of 40
Warrants.


                                      -50-
<PAGE>

In order to exercise the right to effect Early Settlement with respect to any
Warrants, the Holder of the Certificate evidencing Securities shall deliver to
the Warrant Agent at the Corporate Trust Office an Election to Settle Early form
(on the reverse side of the Certificate) and any other documents requested by
the Warrant Agent and accompanied by payment (payable to the Company in
immediately available funds) in an amount (the "EARLY SETTLEMENT AMOUNT") equal
to (i) the product of (a) the Stated Amount times (b) the number of Warrants
with respect to which the Holder has elected to effect Early Settlement.

            If the foregoing requirements are first satisfied with respect to
Warrants underlying any Securities prior to or at 5:00 p.m. (New York City time)
on a Business Day, such day shall be the "EARLY SETTLEMENT DATE" with respect to
such Securities and if such requirements are first satisfied after 5:00 p.m.
(New York City time) on a Business Day or on a day that is not a Business Day,
the "EARLY SETTLEMENT DATE" with respect to such Securities shall be the next
succeeding Business Day.

            (b)   Upon Early Settlement of Warrants by a Holder of the related
Securities, the Company shall issue, and the Holder shall be entitled to receive
1.7218 shares of Common Stock on account of each Warrant as to which Early
Settlement is effected (the "EARLY SETTLEMENT RATE"). The Early Settlement Rate
shall be adjusted in the same manner and at the same time as the Settlement Rate
is adjusted.

            (i)   No later than the third Business Day after the applicable
      Early Settlement Date, the Company shall cause:

            (ii)  Upon receipt of the shares of Common Stock from the Company's
      Transfer Agent, the shares of Common Stock issuable upon Early settlement
      of Warrants to be issued and delivered, together with payment in lieu of
      any fraction of a share, as provided in SECTION 5.10; and

            (iii) the related Notes, in the case of Equity Units, or the related
      Treasury Securities of the Treasury Portfolio, in the case of Treasury
      Equity Units, to be released from the Pledge by the Collateral Agent and
      transferred, in each case, to the Warrant Agent for delivery to the Holder
      thereof or its designee.

            (c)   Upon Early Settlement of any Warrants, and subject to receipt
of shares of Common Stock from the Company and the Notes, or Treasury
Securities, as the case may be, from the Securities Intermediary, as applicable,
the Warrant Agent shall, in accordance with the instructions provided by the
Holder thereof on the Election to Settle Early form (on the reverse of the
Certificate evidencing the related Securities):

            (i)   transfer to the Holder the Notes or Treasury Securities, as
      the case may be, forming a part of such Securities; and.

            (ii) deliver to the Holder a certificate or certificates for the
      full number of shares of Common Stock issuable upon such Early Settlement,
      together with payment in lieu of any fraction of a share, as provided in
      SECTION 5.10.


                                      -51-
<PAGE>

            (d) In the event that Early Settlement is effected with respect to
Warrants underlying less than all the Securities evidenced by a Certificate,
upon such Early Settlement the Company shall execute and the Warrant Agent shall
authenticate, countersign and deliver to the Holder thereof, at the expense of
the Company, a Certificate evidencing the Securities as to which Early
Settlement was not effected.

            (e) A Holder of a Security who effects Early Settlement may elect to
have the Notes no longer a part of an Equity Unit, or Treasury Equity Unit, as
the case may be, remarketed pursuant to Section 5.7(c) of the Pledge Agreement.

            (f) As long as the Equity Units or Treasury Equity Units, as
applicable, are evidenced by one or more global Equity Unit or Treasury Equity
Unit Certificates deposited with DTC, procedures for early settlement also will
be governed by standing arrangements between DTC and the Warrant Agent.

            SECTION 5.10.   NO FRACTIONAL SHARES.

            No fractional shares or scrip representing fractional shares of
Common Stock shall be issued or delivered upon settlement on the Warrant
Settlement Date or upon Early Settlement of any Warrants. If Certificates
evidencing more than one Warrant shall be surrendered for settlement at one time
by the same Holder, the number of full shares of Common Stock which shall be
delivered upon settlement shall be computed on the basis of the aggregate number
of Warrants evidenced by the Certificates so surrendered. Instead of any
fractional share of Common Stock which would otherwise be deliverable upon
settlement of any Warrants on the Warrant Settlement Date or upon Early
Settlement, the Company, through the Warrant Agent, shall make a cash payment in
respect of such fractional interest in an amount equal to the value of such
fractional shares times the Applicable Market Value. The Company shall provide
the Warrant Agent from time to time with sufficient funds to permit the Warrant
Agent to make all cash payments required by this SECTION 5.10 in a timely manner
and the Warrant Agent shall have no duties or liabilities under this Section
unless and until it has received appropriate payment instructions and sufficient
funds to make the payments hereunder.

            SECTION 5.11.   CHARGES AND TAXES.

            The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares of Common Stock
pursuant to the Warrants; provided, however, that the Company shall not be
required to pay any such tax or taxes which may be payable in respect of any
exchange of or substitution for a Certificate evidencing a Security or any
issuance of a share of Common Stock in a name other than that of the registered
Holder of a Certificate surrendered in respect of the Securities evidenced
thereby, other than in the name of the Warrant Agent, as custodian for such
Holder, and the Company shall not be required to issue or deliver such share
certificates or Certificates unless or until the Person or Persons requesting
the transfer or issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.


                                      -52-
<PAGE>

                                    ARTICLE 6
                                    REMEDIES

            SECTION 6.01.   UNCONDITIONAL RIGHT OF HOLDERS TO PURCHASE SHARES
                            OF COMMON STOCK.

            Each Holder of a Security shall have the right, which is absolute
and unconditional, to purchase shares of Common Stock pursuant to the Warrant
constituting a part of such Security and to institute suit for the enforcement
of such right, which rights shall not be impaired without the consent of such
Holder.

            SECTION 6.02.   RESTORATION OF RIGHTS AND REMEDIES.

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

            SECTION 6.03.   RIGHTS AND REMEDIES CUMULATIVE.

            Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of SECTION 3.10, no right or remedy herein conferred upon or reserved
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

            SECTION 6.04.   DELAY OR OMISSION NOT WAIVER.

            No delay or omission of any Holder to exercise any right or remedy
upon a default shall impair any such right or remedy or constitute a waiver of
any such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.

            SECTION 6.05.   UNDERTAKING FOR COSTS.

            All parties to this Agreement agree, and each Holder of a Security,
by its acceptance of such Security 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 Agreement, or in any suit against the Warrant Agent
for any action taken, suffered or omitted by it as Warrant Agent, the filing by
any party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and costs against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided that the provisions of this Section shall not
apply to any suit instituted by the Warrant Agent, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% of the
Outstanding Securities, or to


                                      -53-
<PAGE>

any suit instituted by any Holder for the enforcement of interest on any Notes
in respect of any Security held by such Holder, or for enforcement of the right
to purchase shares of Common Stock under the Warrants constituting part of any
Security held by such Holder.

            SECTION 6.06.   WAIVER OF STAY OR EXTENSION LAWS.

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

                                   ARTICLE 7
                                THE WARRANT AGENT

            SECTION 7.01.   CERTAIN DUTIES AND RESPONSIBILITIES.

            (a) The Warrant Agent:

            (i) undertakes to perform, with respect to the Securities, such
      duties and only such duties as are specifically set forth in this
      Agreement and the Pledge Agreement, and no implied covenants or
      obligations shall be read into this Agreement or the Pledge Agreement
      against the Warrant Agent; and

            (ii) in the absence of bad faith or gross negligence on its part,
      may, with respect to the Securities, conclusively rely, as to the truth of
      the statements and the correctness of the opinions expressed therein, and
      shall be fully protected in such reliance upon certificates, notices or
      opinions furnished to the Warrant Agent including those furnished by
      Holders, the Collateral Agent and the Securities Intermediary, and
      conforming to the requirements of this Agreement or the Pledge Agreement,
      as applicable, but in the case of any certificates or opinions which by
      any provision hereof are specifically required to be furnished to the
      Warrant Agent, the Warrant Agent shall be under a duty to examine the same
      to determine whether or not they conform to the requirements of this
      Agreement or the Pledge Agreement, as applicable (but need not confirm or
      investigate the accuracy of the mathematical calculations or other facts
      stated therein).

            (b) No provision of this Agreement or the Pledge Agreement shall be
construed to relieve the Warrant Agent from liability for its own grossly
negligent action, its own grossly negligent failure to act, or its own willful
misconduct, except that:

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


                                      -54-
<PAGE>

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

            (iii) no provision of this Agreement or the Pledge Agreement shall
      require the Warrant Agent 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 indemnity
      satisfactory to the Warrant Agent is not provided to it; and

            (iv) the Warrant Agent 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 liquidation amount or
      principal amount, as the case may be, of the Outstanding Securities.

            (c) Whether or not therein expressly so provided, every provision of
this Agreement and the Pledge Agreement relating to the conduct or affecting the
liability of or affording protection to the Warrant Agent shall be subject to
the provisions of this Section.

            (d) The Warrant Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Warrant Agent.

            SECTION 7.02.   NOTICE OF DEFAULT.

            Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Warrant Agent has actual
knowledge, the Warrant Agent shall transmit by mail to the Company and the
Holders of Securities, as their names and addresses appear in the Security
Register, notice of such default hereunder, unless such default shall have been
cured or waived.

            SECTION 7.03.   CERTAIN RIGHTS OF WARRANT AGENT.

            Subject to the provisions of SECTION 7.01:

            (i) the Warrant Agent may conclusively rely and shall be fully
      protected in acting or refraining from acting upon any resolution,
      certificate, statement, instrument, opinion, report, notice, request,
      direction, consent, order, bond, Note, other evidence of indebtedness or
      other paper or document believed by it to be genuine and to have been
      signed or presented by the proper party or parties;

            (ii) any request or direction of the Company mentioned herein shall
      be sufficiently evidenced by an Officers' Certificate, Issuer Order or
      Issuer Request, and any resolution of the Board of Directors of the
      Company may be sufficiently evidenced by a Board Resolution;

            (iii) whenever in the administration of this Agreement or the Pledge
      Agreement the Warrant Agent shall deem it desirable that a matter be
      proved or established prior to taking, suffering or omitting any action
      hereunder or if the Warrant Agent is unsure of what action to take
      hereunder, the Warrant Agent (unless other evidence be herein specifically
      prescribed) may request and, in the absence of bad faith


                                      -55-
<PAGE>

      on its part, may conclusively rely upon an Officers' Certificate of the
      Company and the Warrant Agent shall incur no liability for any failure to
      act prior to receiving such Officers' Certificate;

            (iv) the Warrant Agent 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 and in reliance thereon;

            (v) the Warrant Agent shall not be bound to make any investigation
      into the facts or matters stated in any resolution, certificate,
      statement, instrument, opinion, report, notice, request, direction,
      consent, order, bond, debenture, note, other evidence of indebtedness or
      other paper or document, but the Warrant Agent, in its discretion, and at
      the expense of the Company, may make reasonable further inquiry or
      investigation into such facts or matters related to the execution,
      delivery and performance of the Warrants as it may see fit, and, if the
      Warrant Agent shall determine to make such further inquiry or
      investigation, it shall be given a reasonable opportunity to examine the
      relevant books, records and premises of the Company, personally or by
      agent or attorney and shall incur no liability or additional liability of
      any kind by reason of such inquiry or investigation;

            (vi) the Warrant Agent may execute any of the powers hereunder or
      perform any duties hereunder either directly or by or through agents or
      attorneys or an Affiliate and the Warrant Agent shall not be responsible
      for any misconduct or negligence on the part of any agent or attorney or
      an Affiliate appointed with due care by it hereunder;

            (vii) the Warrant Agent shall be under no obligation to exercise any
      of the rights or powers vested in it by this Agreement at the request or
      direction of any of the Holders pursuant to this Agreement, unless such
      Holders shall have offered to the Warrant Agent security or indemnity
      satisfactory to the Warrant Agent against the costs, expenses and
      liabilities which might be incurred by it in compliance with such request
      or direction;

            (viii) the Warrant Agent shall not be liable for any action taken,
      suffered, or omitted to be taken by it in good faith and reasonably
      believed by it to be authorized or within the discretion or rights or
      powers conferred upon it by this Agreement;

            (ix) the Warrant Agent shall not be deemed to have notice of any
      default or event of default unless a Responsible Officer of the Warrant
      Agent has actual knowledge thereof or unless written notice of any event
      which is in fact such a default is received by the Warrant Agent at the
      Corporate Trust Office of the Warrant Agent, and such notice references
      the Securities and this Agreement;

            (x) the Warrant Agent may request that the Company deliver an
      Officers' Certificate setting forth the names of individuals and/or titles
      of officers authorized at such time to take specified actions pursuant to
      this Agreement, which Officers' Certificate may be signed by any person
      authorized to sign an Officers' Certificate, including any


                                      -56-
<PAGE>

      person specified as so authorized in any such certificate previously
      delivered and not superseded; and

            (xi) the rights, privileges, protections, immunities and benefits
      given to the Warrant Agent, including, without limitation, its right to be
      indemnified, are extended to, and shall be enforceable by, the Warrant
      Agent in each of its capacities hereunder, and to each agent, custodian
      and other Person employed to act hereunder.

            SECTION 7.04.   NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
                            SECURITIES.

            The recitals contained herein and in the Certificates shall be taken
as the statements of the Company, and the Warrant Agent assumes no
responsibility for their accuracy. The Warrant Agent makes no representations as
to the validity or sufficiency of either this Agreement or of the Securities, or
of the Pledge Agreement or the Pledge. The Warrant Agent shall not be
accountable for the use or application by the Company of the proceeds in respect
of the Warrants.

            SECTION 7.05.   MAY HOLD SECURITIES.

            Any Security Registrar or any other agent of the Company, or the
Warrant Agent and its Affiliates, in their individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with the
Company, the Collateral Agent or any other Person with the same rights it would
have if it were not Security Registrar or such other agent, or the Warrant
Agent. The Company may become the owner or pledgee of Securities.

            SECTION 7.06.   MONEY HELD IN CUSTODY.

            Money held by the Warrant Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or provided
herein. The Warrant Agent shall be under no obligation to invest or pay interest
on any money received by it hereunder except as otherwise provided hereunder
agreed in writing with the Company.

            SECTION 7.07.   COMPENSATION AND REIMBURSEMENT.

            The Company agrees:

            (i) to pay to the Warrant Agent compensation for all services
      rendered by it hereunder and under the Pledge Agreement as the Company and
      the Warrant Agent shall from time to time agree in writing;

            (ii) except as otherwise expressly provided for herein, to reimburse
      the Warrant Agent upon its request for all reasonable expenses,
      disbursements and advances incurred or made by the Warrant Agent in
      accordance with any provision of this Agreement or the Pledge Agreement
      (including the reasonable compensation and the expenses and disbursements
      of its agents and counsel), except any such expense, disbursement or
      advance as may be attributable to its gross negligence or willful
      misconduct; and

            (iii) to indemnify the Warrant Agent and any predecessor Warrant
      Agent for, and to hold it harmless against, any claim, loss, liability,
      damage, fine, penalty and


                                      -57-
<PAGE>

      imposed on, expense incurred by/or asserted against, the Warrant Agent,
      without gross negligence or willful misconduct on its part, arising out of
      or in connection with the acceptance or administration of its duties
      hereunder or the Pledge Agreement, including the costs and expenses of
      defending itself against any claim (whether asserted by the Company, a
      Holder or any other Person) or liability in connection with the exercise
      or performance of any of its powers or duties hereunder and for following
      any instructions or other directions upon which the Warrant Agent is
      entitled to rely pursuant to the terms of this Agreement or the Pledge
      Agreement.

            SECTION 7.08.   CORPORATE WARRANT AGENT REQUIRED; ELIGIBILITY.

            There shall at all times be a Warrant Agent hereunder which shall be
a corporation organized and doing business under the laws of the United States
of America, any State thereof or the District of Columbia, having (or being a
member of a bank holding company having) a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or State
authority and having a corporate trust office in the Borough of Manhattan, New
York City, if there be such a Person in the Borough of Manhattan, New York City,
qualified and eligible under this Article and willing to act on reasonable
terms. If such Person 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
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 Warrant
Agent shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

            SECTION 7.09.   RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

            (a) No resignation or removal of the Warrant Agent and no
appointment of a successor Warrant Agent pursuant to this Article shall become
effective until the acceptance of appointment by the successor Warrant Agent in
accordance with the applicable requirements of SECTION 7.10.

            (b) The Warrant Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date of such
resignation. If the instrument of acceptance by a successor Warrant Agent
required by SECTION 7.10 shall not have been delivered to the Warrant Agent
within 30 days after the giving of such notice of resignation, the resigning
Warrant Agent may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Warrant Agent.

            (c) The Warrant Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Securities delivered to the
Warrant Agent and the Company.

            (d) If at any time:

            (i) the Warrant Agent fails to comply with Section 310(b) of the
      TIA, as if the Warrant Agent were an indenture trustee under an indenture
      qualified under the TIA,


                                      -58-
<PAGE>

      after written request therefor by the Company or by any Holder who has
      been a bona fide Holder of a Security for at least six months;

            (ii) the Warrant Agent shall cease to be eligible under SECTION 7.08
      and shall fail to resign after written request therefor by the Company or
      by any such Holder; or

            (iii) the Warrant Agent shall become incapable of acting or shall be
      adjudged a bankrupt or insolvent or a receiver of the Warrant Agent or of
      its property shall be appointed or any public officer shall take charge or
      control of the Warrant Agent 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 may remove the
Warrant Agent, or (ii) any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Warrant Agent and the appointment of a successor Warrant Agent.

            (e) If the Warrant Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Warrant Agent
for any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Warrant Agent and shall comply with the applicable requirements of
SECTION 7.10. If no successor Warrant Agent shall have been so appointed by the
Company and accepted appointment in the manner required by SECTION 7.10, any
Holder who has been a bona fide Holder of a Security for at least six months, on
behalf of itself and all others similarly situated, or the Warrant Agent may
petition at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor Warrant Agent.

            (f) The Company shall give, or shall cause such successor Warrant
Agent to give, notice of each resignation and each removal of the Warrant Agent
and each appointment of a successor Warrant Agent by mailing written notice of
such event by first-class mail, postage prepaid, to all Holders as their names
and addresses appear in the applicable Register. Each notice shall include the
name of the successor Warrant Agent and the address of its Corporate Trust
Office.

            SECTION 7.10.   ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

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

            (b) Upon request of any such successor Warrant Agent, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such


                                      -59-
<PAGE>

successor Warrant Agent all such rights, powers and agencies referred to in
PARAGRAPH 7.10(A) of this Section.

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

            SECTION 7.11.   MERGER, CONVERSION, CONSOLIDATION
                            OR SUCCESSION TO BUSINESS.

            Any Person into which the Warrant Agent may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
Person succeeding to all or substantially all the corporate trust business of
the Warrant Agent, shall be the successor of the Warrant Agent hereunder,
provided such Person shall be otherwise qualified and eligible under this
Article, with the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Warrant Agent then in office, any successor by merger, conversion or
consolidation to such Warrant Agent may adopt such authentication and execution
and deliver the Certificates so authenticated and executed with the same effect
as if such successor Warrant Agent had itself authenticated and executed such
Securities.

            SECTION 7.12.   PRESERVATION OF INFORMATION; COMMUNICATIONS TO
                            HOLDERS.

            (a) The Warrant Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the
Warrant Agent in its capacity as Security Registrar.

            (b) If three or more Holders (herein referred to as "APPLICANTS")
apply in writing to the Warrant Agent, and furnish to the Warrant Agent
reasonable proof that each such applicant has owned a Security for a period of
at least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other Holders with respect
to their rights under this Agreement or under the Securities and is accompanied
by a copy of the form of proxy or other communication which such applicants
propose to transmit, then the Warrant Agent shall mail to all the Holders copies
of the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Warrant Agent of the materials
to be mailed and of payment, or provision for the payment, of the reasonable
expenses of such mailing.

            SECTION 7.13.   NO OBLIGATIONS OF WARRANT AGENT.

            Except to the extent otherwise expressly provided in this Agreement,
the Warrant Agent assumes no obligations and shall not be subject to any
liability under this Agreement, the Pledge Agreement or any Warrant in respect
of the obligations of the Holder of any Security thereunder. The Company agrees,
and each Holder of a Certificate, by his acceptance thereof, shall be deemed to
have agreed, that the Warrant Agent's execution of the Certificates on behalf of
the Holders shall be solely as agent and attorney-in-fact for the Holders, and
that the Warrant Agent shall have no obligation to perform such Warrants on
behalf of the Holders, except to the extent expressly provided in Article Five
hereof. Anything contained in this Agreement to the


                                      -60-
<PAGE>

contrary notwithstanding, in no event shall the Warrant Agent or its officers,
employees or agents be liable under this Agreement for indirect, incidental,
special, punitive, or consequential loss or damage of any kind whatsoever,
including lost profits, whether or not the likelihood of such loss or damage was
known to the Warrant Agent.

            SECTION 7.14.   TAX COMPLIANCE.

            (a) The Company and the Warrant Agent will comply with all
applicable certification, information reporting and withholding (including
"backup" withholding) requirements imposed by applicable tax laws, regulations
or administrative practice with respect to (1) any payments made with respect to
the Securities or (2) the issuance, delivery, holding, transfer, redemption or
exercise of rights under the Securities. Such compliance shall include, without
limitation, the preparation and timely filing of required returns and the timely
payment of all amounts required to be withheld to the appropriate taxing
authority or its designated agent.

            (b) The Warrant Agent shall comply in accordance with the terms
hereof with any written direction received from the Company with respect to the
execution or certification of any required documentation and the application of
such requirements to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement conclusively rely on any
such direction in accordance with the provisions of SECTION 7.01(A)(2) hereof.

            (c) The Warrant Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available, on written request, to the Company or its authorized representative
within a reasonable period of time after receipt of such request.

            (d) The Company and the Holders (by virtue of their acceptance of
the Equity Units Certificates and their consent to the terms of this Agreement)
(i) will agree to treat the Warrants as forward purchase contracts for the
purchase of shares of Common Stock for all United States tax purposes, and (ii)
shall not take any position that is inconsistent with the foregoing treatment in
any tax return or other document filed with any taxing authority, except as
otherwise required by law.

                                   ARTICLE 8
                             SUPPLEMENTAL AGREEMENTS

            SECTION 8.01.   SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS.

            Without the consent of any Holders, the Company and the Warrant
Agent, at any time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Warrant Agent,
to:

            (i) evidence the succession of another Person to the Company, and
      the assumption by any such successor of the covenants of the Company
      herein and in the Certificates;

            (ii) evidence and provide for the acceptance of appointment
      hereunder by a successor Warrant Agent;


                                      -61-
<PAGE>

            (iii) add to the covenants of the Company for the benefit of the
      Holders, or surrender any right or power herein conferred upon the
      Company;

            (iv) make provision with respect to the rights of Holders pursuant
      to the requirements of SECTION 5.05(B); or

            (v) except as provided for in SECTION 5.05, cure any ambiguity,
      correct or supplement any provisions herein which may be inconsistent with
      any other provisions herein, or make any other provisions with respect to
      such matters or questions arising under this Agreement, provided such
      action shall not adversely affect the interests of the Holders.

            SECTION 8.02.   SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS.

            With the consent of the Holders of not less than a majority of the
outstanding Securities voting together as one class, by Act of said Holders
delivered to the Company and the Warrant Agent, the Company, when authorized by
a Board Resolution, and the Warrant Agent may enter into an agreement or
agreements supplemental hereto for the purpose of modifying in any manner the
terms of the Warrants, or the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that, except as
contemplated herein, no such supplemental agreement shall, without the unanimous
consent of the Holders of each outstanding Warrant affected thereby:

            (i) change any Payment Date;

            (ii) change the amount or the type of Collateral required to be
      Pledged to secure a Holder's obligations under the Warrant, impair the
      right of the Holder of any Warrant to receive distributions on the related
      Collateral (except for the rights of Holders of Equity Units to substitute
      Treasury Securities for the Pledged Notes or the Applicable Ownership
      Interest of the Treasury Portfolio or the rights of Holders or Treasury
      Equity Units to substitute Notes or the Applicable Ownership Interest of
      the Treasury Portfolio for the Pledged Treasury Securities) or otherwise
      adversely affect the Holder's rights in or to such Collateral or adversely
      alter the rights in or to such Collateral;

            (iii) change the place or currency of payment;

            (iv) impair the right to institute suit for the enforcement of any
      Warrant;

            (v) reduce the number of shares of Common Stock to be purchased
      pursuant to any Warrant, increase the price to purchase shares of Common
      Stock upon settlement of any Warrant or change the Warrant Settlement Date
      or otherwise adversely affect the Holder's rights under a Warrant; or

            (vi) reduce the percentage of the outstanding Warrants the consent
      of whose Holders is required for any such supplemental agreement;

provided that if any amendment or proposal referred to above would adversely
affect only the Equity Units or only the Treasury Equity Units, then only the
affected class of Holders as of the


                                      -62-
<PAGE>

Record Date for the Holders entitled to vote thereon will be entitled to vote on
such amendment or proposal, and such amendment or proposal shall not be
effective except with the consent of Holders of not less than a majority of such
class; and provided, further, that the unanimous consent of the Holders of each
outstanding Warrant of such class affected thereby shall be required to approve
any amendment or proposal specified in CLAUSES (I) through (VI) above.

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

            SECTION 8.03.   EXECUTION OF SUPPLEMENTAL AGREEMENTS.

            In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Warrant Agent shall be provided, and
(subject to SECTION 7.01) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such
supplemental agreement is authorized or permitted by this Agreement and that all
conditions precedent to the execution and delivery of such supplemental
agreement have been satisfied. The Warrant Agent may, but shall not be obligated
to, enter into any such supplemental agreement which affects the Warrant Agent's
own rights, duties or immunities under this Agreement or otherwise.

            SECTION 8.04.   EFFECT OF SUPPLEMENTAL AGREEMENTS.

            Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder, shall be bound thereby.

            SECTION 8.05.   REFERENCE TO SUPPLEMENTAL AGREEMENTS.

            Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Warrant Agent, bear a notation in form
approved by the Warrant Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Warrant Agent and the Company, to any such
supplemental agreement may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Warrant
Agent in exchange for outstanding Certificates.

                                   ARTICLE 9
                   CONSOLIDATION OR MERGER, SALE OR CONVEYANCE

            SECTION 9.01.   COVENANT NOT TO CONSOLIDATE OR MERGE, SELL OR
                            CONVEY PROPERTY EXCEPT UNDER CERTAIN CONDITIONS.

            The Company covenants that it will not consolidate or merge with or
into or sell, lease, convey or otherwise dispose of all or substantially all of
its assets (including,


                                      -63-
<PAGE>

without limitation, by way of liquidation or dissolution), in any one
transaction or in a series of related transactions, to any other corporation (in
each case other than in a transaction in which the Company is the survivor of a
consolidation or merger, or the transferee in a sale, lease, conveyance or other
disposition) unless:

            (i) the entity formed by or surviving such consolidation or merger
      (if other than the Company), or to which such sale, lease, conveyance or
      other disposition will be made (collectively, the "SUCCESSOR"), is a
      corporation, limited liability company or other legal entity organized and
      existing under the laws of the United States or any state thereof or the
      District of Columbia, and the Successor expressly assumes all of the
      obligations of the Company under this Agreement, and

            (ii) immediately after giving effect to such transaction or series
      of related transactions, no default hereunder occurred and is continuing.

Notwithstanding the foregoing, this Section 9.01 shall not apply with respect to
(a) the disposition to any or all of the assets identified in the Company's
March 31, 2001 audited consolidated financial assets as "discontinued
operations", or "assets held for sale" and (b) the any or all of the assets of
Electric Lightwave, Inc.

            SECTION 9.02.   RIGHTS AND DUTIES OF SUCCESSOR PERSON.

            In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with SECTION 9.01, such successor Person
shall succeed to and be substituted for the Company with the same effect as if
it had been named herein as the Company. Such successor Person thereupon may
cause to be signed, and may issue either in its own name or in the name of
Citizens Communications Company, any or all of the Certificates evidencing
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Warrant Agent; and, upon the order of such
successor corporation, instead of the Company, and subject to all the terms,
conditions and limitations in this Agreement prescribed, the Warrant Agent shall
authenticate and execute on behalf of the Holders and deliver any Certificates
which previously shall have been signed and delivered by the officers of the
Company to the Warrant Agent for authentication and execution, and any
Certificate evidencing Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Warrant Agent for that purpose.
All the Certificates issued shall in all respects have the same legal rank and
benefit under this Agreement as the Certificates theretofore or thereafter
issued in accordance with the terms of this Agreement as though all of such
Certificates had been issued at the date of the execution hereof.

            In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing Securities
thereafter to be issued as may be appropriate.


                                      -64-
<PAGE>

            SECTION 9.03.   OFFICERS' CERTIFICATE AND OPINION OF COUNSEL GIVEN
                            TO WARRANT AGENT.

            The Warrant Agent, subject to SECTIONS 7.01 and 7.03, shall receive
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any such merger, consolidation, share exchange, sale, assignment, transfer,
lease or conveyance, and any such assumption, complies with the provisions of
this Article and that all conditions precedent to the consummation of any such
merger, consolidation, share exchange, sale, assignment, transfer, lease or
conveyance have been met.

                                   ARTICLE 10
                                    COVENANTS

            SECTION 10.01.  PERFORMANCE UNDER WARRANTS.

            The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Warrants in accordance with the terms of the Warrants and
this Agreement.

            SECTION 10.02.  MAINTENANCE OF OFFICE OR AGENCY.

            The Company will maintain in the Borough of Manhattan, New York City
an office or agency (a "NEW YORK OFFICE") where Certificates may be presented or
surrendered for acquisition of shares of Common Stock upon settlement of the
Warrants on the Warrant Settlement Date or Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or reestablishment of Equity Units and where notices and demands to
or upon the Company in respect of the Securities and this Agreement may be
served. The Company will give prompt written notice to the Warrant Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Warrant Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Company hereby appoints the Warrant Agent as its
agent to receive all such presentations, surrenders, notices and demands.

            The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, New York City for such purposes. The Company will give
prompt written notice to the Warrant Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Warrant Agent at its Corporate Trust
Office as paying agent in such city.

            SECTION 10.03.  COMPANY TO RESERVE COMMON STOCK.

            The Company shall at all times prior to the Warrant Settlement Date
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Stock


                                      -65-
<PAGE>

the full number of shares of Common Stock issuable against tender of payment in
respect of all Warrants constituting a part of the Securities evidenced by
Outstanding Certificates.

            SECTION 10.04.  COVENANTS AS TO COMMON STOCK.

            The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Warrant constituting a part
of the Outstanding Securities will, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable. The Company shall comply, in all material
respects, with all applicable securities laws regulating the offer, issuance and
delivery of shares of Common Stock upon settlement of Warrants and will endeavor
to list such shares on each national securities exchange or automated quotation
system on which the Common Stock is then listed.

            SECTION 10.05.  STATEMENTS OF OFFICERS OF THE COMPANY AS TO DEFAULT.

            The Company will deliver to the Warrant Agent, within 140 days after
the end of each fiscal year of the Company (which as of the date hereof is
December 31) ending after the date hereof, an Officers' Certificate (one of the
signers of which shall be the principal executive officer, principal financial
officer or principal accounting officer of the Company), stating whether or not
to the knowledge of the signers thereof the Company is in default in the
performance and observance of any of the terms, provisions and conditions
hereof, and if the Company shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge.

            SECTION 10.06.  ERISA.

            Each Holder from time to time of the Securities that is a Plan
hereby represents that its acquisition of the Equity Units and the holding of
the same satisfies the applicable fiduciary requirements of ERISA and that it is
entitled to exemption relief from the prohibited transaction provisions of ERISA
and the Code in accordance with one or more prohibited transaction exemptions or
otherwise will not result in a nonexempt prohibited transaction.


                                      -66-
<PAGE>

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

                                        CITIZENS COMMUNICATIONS COMPANY


                                        By:     /s/ Donald B. Armour
                                             -----------------------------------
                                             Name: Donald B. Armour
                                             Title:   Vice President
                                                      Finance and Treasurer

                                        THE CHASE MANHATTAN BANK,
                                        as Warrant Agent

                                        By:     /s/ James D. Heaney
                                             -----------------------------------
                                             Name: James D. Heaney
                                             Title:   Vice President



                                      -67-
<PAGE>

                                                                       EXHIBIT A

                        FACE OF EQUITY UNITS CERTIFICATE

            "THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
WARRANT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A
NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE WARRANT AGREEMENT AND NO TRANSFER
OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE 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) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES DESCRIBED IN THE WARRANT AGREEMENT.

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

No._______________          Cusip No. 17453B 20 0

Number of Equity Units

                         CITIZENS COMMUNICATIONS COMPANY

                                  EQUITY UNITS

            This Equity Units Certificate certifies that Cede & Co. is the
registered Holder of the number of Equity Units set forth above. Each Equity
Unit consists of (i) either (a) the beneficial ownership by the Holder of one
Note (the "NOTE") of Citizens Communications Company, a Delaware corporation
(the "COMPANY"), having a stated principal amount of $25, subject to the Pledge
of such Note by such Holder pursuant to the Pledge Agreement, or (b) upon the
occurrence of a Tax Event Redemption or Successful Initial Remarketing prior to
the Warrant Settlement Date, the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio by such Holder pursuant to the


<PAGE>

Pledge Agreement, and (ii) the rights and obligations of the Holder under one
Warrant with the Company. All capitalized terms used herein which are defined in
the Warrant Agreement (as defined on the reverse hereof) have the meaning set
forth therein.

            Pursuant to the Pledge Agreement, the Notes or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, as the case may be, constituting part of
each Equity Unit evidenced hereby has been pledged to the Collateral Agent, for
the benefit of the Company, to secure the obligations of the Holder under the
Warrant comprising part of such Equity Unit.

            The Pledge Agreement provides that all payments of the principal
amount with respect to any of the Pledged Notes or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, or cash interest payments on any
Pledged Notes (as defined in the Pledge Agreement) or the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio, as the case may be, constituting part of the Equity
Units received by the Collateral Agent or the Securities Intermediary shall be
paid by wire transfer in same day funds (i) in the case of (A) cash interest
payments with respect to Pledged Notes or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, and (B) any payments of the principal
amount with respect to any Notes or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, that have been released from the Pledge
pursuant to the Pledge Agreement, to the Warrant Agent to the account designated
by the Warrant Agent, no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral Agent or the Securities
Intermediary (provided that in the event such payment is received by the
Collateral Agent or the Securities Intermediary on a day that is not a Business
Day or after 12:30 p.m., New York City time, on a Business Day, then such
payment shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day) and (ii) in the case of payments of the principal
amount with respect to any of the Pledged Notes or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, to the Company on the Warrant Settlement Date (as
described herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Equity Units of
which such Pledged Notes or the Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, are a part under the Warrants forming a part of such Equity Units.
Interest payments on any Note or the appropriate Applicable Ownership Interest
(as specified in clause (B) of the definition of such term) of the Treasury
Portfolio, as the case may be, forming part of an Equity Unit evidenced hereby,
which are payable quarterly in arrears on February 17, May 17, August 17 and
November 17, of each year, commencing August 17, 2001 (a "PAYMENT DATE"), shall,
subject to receipt thereof by the Warrant Agent from the Collateral Agent or the
Securities Intermediary, be paid to the Person in whose name this Equity Unit
Certificate (or a Predecessor Equity Unit Certificate) is registered at the
close of business on the Record Date for such Payment Date.

            Each Warrant evidenced hereby obligates the Holder of this Equity
Units Certificate to purchase, and the Company to sell, on August 17, 2004 (the
"WARRANT SETTLEMENT

<PAGE>

DATE"), at a price equal to $25 (the "STATED AMOUNT"), a number of shares of
Common Stock, $0.25 par value ("COMMON STOCK"), of the Company, equal to the
Settlement Rate, unless on or prior to the Warrant Settlement Date there shall
have such occurred a Termination Event or an Early Settlement with respect to
the Equity Unit of which such Warrant is a part, all as provided in the Warrant
Agreement and more fully described on the reverse hereof. The purchase price
(the "PURCHASE PRICE") for the shares of Common Stock purchased pursuant to each
Warrant evidenced hereby, if not paid earlier, shall be paid on the Warrant
Settlement Date by application of payment received in respect of the principal
amount with respect to any Pledged Notes pursuant to the Remarketing or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, pledged
to secure the obligations under such Warrant of the Holder of the Equity Unit of
which such Warrant is a part.

            Interest payments on the Notes and the Applicable Ownership Interest
(as specified in clause (B) of the definition of such term) will be payable at
the office of the Warrant Agent in New York City or, at the option of the
Company, by check mailed to the address of the Person entitled thereto as such
address appears on the Equity Units Register.

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

            Unless the certificate of authentication hereon has been executed by
the Warrant Agent by manual signature, this Equity Units Certificate shall not
be entitled to any benefit under the Pledge Agreement or the Warrant Agreement
or be valid or obligatory for any purpose.

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

                                          Citizens Communications Company

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


                                          HOLDER SPECIFIED ABOVE (as to
                                          obligations of such Holder under the
                                          Warrants)


                                          By: THE CHASE MANHATTAN
                                              BANK,
                                              not individually but solely as
                                              Attorney-in-Fact of such Holder


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

DATED:


<PAGE>



                          CERTIFICATE OF AUTHENTICATION
                                OF WARRANT AGENT

            This is one of the Equity Units Certificates referred to in the
within mentioned Warrant Agreement.

                                          By: THE CHASE MANHATTAN
                                              BANK, as Warrant Agent

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




<PAGE>



                  (FORM OF REVERSE OF EQUITY UNITS CERTIFICATE)

            Each Warrant evidenced hereby is governed by a Warrant Agreement,
dated as of June 19, 2001 (as may be supplemented from time to time, the
"WARRANT AGREEMENT"), between the Company and The Chase Manhattan Bank, as
Warrant Agent (including its successors hereunder, the "WARRANT AGENT"), to
which Warrant Agreement and supplemental agreements thereto reference is hereby
made for a description of the respective rights, limitations of rights,
obligations, duties and immunities thereunder of the Warrant Agent, the Company,
and the Holders and of the terms upon which the Equity Units Certificates are,
and are to be, executed and delivered.

            Unless a Cash Settlement or an Early Settlement has occurred, each
Warrant evidenced hereby obligates the Holder of this Equity Units Certificate
to purchase, and the Company to sell, on the Warrant Settlement Date at a price
equal to the Stated Amount (the "PURCHASE PRICE"), a number of shares of Common
Stock equal to the Settlement Rate, unless, prior to or on the Warrant
Settlement Date, there shall have occurred a Termination Event with respect to
the Security of which such Warrant is a part or an Early Settlement shall have
occurred. The "SETTLEMENT RATE" is equal to:

                  (1) if the Applicable Market Value (as defined below) is
      greater than or equal to $14.52 (the "THRESHOLD APPRECIATION Price"),
      1.7218 shares of Common Stock per Warrant;

                  (2) if the Applicable Market Value is less than the Threshold
      Appreciation Price but greater than $12.10 (the "REFERENCE PRICE"), the
      number of shares of Common Stock per Warrant having a value, based on the
      Applicable Market Value, equal to $25; and

                  (3) if the Applicable Market Value is less than or equal to
      the Reference Price, 2.0661 shares of Common Stock per Warrant,

in each case subject to adjustment as provided in the Warrant Agreement (and in
each case rounded upward or downward to the nearest 1/10,000th of a share).

            No fractional shares of Common Stock will be issued upon settlement
of Warrants, as provided in Section 5.09 of the Warrant Agreement.

            Each Warrant evidenced hereby, which is settled either through Early
Settlement or Cash Settlement, shall obligate the Holder of the related Equity
Unit to purchase at the Purchase Price, and the Company to sell, a number of
shares of Common Stock equal to the Early Settlement Rate or the Settlement
Rate, as applicable.

            The "APPLICABLE MARKET VALUE" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Warrant Settlement Date.

<PAGE>

            The "CLOSING PRICE" per share of Common Stock on any date of
determination means:

                  (1) the closing  sale price (or,  if no closing  price is
      reported,  the last  reported  sale  price)  per  share on The New York
      Stock Exchange, Inc. (the "NYSE") on such date;

                  (2) if Common Stock is not listed for trading on the NYSE on
      any such date, the closing sale price per share as reported in the
      composite transactions for the principal United States securities exchange
      on which Common Stock is so listed;

                  (3) if Common Stock is not so listed on a United States
      national or regional securities exchange, the closing sale price per share
      as reported by The NASDAQ National Market;

                  (4) if Common Stock is not so reported, the last quoted bid
      price for Common Stock in the over-the-counter market as reported by the
      National Quotation Bureau or similar organization; or

                  (5) if such bid price is not available, the average of the
      mid-point of the last bid and ask prices of Common Stock on such date from
      at least three nationally recognized independent investment banking firms
      retained for this purpose by the Company.

            A "TRADING DAY" means a day on which Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of Common Stock.

            In accordance with the terms of the Warrant Agreement, the Holder of
this Equity Units Certificate may pay the Purchase Price for the shares of
Common Stock purchased pursuant to each Warrant evidenced hereby by effecting a
Cash Settlement or an Early Settlement or from the proceeds of the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio or a Remarketing of the related Pledged Notes. Unless
a Tax Event Redemption or a Successful Initial Remarketing has occurred, a
Holder of Equity Units who does not elect to make an effective cash settlement,
on or prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Warrant Settlement Date, or elects to make such Cash
Settlement, but fails to pay such cash on the fourth Business Day immediately
preceding the Warrant Settlement Date, or does not elect to make an effective
Early Settlement, shall pay the Purchase Price for the shares of Common Stock to
be delivered under the related Warrant from the proceeds of the sale of the
related Pledged Notes held by the Collateral Agent. Unless a Tax Event
Redemption or a Successful Initial Remarketing has occurred, such sale will be
made by the Remarketing Agent pursuant to the terms of the Remarketing Agreement
and any supplemental remarketing agreement executed in

<PAGE>

connection therewith between the parties thereto, on the third Business Day
prior to the Warrant Settlement Date.

            The Company shall not be obligated to issue any shares of Common
Stock in respect of a Warrant or deliver any certificates therefor to the Holder
unless it shall have received payment of the aggregate purchase price for the
shares of Common Stock to be purchased thereunder in the manner herein set
forth.

            Each Warrant evidenced hereby and all obligations and rights of the
Company and the Holder thereunder shall terminate if a Termination Event shall
occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Warrant Agent and to the Holders, at their addresses as
they appear in the Security Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Note or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio forming a part of each Equity
Unit from the Pledge. An Equity Unit shall thereafter represent the right to
receive the Note or the appropriate Applicable Ownership Interest of the
Treasury Portfolio forming a part of such Equity Unit in accordance with the
terms of the Warrant Agreement and the Pledge Agreement.

            Under the terms of the Pledge Agreement, the Warrant Agent will be
entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Notes. Upon receipt of notice of any meeting at which holders of
Notes are entitled to vote or upon the solicitation of consents, waivers or
proxies of holders of Notes, the Warrant Agent shall, as soon as practicable
thereafter, mail to the Equity Units Holders a notice:

                  (1) containing such information as is contained in the
      notice or solicitation;

                  (2) stating that each Equity Unit Holder on the Record Date
      set by the Warrant Agent therefor (which, to the extent possible, shall be
      the same date as the Record Date for determining the holders of Notes
      entitled to vote) shall be entitled to instruct the Warrant Agent as to
      the exercise of the voting rights pertaining to the Notes constituting a
      part of such Holder's Equity Unit; and

                  (3) stating the manner in which such instructions may be
      given.

            Upon the written request of the Equity Unit Holders on such Record
Date, the Warrant Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests, the
maximum number of Notes as to which any particular voting instructions are
received. In the absence of specific instructions from the Holder of an Equity
Unit, the Warrant Agent shall abstain from voting the Note evidenced by such
Equity Unit.

            The Notes shall be held by the Securities Intermediary to secure the
obligations of each Holder of Equity Units to purchase shares of Common Stock
under the Warrants constituting a part of such Equity Units.

<PAGE>

            Upon the occurrence of a Tax Event Redemption prior to the Warrant
Settlement Date, the Redemption Price payable on the Tax Event Redemption Date
with respect to the Applicable Amount of Notes shall be delivered to the
Collateral Agent in exchange for the Pledged Notes. Thereafter, pursuant to the
terms of the Pledge Agreement, the Securities Intermediary will apply an amount
equal to the Redemption Amount of such Redemption Price to purchase on behalf of
the Holders of Equity Units, the Treasury Portfolio and promptly (a) transfer
the Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio to the Collateral Account to secure the
obligations of each Holder of Equity Units to purchase shares of Common Stock
under the Warrants constituting a part of such Equity Units, (b) transfer the
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio to the Warrant Agent for the benefit of the
Holders of such Equity Units and (C) remit the remaining portion of such
Redemption Price to the Warrant Agent for payment to the Holders of such Equity
Units.

            Upon the occurrence of a Successful Initial Remarketing, pursuant to
the terms of the Remarketing Agreement, the Remarketing Agent will apply an
amount equal to the Treasury Portfolio Purchase Price to purchase on behalf of
the Holders of Equity Units, the Treasury Portfolio, and, after deducting the
Remarketing Fee to the extent permitted under the terms of the Remarketing
Agreement, promptly remit the remaining portion of such Proceeds of the
Successful Initial Remarketing to the Agent for payment to the Holders of such
Equity Units.

            Following the occurrence of a Tax Event Redemption prior to the
Warrant Settlement Date or following a Successful Initial Remarketing, the
Holders of Equity Units and the Collateral Agent shall have such security
interest rights and obligations with respect to the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio as the Holder of Equity Units and the Collateral Agent had in
respect of the Notes, subject to the Pledge thereof as provided in the Pledge
Agreement and any reference herein to the Notes shall be deemed to be a
reference to such Treasury Portfolio.

            The Equity Units Certificates are issuable only in registered form
and only in denominations of a single Equity Unit and any integral multiple
thereof. The transfer of any Equity Units Certificate will be registered and
Equity Units Certificates may be exchanged as provided in the Warrant Agreement.
The Security Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents permitted by the Warrant
Agreement. No service charge shall be required for any such registration of
transfer or exchange, but the Company and the Warrant Agent may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. A Holder who elects to substitute a Treasury Security for
Notes, thereby creating Treasury Equity Units, shall be responsible for any fees
or expenses payable in connection therewith. Except as provided in the Warrant
Agreement, for so long as the Warrant underlying an Equity Unit remains in
effect, such Equity Unit shall not be separable into its constituent parts, and
the rights and obligations of the Holder of such Equity Unit in respect of the
Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and Warrant constituting such Equity Unit may be
transferred and exchanged only as an Equity Unit.

            The Holder of Equity Units may substitute for the Pledged Notes,
securing such Holder's obligations under the related Warrants, Treasury
Securities in an aggregate principal

<PAGE>

amount equal to the aggregate principal amount of the Pledged Notes, in
accordance with the terms of the Warrant Agreement and the Pledge Agreement.
From and after such Collateral Substitution, each Security for which such
Pledged Treasury Securities secures the Holder's obligation under the Warrant
shall be referred to as a "TREASURY EQUITY UNIT". A Holder may make such
Collateral Substitution only in integral multiples of 40 Equity Units for 40
Treasury Equity Units. Such Collateral Substitution may cause the equivalent
aggregate Stated Amount of this Certificate to be increased or decreased;
provided, however, the equivalent aggregate Stated Amount outstanding under this
Equity Units Certificate shall not exceed $500,000,000. All such adjustments to
the equivalent aggregate Stated Amount of this Equity Units Certificate shall be
duly recorded by placing an appropriate notation on the Schedule attached
hereto.

            A Holder of Treasury Equity Units may recreate Equity Units by
delivering to the Collateral Agent Notes, equal to the aggregate principal
amount of the Pledged Treasury Securities in exchange for the release of such
Pledged Treasury Securities in accordance with the terms of the Warrant
Agreement and the Pledge Agreement. A Holder may recreate Equity Units in
integral multiples of 40 Treasury Equity Units for 40 Equity Units; provided,
however, that if a Tax Event Redemption or a Successful Initial Remarketing has
occurred and the Treasury Portfolio has become a component of the Equity Units,
a Holder may not make such substitution.

            The Warrants and all obligations and rights of the Company and the
Holders thereunder, including, without limitation, the rights and obligations of
Holders to purchase Common Stock, shall immediately and automatically terminate,
without the necessity of any notice or action by any Holder, the Warrant Agent
or the Company, if, on or prior to the Warrant Settlement Date, a Termination
Event shall have occurred. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days thereafter
give written notice to the Warrant Agent, the Collateral Agent and the Holders,
at their addresses as they appear in the Security Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the Notes
or the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be, from
the Pledge in accordance with the provisions of the Pledge Agreement.

            Subject to and upon compliance with the provisions of the Warrant
Agreement, at the option of the Holder thereof, Warrants underlying Securities
may be settled early ("EARLY SETTLEMENT") as provided in the Warrant Agreement;
provided, however, that if a Tax Event Redemption or a Successful Initial
Remarketing has occurred and the Treasury Portfolio has become a component of
the Equity Units, Holders may not make an Early Settlement of their Equity
Units. In order to exercise the right to effect Early Settlement with respect to
any Warrants evidenced by this Equity Units Certificate, the Holder of this
Equity Units Certificate shall deliver to the Warrant Agent at the Corporate
Trust Office an Election to Settle Early form set forth below and any other
documents requested by the Warrant Agent duly completed and accompanied by
payment in the form of immediately available funds payable to the order of the
Company in an amount (the "EARLY SETTLEMENT AMOUNT") equal to the product of (A)
$25 times (B) the number of Warrants with respect to which the Holder has
elected to effect Early Settlement.

            Upon Early Settlement of Warrants by a Holder of the related
Securities, the Pledged Notes underlying such Securities shall be released from
the Pledge as provided in the

<PAGE>

Pledge Agreement and the Holder shall be entitled to receive a number of shares
of Common Stock on account of each Warrant forming part of an Equity Unit as to
which Early Settlement is effected equal to 1.7218 shares of Common Stock per
Warrant (the "EARLY SETTLEMENT RATE"). The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Warrant Agreement.

            Upon registration of transfer of this Equity Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Warrant Agent pursuant to
the Warrant Agreement), under the terms of the Warrant Agreement and the
Warrants evidenced hereby and the transferor shall be released from the
obligations under the Warrants evidenced by this Equity Units Certificate. The
Company covenants and agrees, and the Holder, by its acceptance hereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph. BY YOUR
ACCEPTANCE OF THIS EQUITY UNITS CERTIFICATE, YOU AGREE THAT (1) YOU WILL TREAT
THE WARRANTS FOR ALL UNITED STATES TAX PURPOSES AS A FORWARD PURCHASE CONTRACT
FOR SHARES OF COMMON STOCK, AND (2) YOU WILL NOT TAKE ANY POSITION THAT IS
INCONSISTENT WITH THE FOREGOING TREATMENT IN ANY TAX RETURN OR OTHER DOCUMENT
FILED WITH ANY TAXING AUTHORITY, EXCEPT AS OTHERWISE REQUIRED BY LAW.

            The Holder of this Equity Units Certificate, by its acceptance
hereof, authorizes the Warrant Agent to enter into and perform the related
Warrants forming part of the Equity Units evidenced hereby on its behalf as its
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Warrants by the Company or its trustee in the event that the
Company becomes the subject of a case under the Bankruptcy Code, agrees to be
bound by the terms and provisions thereof, covenants and agrees to perform his
obligations under such Warrants, consents to the provisions of the Warrant
Agreement, authorizes the Warrant Agent to enter into and perform the Warrant
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Notes or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, underlying this Equity Units Certificate
pursuant to the Pledge Agreement. The Holder further covenants and agrees that,
to the extent and in the manner provided in the Warrant Agreement and the Pledge
Agreement, but subject to the terms thereof, payments in respect to the
aggregate principal amount of the Pledged Notes or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, on the Warrant Settlement Date
shall be paid by the Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Warrant and such Holder shall acquire no right,
title or interest in such payments.

            Subject to certain exceptions, the provisions of the Warrant
Agreement may be amended with the consent of the Holders of a majority of the
Warrants.

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

            The Company, the Warrant Agent and its Affiliates and any agent of
the Company or the Warrant Agent may treat the Person in whose name this Equity
Units Certificate is registered as the owner of the Equity Units evidenced
hereby for the purpose of receiving interest payments payable quarterly on the
Notes or interest on the maturing quarterly interest

<PAGE>

strips of the Treasury Portfolio, as applicable, and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the Warrant
Agent nor any such agent shall be affected by notice to the contrary.

            The Warrants shall not, prior to the settlement thereof, entitle the
Holder to any of the rights of a holder of shares of Common Stock.

            A copy of the Warrant Agreement is available for inspection at the
Corporate Trust Office of the Warrant Agent.


<PAGE>



                                  ABBREVIATIONS

            The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:

TEN COM:                      tenants in common

UNIF GIFT MIN ACT:                              Custodian
                              ------------                  ------------------
                                   (cust)                         (minor)

                              Under Uniform Gifts to Minors Act of _____________

TENANT:                       as tenants by the entireties

JT TEN:                       as joint tenants with right of survivorship and
                              not as tenants in common

Additional abbreviations may also be used though not in the above list.

            FOR VALUE  RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
               (Please insert Social Security or Taxpayer I.D. or
                      other Identifying Number of Assignee)

________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Equity Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney ______________, to transfer
said Equity Units Certificates on the books of Citizens Communications Company
with full power of substitution in the premises.


Dated:__________________           Signature___________________________________
                                            NOTICE: The signature to this
                                            assignment must correspond with the
                                            name as it appears upon the face of
                                            the within Equity Units Certificates
                                            in every particular, without
                                            alteration or enlargement or any
                                            change whatsoever.


      Signature Guarantee: _________________________________


<PAGE>



                             SETTLEMENT INSTRUCTIONS

            The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon settlement on or after the Warrant Settlement Date
of the Warrants underlying the number of Equity Units evidenced by this Equity
Units Certificate be registered in the name of, and delivered, together with a
check in payment for any fractional share, to the undersigned at the address
indicated below unless a different name and address have been indicated below.
If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.

Dated: _________________                  ______________________________________
                                          Signature
                                          Signature Guarantee:__________________
                                          (if assigned to another person)

If shares are to be registered in the
name of and delivered to a Person other   REGISTERED HOLDER
than the Holder, please (i) print such
Person's name and address and (ii)        Please print name and address of
provide a guarantee of your signature:    Registered Holder:


______________________________________    ______________________________________
Name                                      Name

______________________________________    ______________________________________
Address                                   Address


______________________________________    ______________________________________

______________________________________    ______________________________________

______________________________________    ______________________________________

Social Security or other
Taxpayer Identification
Number, if any                            ______________________________________


<PAGE>



                            ELECTION TO SETTLE EARLY

            The undersigned Holder of this Equity Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Warrant Agreement with respect to the Warrants underlying the
number of Equity Units evidenced by this Equity Units Certificate specified
below. The option to effect Early Settlement may be exercised only with respect
to Warrants underlying Equity Units with an aggregate Stated Amount equal to
$1,000 or an integral multiple thereof; provided, however, that if a Tax Event
Redemption or a Successful Initial Remarketing has occurred and the Treasury
Portfolio has become a component of the Equity Units, Holders may not early
settle Equity Units. The undersigned Holder directs that a certificate for
shares of Common Stock deliverable upon such Early Settlement be registered in
the name of, and delivered, together with a check in payment for any fractional
share and any Equity Units Certificate representing any Equity Units evidenced
hereby as to which Early Settlement of the related Warrants is not effected, to
the undersigned at the address indicated below unless a different name and
address have been indicated below. Pledged Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, deliverable
upon such Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.

Dated: _______________________                  ________________________________
                                                        Signature

Signature Guarantee: ___________________________


            Number of Securities evidenced hereby as to which Early Settlement
of the related Warrants is being elected:

If shares of Common Stock or Equity       REGISTERED HOLDER
Units Certificates are to be registered
in the name of and delivered to and
Pledged Notes, or the
Applicable Ownership Interest of the
Treasury Portfolio, as the case may be,
are to be transferred to a Person other
than the Holder, please print such
Person's name and address:

                                          Please print name and address of
                                          Registered Holder:

______________________________________    ______________________________________
Name                                      Name

______________________________________    ______________________________________

<PAGE>

Address                                   Address

______________________________________    ______________________________________

______________________________________    ______________________________________

______________________________________    ______________________________________

Social Security or other
Taxpayer Identification
Number, if any                            ______________________________________




<PAGE>



Transfer Instructions for Pledged Notes or the Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, transferable upon Early Settlement
or a Termination Event:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________





<PAGE>



                     [TO BE ATTACHED TO GLOBAL CERTIFICATES]
            SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

The following increases or decreases in this Global Certificate have been made:

<TABLE>
<CAPTION>

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

                                                 Number of
                 Amount of       Amount of       Equity Units
                 increase in     decrease in     evidenced by    Signature of
                 Number of       Number of       this Global     authorized
                 Equity Units    Equity Units    Certificate     officer of
                 evidenced by    evidenced by    following such  Warrant Agent
                 the Global      the Global      decrease or     or Securities
Date             Certificate     Certificate     increase        Custodian


- ---------------------------------------------------------------------------------
<S>              <C>             <C>             <C>             <C>

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

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

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

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

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

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

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

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

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

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

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

- ---------------------------------------------------------------------------------
</TABLE>


<PAGE>

                                                                       EXHIBIT B

                       FACE OF TREASURY EQUITY CERTIFICATE

            "THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
WARRANT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A
NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE WARRANT AGREEMENT AND NO TRANSFER
OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE 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) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES DESCRIBED IN THE WARRANT AGREEMENT.

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

No.__________________                                    Cusip No. 17453B 30 9
Number of Treasury Equity Units

                         CITIZENS COMMUNICATIONS COMPANY
                              TREASURY EQUITY UNITS

            This Treasury Equity Units Certificate certifies that Cede & Co. is
the registered Holder of the number of Treasury Equity Units set forth above.
Each Treasury Equity Unit consists of (i) a 1/40 undivided beneficial ownership
interest of a Treasury Security having a principal amount at maturity equal to
$1,000, subject to the Pledge of such Treasury Security by such Holder pursuant
to the Pledge Agreement, and (ii) the rights and obligations of the Holder under
one Warrant with Citizens Communications Company, a Delaware corporation (the
"COMPANY"). All capitalized terms used herein which are defined in the Warrant
Agreement (as defined on the reverse hereof) have the meaning set forth therein.

            Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Treasury Equity Unit evidenced hereby have been
pledged to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Warrant comprising

<PAGE>

part of such Treasury Equity Unit. Each Warrant evidenced hereby obligates the
Holder of this Treasury Equity Units Certificate to purchase, and the Company,
to sell, on August 17, 2004, at a price equal to $25 (the "STATED AMOUNT"), a
number of shares of Common Stock, $0.25 par value ("Common Stock"), of the
Company, equal to the Settlement Rate, unless prior to or on the Warrant
Settlement Date there shall have occurred a Termination Event or an Early
Settlement with respect to the Treasury Equity Unit of which such Warrant is a
part, all as provided in the Warrant Agreement and more fully described on the
reverse hereof. The purchase price (the "PURCHASE PRICE") for the shares of
Common Stock purchased pursuant to each Warrant evidenced hereby, if not paid
earlier, shall be paid on the Warrant Settlement Date by application of the
proceeds from the Treasury Securities at maturity pledged to secure the
obligations of the Holder under such Warrant of the Treasury Equity Unit of
which such Warrant is a part.

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

            Unless the certificate of authentication hereon has been executed by
the Warrant Agent by manual signature, this Treasury Equity Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Warrant
Agreement or be valid or obligatory for any purpose.

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

                                          Citizens Communications Company

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


                                          HOLDER SPECIFIED ABOVE (as to
                                          obligations of such Holder under the
                                          Warrants)


                                          By: THE CHASE MANHATTAN BANK,
                                              not individually but solely as
                                              Attorney-in-Fact of such Holder


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

DATED:


<PAGE>



                        CERTIFICATE OF AUTHENTICATION OF
                                  WARRANT AGENT

            This is one of the Treasury Equity Units referred to in the
within-mentioned Warrant Agreement.

                                          By: THE CHASE MANHATTAN BANK,
                                              as Warrant Agent

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



<PAGE>



                 (REVERSE OF TREASURY EQUITY UNITS CERTIFICATE)

            Each Warrant evidenced hereby is governed by a Warrant Agreement,
dated as of June 19, 2001 (as may be supplemented from time to time, the
"WARRANT AGREEMENT") between the Company and The Chase Manhattan Bank, as
Warrant Agent (including its successors thereunder, herein called the "WARRANT
AGENT"), to which the Warrant Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective rights, limitations
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
the Company and the Holders and of the terms upon which the Treasury Equity
Units Certificates are, and are to be, executed and delivered.

            Unless a Cash Settlement or an Early Settlement has occurred, each
Warrant evidenced hereby obligates the Holder of this Treasury Equity Units
Certificate to purchase, and the Company to sell, on the Warrant Settlement Date
at a price equal to the Stated Amount (the "PURCHASE PRICE") a number of shares
of Common Stock equal to the Settlement Rate, unless prior to the Warrant
Settlement Date, there shall have occurred a Termination Event with respect to
the Security of which such Warrant is a part or an Early Settlement shall have
occurred. The "SETTLEMENT RATE" is equal to:

                  (1) if the Applicable Market Value (as defined below) is
      greater than or equal to $14.52 (the "THRESHOLD APPRECIATION Price"),
      1.7218 shares of Common Stock per Warrant;

                  (2) if the Applicable Market Value is less than the Threshold
      Appreciation Price but greater than $12.10 (the "REFERENCE PRICE"), the
      number of shares of Common Stock per Warrant having a value, based on the
      Applicable Market Value, equal to $25; and

                  (3) if the Applicable Market Value is less than or equal to
      the Reference Price, then 2.0661 shares of Common Stock per Warrant,

in each case subject to adjustment as provided in the Warrant Agreement (and in
each case rounded upward or downward to the nearest 1/10,000th of a share).

            No fractional shares of Common Stock will be issued upon settlement
of Warrants, as provided in Section 5.09 of the Warrant Agreement.

            Each Warrant evidenced hereby, which is settled either through Early
Settlement or Cash Settlement, shall obligate the Holder of the related Treasury
Equity Unit to purchase at the Purchase Price for cash, and the Company to sell,
a number of shares of Common Stock equal to the Early Settlement Rate or the
Settlement Rate, as applicable.

            The "APPLICABLE MARKET VALUE" means the average of the Closing
Prices per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Warrant Settlement
Date.

<PAGE>

            The "CLOSING PRICE" per share of Common Stock on any date of
determination means the:

                  (1) closing sale price (or, if no closing price is reported,
      the last reported sale price) per share on the New York Stock Exchange,
      Inc. (the "NYSE") on such date;

                  (2) if the Common Stock is not listed for trading on the NYSE
      on any such date, the closing sale price per share as reported in the
      composite transactions for the principal United States securities exchange
      on which the Common Stock is so listed;

                  (3) if the Common Stock is not so listed on a United States
      national or regional securities exchange, the closing sale price per share
      as reported by The NASDAQ National Market;

                  (4) if the Common Stock is not so reported, the last quoted
      bid price for the Common Stock in the over-the-counter market as reported
      by the National Quotation Bureau or similar organization; or

                  (5) if such bid price is not available, the average of the
      mid-point of the last bid and ask prices of the Common Stock on such date
      from at least three nationally recognized independent investment banking
      firms retained for this purpose by the Company.

            A "TRADING DAY" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.

            In accordance with the terms of the Warrant Agreement, the Holder of
this Treasury Equity Unit shall pay the Purchase Price for the shares of the
Common Stock purchased pursuant to each Warrant evidenced hereby either by
effecting a Cash Settlement or an Early Settlement of each such Warrant or by
applying a principal amount of the Pledged Treasury Securities underlying such
Holder's Treasury Equity Unit equal to the Stated Amount of such Warrant to the
purchase of the Common Stock. A Holder of Treasury Equity Unit who does not
effect, prior to 5:00 p.m. (New York City time) on the second Business Day
immediately preceding the Warrant Settlement Date, an Early Settlement, shall
pay the Purchase Price for the shares of Common Stock to be issued under the
related Warrant from the proceeds of the Pledged Treasury Securities.

            The Company shall not be obligated to issue any shares of Common
Stock in respect of a Warrant or deliver any certificates therefor to the Holder
unless it shall have received payment of the aggregate purchase price for the
shares of Common Stock to be purchased thereunder in the manner herein set
forth.

<PAGE>

            Each Warrant evidenced hereby and all obligations and rights of the
Company and the Holder thereunder shall terminate if a Termination Event shall
occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Warrant Agent and to the Holders, at their addresses as
they appear in the Treasury Equity Units Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the Pledged Treasury
Securities (as defined in the Pledge Agreement) forming a part of each Treasury
Equity Unit. A Treasury Equity Unit shall thereafter represent the right to
receive the interest in the Treasury Security forming a part of such Treasury
Equity Unit, in accordance with the terms of the Warrant Agreement and the
Pledge Agreement.

            The Treasury Equity Units Certificates are issuable only in
registered form and only in denominations of a single Treasury Equity Unit and
any integral multiple thereof. The transfer of any Treasury Equity Certificate
will be registered and Treasury Equity Certificates may be exchanged as provided
in the Warrant Agreement. The Treasury Equity Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
permitted by the Warrant Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Warrant Agent
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. A Holder who elects to substitute Notes,
for Treasury Securities, thereby recreating Equity Units, shall be responsible
for any fees or expenses associated therewith. Except as provided in the Warrant
Agreement, for so long as the Warrant underlying a Treasury Equity Unit remains
in effect, such Treasury Equity Unit shall not be separable into its constituent
parts, and the rights and obligations of the Holder of such Treasury Equity Unit
in respect of the Treasury Security and the Warrant constituting such Treasury
Equity Unit may be transferred and exchanged only as a Treasury Equity Unit.

            A Holder of Treasury Equity Units may recreate Equity Units by
delivering to the Collateral Agent, Notes with a principal amount equal to the
aggregate principal amount at maturity of the Pledged Treasury Securities in
exchange for the release of such Pledged Treasury Securities in accordance with
the terms of the Warrant Agreement and the Pledge Agreement. From and after such
substitution, the Holder's Security shall be referred to as a "Equity UNIT". Any
such creation of Equity Units may be effected in multiples of 40 Treasury Equity
Units for 40 Equity Units; provided, however, that if a Tax Event Redemption or
a Successful Initial Remarketing has occurred and the Treasury Portfolio has
become a component of the Equity Units, a Holder may not make such substitution.
Such substitution may cause the equivalent aggregate Stated Amount of this
Certificate to be increased or decreased; provided, however, the equivalent
aggregate Stated Amount outstanding under this Treasury Units Certificate shall
not exceed $500,000,000. All such adjustments to the equivalent aggregate Stated
Amount of this Equity Units Certificate shall be duly recorded by placing an
appropriate notation on the Schedule attached hereto.

            A Holder of Equity Units may recreate Treasury Equity Units by
delivering to the Collateral Agent Treasury Securities in an aggregate principal
amount at maturity of the Pledged Notes, as the case may be, in accordance with
the terms of the Warrant Agreement and the Pledge Agreement. Any such recreation
of Treasury Equity Units may be effected only in multiples of 40 Equity Units
for 40 Treasury Equity Units; provided, however, if a Tax Event

<PAGE>

Redemption or a Successful Initial Remarketing has occurred and the Treasury
Portfolio has become a component of the Equity Unit, a Holder may not make such
Collateral Substitution.

            The Warrants and all obligations and rights of the Company and the
Holders thereunder, including, without limitation, the rights and obligations of
Holders to purchase Common Stock, shall immediately and automatically terminate,
without the necessity of any notice or action by any Holder, the Warrant Agent
or the Company, if, on or prior to the Warrant Settlement Date, a Termination
Event shall have occurred. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days thereafter
give written notice to the Warrant Agent, the Collateral Agent and the Holders,
at their addresses as they appear in the Security Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the
Treasury Securities from the Pledge in accordance with the provisions of the
Pledge Agreement. A Treasury Equity Unit shall thereafter represent the right to
receive the interest in the Treasury Security forming a part of such Treasury
Equity Unit, in accordance with the terms of the Warrant Agreement and the
Pledge Agreement.

            Subject to and upon compliance with the provisions of the Warrant
Agreement, at the option of the Holder thereof, Warrants underlying Securities
may be settled early ("EARLY SETTLEMENT") as provided in the Warrant Agreement.
In order to exercise the right to effect Early Settlement with respect to any
Warrants evidenced by this Treasury Equity Unit, the Holder of this Treasury
Equity Units Certificate shall deliver to the Warrant Agent at the Corporate
Trust Office an Election to Settle Early form set forth below and any other
documents requested by the Warrant Agent duly completed and accompanied by
payment in the form of immediately available funds payable to the order of the
Company in an amount (the "EARLY SETTLEMENT AMOUNT") equal to the product of (A)
$25 times (B) the number of Warrants with respect to which the Holder has
elected to effect Early Settlement.

            Upon Early Settlement of Warrants by a Holder of the related
Securities, the Pledged Treasury Securities underlying such Securities shall be
released from the Pledge as provided in the Pledge Agreement and the Holder
shall be entitled to receive a number of shares of Common Stock on account of
each Warrant forming part of a Treasury Equity Unit as to which Early Settlement
is effected equal to 1.7218 shares of Common Stock per Warrant (the "EARLY
SETTLEMENT RATE"). The Early Settlement Rate shall be adjusted in the same
manner and at the same time as the Settlement Rate is adjusted as provided in
the Warrant Agreement.

            Upon registration of transfer of this Treasury Equity Certificate,
the transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Warrant Agent pursuant
to the Warrant Agreement), under the terms of the Warrant Agreement and the
Warrants evidenced hereby and the transferor shall be released from the
obligations under the Warrants evidenced by this Treasury Equity Units
Certificate. The Company covenants and agrees, and the Holder, by its acceptance
hereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph. BY YOUR ACCEPTANCE OF THIS TREASURY EQUITY UNITS CERTIFICATE, YOU
AGREE THAT (1) YOU WILL TREAT THE WARRANTS FOR ALL UNITED STATES TAX PURPOSES AS
A FORWARD PURCHASE CONTRACT FOR SHARES OF COMMON STOCK, AND (2) YOU WILL NOT
TAKE ANY POSITION THAT IS INCONSISTENT WITH THE FOREGOING TREATMENT ON ANY TAX
RETURN OR OTHER DOCUMENT FILED WITH ANY TAXING AUTHORITY, EXCEPT AS OTHERWISE
REQUIRED BY LAW.

<PAGE>

            The Holder of this Treasury Equity Units Certificate, by its
acceptance hereof, authorizes the Warrant Agent to enter into and perform the
related Warrants forming part of the Treasury Equity Units evidenced hereby on
its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Warrants by the Company or its trustee in
the event that the Company becomes the subject of a case under the Bankruptcy
Code, agrees to be bound by the terms and provisions thereof, covenants and
agrees to perform its obligations under such Warrants, consents to the
provisions of the Warrant Agreement, authorizes the Warrant Agent to enter into
and perform the Warrant Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Treasury Equity Units Certificate pursuant to the Pledge
Agreement. The Holder further covenants and agrees, that, to the extent and in
the manner provided in the Warrant Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect to the aggregate principal
amount of the Pledged Treasury Securities on the Warrant Settlement Date shall
be paid by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Warrant and such Holder shall acquire no right, title or
interest in such payments.

            Subject to certain exceptions, the provisions of the Warrant
Agreement may be amended with the consent of the Holders of a majority of the
Warrants.

            The Warrants shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.

            The Company, the Warrant Agent and its Affiliates and any agent of
the Company or the Warrant Agent may treat the Person in whose name this
Treasury Equity Units Certificate is registered as the owner of the Treasury
Equity Units evidenced hereby for the purpose of receiving payments of interest
on the Treasury Securities, performance of the Warrants and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Warrant Agent nor any such agent shall be affected by notice to the contrary.

            The Warrants shall not, prior to the settlement thereof, entitle the
Holder to any of the rights of a holder of shares of Common Stock.

            A copy of the Warrant Agreement is available for inspection at the
Corporate Trust Office of the Warrant Agent.


<PAGE>



                                  ABBREVIATIONS

            The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:

TEN COM:                as tenants in common

UNIF GIFT MIN ACT:                        Custodian
                        ------------                  ------------------
                             (cust)                         (minor)
                        Under Uniform Gifts to Minors Act of
                                                             -----------------

TENANT:                 as tenants by the entireties

JT TEN:                 as joint tenants with right of survivorship and not as
                        tenants in common

Additional abbreviations may also be used though not in the above list.

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

            FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
                 (Please insert Social Security or Taxpayer I.D. or other
                 Identifying Number of Assignee)

________________________________________________________________________________
  (Please Print or Type Name and Address Including Postal Zip Code of Assignee)

the within Equity Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to transfer
said Equity Units Certificates on the books of Citizens Communications Company
with full power of substitution in the premises.

Dated: _______________________      Signature ______________________________

                                    NOTICE: The signature to this assignment
                                    must correspond with the name as it appears
                                    upon the face of the within Equity Units
                                    Certificates in every particular, without
                                    alteration or enlargement or any change
                                    whatsoever.

Signature Guarantee:
                     ---------------------------------


<PAGE>



                             SETTLEMENT INSTRUCTIONS

            The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon settlement on or after the Warrant Settlement Date
of the Warrants underlying the number of Equity Units evidenced by this Equity
Units Certificate be registered in the name of, and delivered, together with a
check in payment for any fractional share, to the undersigned at the address
indicated below unless a different name and address have been indicated below.
If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.

Dated: _______________________            ______________________________________
                                          Signature
                                          Signature Guarantee:__________________
                                          (if assigned to another person)

If shares are to be registered in the
name of and delivered to a Person other   REGISTERED HOLDER
than the Holder, please (i) print
such Person's name and address and        Please print name and address of
(ii) provide a guarantee of               Registered Holder:
your signature:

_____________________________________     ______________________________________
Name                                      Name

_____________________________________     ______________________________________
Address                                   Address

_____________________________________     ______________________________________

_____________________________________     ______________________________________

_____________________________________     ______________________________________

Social Security or other
Taxpayer Identification
Number, if any                            ______________________________________



<PAGE>



                            ELECTION TO SETTLE EARLY

            The undersigned Holder of this Treasury Equity Units Certificate
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Warrant Agreement with respect to the Warrants underlying the
number of Treasury Equity Units evidenced by this Treasury Equity Units
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Warrants underlying Treasury Equity with an
aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Treasury Equity Units Certificate representing any Treasury Equity Units
evidenced hereby as to which Early Settlement of the related Warrants is not
effected, to the undersigned at the address indicated below unless a different
name and address have been indicated below. Pledged Treasury Securities
deliverable upon such Early Settlement will be transferred in accordance with
the transfer instructions set forth below. If shares are to be registered in the
name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.

Dated: _______________________            ______________________________________
                                          Signature

Signature Guarantee: ___________________________




<PAGE>



            Number of Securities evidenced hereby as to which Early Settlement
of the related Warrants is being elected:

If shares of Common Stock of Treasury     REGISTERED HOLDER
Equity Units Certificates are to be
registered in the name of and delivered
to and Pledged Treasury Securities are
to be transferred to a Person other
than the Holder, please print
such Person's name and address:

                                          Please print name and address of
                                          Registered Holder:

______________________________________    ______________________________________
Name                                      Name

______________________________________    ______________________________________
Address                                   Address

______________________________________    ______________________________________

______________________________________    ______________________________________

______________________________________    ______________________________________

Social Security or other
Taxpayer Identification
Number, if any                            ______________________________________




<PAGE>



Transfer Instructions for Pledged Notes or the Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, transferable upon Early Settlement
or a Termination Event:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________





<PAGE>



                     [TO BE ATTACHED TO GLOBAL CERTIFICATES]
            SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

The following increases or decreases in this Global Certificate have been made:

<TABLE>
<CAPTION>

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

                                                 Number of
                 Amount of       Amount of       Treasury
                 increase in     decrease in     Equity Units    Signature of
                 Number of       Number of       evidenced by    authorized
                 Treasury        Treasury        this Global     officer of
                 Equity Units    Equity Units    Certificate     Warrant Agent
                 evidenced by    evidenced by    following such  or Securities
Date             the Global      the Global      decrease or     Custodian
                 Certificate     Certificate     increase

- ---------------------------------------------------------------------------------
<S>              <C>             <C>             <C>             <C>

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

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

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

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

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

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

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

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

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

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

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

- ---------------------------------------------------------------------------------
</TABLE>



<PAGE>

                                                                      EXHIBIT C

                          INSTRUCTION TO WARRANT AGENT

The Chase Manhattan Bank, as Warrant Agent
450 West 33rd Street
New York, New York 10001
Attention:  Institutional Trust Services


            Re:   [_______  Equity Units] [_______ Treasury Equity Units] of
Citizens Communications Company, a Delaware corporation (the "COMPANY").

            The undersigned Holder hereby notifies you that it has delivered to
(a) The Bank of New York, as Collateral Agent $____ aggregate principal amount
of Notes or (b) The Bank of New York, as Securities Intermediary, for credit to
the Collateral Account, $_____ aggregate amount of Treasury Securities or
security entitlements with respect thereto in exchange for the [Pledged Notes]
[Pledged Treasury Securities] held in the Collateral Account, in accordance with
the Pledge Agreement, dated as of June 19, 2001 (the "PLEDGE AGREEMENT"; unless
otherwise defined herein, terms defined in the Pledge Agreement are used herein
as defined therein), between you, the Company, the Collateral Agent, the
Securities Intermediary and the Custodial Agent. The undersigned Holder has paid
all applicable fees relating to such exchange. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Notes] [Pledged Notes] [Pledged Treasury
Securities] related to such [Equity Units] [Treasury Equity Units].

Dated: _______________________            ______________________________________
                                          Signature

                  Signature Guarantee: ____________________________\

_______________________________
TRADES Account No. of Holder

_______________________________
DTC Account No. of Holder



                                      C-1
<PAGE>



Please print name and address of Registered Holder:

____________________________________      ______________________________________
Name                                      Social Security or other Taxpayer
                                          Identification Number, if any
Address

_____________________________________

_____________________________________

_____________________________________



                                      C-2
<PAGE>

                                                                       EXHIBIT D

                            NOTICE FROM WARRANT AGENT
                                   TO HOLDERS

         (Transfer of Collateral upon Occurrence of a Termination Event)


[HOLDER]

_______________________________
_______________________________
Attention:
Telecopy: _____________________

            Re:   [__________ Equity  Units][______ Treasury Equity Units] of
                  Citizens Communications Company, a Delaware corporation (the
                  "COMPANY").

            Please refer to the Warrant Agreement, dated as of June 19, 2001
(the "WARRANT AGREEMENT"; unless otherwise defined herein, terms defined in the
Warrant Agreement are used herein as defined therein), between the Company and
the undersigned, as Warrant Agent and as attorney-in-fact for the holders of
Equity Units and Treasury Equity Units from time to time.

            We hereby notify you that a Termination Event has occurred and that
[the Notes][the Treasury Securities] [Applicable Ownership Interest in the
Treasury Portfolio] underlying your ownership interest in _____ [Equity Units]
[Treasury Equity Units] have been released and are being held by us for your
account pending receipt of transfer instructions with respect to such
[Notes][Treasury Securities] [Applicable Ownership Interest in the Treasury
Portfolio] (the "RELEASED SECURITIES").

            Pursuant to Section 3.15 of the Warrant Agreement, we hereby request
written transfer instructions with respect to the Released Securities. Upon
receipt of your instructions and upon transfer to us of your [Equity
Units][Treasury Equity Units] effected through book-entry or by delivery to us
of your [Equity Units Certificate][Treasury Equity Units Certificate], we shall
transfer the Released Securities by book-entry transfer or other appropriate
procedures, in accordance with your instructions. In the event you fail to
effect such transfer or delivery, the Released Securities and any interest
payments thereon, shall be held in our name, or a nominee in trust for your
benefit, until such time as such [Equity Units][Treasury Equity Units] are
transferred or your [Equity Units Certificate] [Treasury Equity Units
Certificate] is surrendered or satisfactory evidence is provided that such
[Equity Units Certificate][Treasury Equity Units Certificate] has been
destroyed, lost or stolen, together with any indemnification that we or the
Company may require.

Date: __________________                  By:  THE CHASE MANHATTAN BANK, as
                                               Warrant Agent


                                      D-1
<PAGE>

                                               _________________________________
                                               Name:
                                               Title: Authorized Signatory



                                      D-2
<PAGE>

                                                                      EXHIBIT E

                           NOTICE TO SETTLE WITH CASH



The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention:  Institutional Trust Services

Re:   [_______ Equity Units] [_______ Treasury Equity Units] of Citizens
      Communications Company, a Delaware corporation (the "COMPANY").

            The undersigned Holder hereby irrevocably notifies you in accordance
with Section of the Warrant Agreement, dated as of June 19, 2001 (the "WARRANT
AGREEMENT"; unless otherwise defined herein, terms defined in the Warrant
Agreement are used herein as defined therein), between the Company and you, as
Warrant Agent and as Attorney-in-Fact for the Holders of the Warrants, that such
Holder has elected to pay to the Securities Intermediary for deposit in the
Collateral Account, prior to or on 5:00 p.m. (New York City time) on the
[fourth] [second] Business Day immediately preceding the Warrant Settlement Date
(in lawful money of the United States wire transfer, in immediately available
funds), $______ as the Purchase Price for the shares of Common Stock issuable to
such Holder by the Company under the related Warrants on the Warrant Settlement
Date. The undersigned Holder hereby instructs you to notify promptly the
Collateral Agent of the undersigned Holders' election to make such cash
settlement with respect to the Warrants related to such Holder's [Equity Units]
[Treasury Equity Units].

Dated: _______________________            ______________________________________
                                          Signature

                  Signature Guarantee: _________________________________

Please print name and address of Registered Holder:



                                      E-1
<PAGE>

                                                                       EXHIBIT F

                            NOTICE FROM WARRANT AGENT
                     TO REMARKETING AGENT, COLLATERAL AGENT
                      AND INDENTURE TRUSTEE AND THE COMPANY
                   (Settlement of Warrant through Remarketing)


Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York  10036
Attention:  Equity Capital Markets Syndicate Desk
Telecopy: (212) 761-0538

The Bank of New York
101 Barclay Street
New York, New York 10004
Attention: Corporate Trust Administration
             - Corporate Finance Unit
Telecopy: (212) 815-5915

Citizens Communications Company
3 High Ridge Park
Stamford, Connecticut 06905
Telecopier No.: (203) 614-4651
Attention: Secretary & Treasurer

The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention:  Institutional Trust Services
Telecopy: (212) 946-8177

                   Re:  __________ Equity Units of Citizens Communications
                   Company, a Delaware corporation (the "COMPANY").

            Please refer to the Warrant Agreement, dated as of June 19, 2001
(the "Warrant Agreement"; unless otherwise defined herein, terms defined in the
Warrant Agreement are used herein as defined therein), between the Company and
the undersigned, as Warrant Agent and as attorney-in-fact for the Holders of
Equity Units from time to time.

                                      F-1
<PAGE>

            In accordance with SECTION 5.02 of the Warrant Agreement and, based
on instructions received from Holders of Equity Units as of 5:00 p.m. (New York
City time), on the fifth Business Day preceding the Warrant Settlement Date, we
hereby notify you that ______ Notes are to be tendered for purchase in the
Remarketing.

Date:                               By:   THE CHASE MANHATTAN BANK, as
                                          Warrant Agent


                                          ______________________________________
                                          Name:
                                          Title:  Authorized Officer




                                      F-2
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>5
<FILENAME>a2052437zex-4_2.txt
<DESCRIPTION>EXHIBIT 4.2
<TEXT>

<PAGE>

                                                                     Exhibit 4.2

                                                                [Execution Copy]


                         CITIZENS COMMUNICATIONS COMPANY

                                       and

                   THE BANK OF NEW YORK, as Collateral Agent,
                   Securities Intermediary and Custodial Agent

                                       and

                   THE CHASE MANHATTAN BANK, as Warrant Agent


                                PLEDGE AGREEMENT


                            Dated as of June 19, 2001
<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

                                                                                                      Page
                                                                                                      ----
<S>                                                                                                   <C>
ARTICLE 1 - DEFINITIONS..................................................................................2

ARTICLE 2 - PLEDGE.......................................................................................5
         Section 2.1      Collateral Account Pledge; Definitive Note Pledge..............................5
         Section 2.2      Control; Delivery of Definitive Notes; Financing Statement.....................6
         Section 2.3      Termination....................................................................7

ARTICLE 3 - DISTRIBUTIONS ON PLEDGED COLLATERAL..........................................................7
         Section 3.1      Interest Payments..............................................................7
         Section 3.2      Principal Payments Following Termination Event.................................7
         Section 3.3      Principal Payments Prior To or On Warrant Settlement Date......................7
         Section 3.4      Payments to Warrant Agent......................................................8
         Section 3.5      Assets Not Properly Released...................................................8

ARTICLE 4 - CONTROL......................................................................................9
         Section 4.1      Establishment of Collateral Account............................................9
         Section 4.2      Treatment as Financial Assets..................................................9
         Section 4.3      Sole Control by Collateral Agent...............................................9
         Section 4.4      Securities Intermediary's Location............................................10
         Section 4.5      No Other Claims...............................................................10
         Section 4.6      Investment and Release........................................................10
         Section 4.7      Statements and Confirmations..................................................10
         Section 4.8      Tax Allocations...............................................................10
         Section 4.9      No Other Agreements...........................................................11
         Section 4.10     Powers Coupled With An Interest...............................................11
         Section 4.11     Wire Transfer Instructions....................................................11

ARTICLE 5 - INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY EQUITY
            UNITS AND RE-ESTABLISHMENT OF EQUITY UNITS..................................................11
         Section 5.1      Initial Deposit of Notes......................................................11
         Section 5.2      Establishment of Treasury Equity Units........................................11
         Section 5.3      Reestablishment of Equity Units...............................................12
         Section 5.4      Termination Event.............................................................13
         Section 5.5      Cash Settlement...............................................................14
         Section 5.6      Early Settlement..............................................................16
         Section 5.7      Application of Proceeds in Settlement of Warrants.............................16
         Section 5.8      Tax Event Redemption..........................................................19
<PAGE>

<CAPTION>
                                TABLE OF CONTENTS
                                   (continued)

                                                                                                      Page
                                                                                                      ----
<S>                                                                                                   <C>
ARTICLE 6 - VOTING RIGHTS - PLEDGED NOTES...............................................................19

ARTICLE 7 - RIGHTS AND REMEDIES.........................................................................20
         Section 7.1      Rights and Remedies of the Collateral Agent...................................20
         Section 7.2      Tax Event Redemption..........................................................21
         Section 7.3      Initial and Additional Remarketing; Treasury Portfolio Cash Payment to
                          Remarketing Agent or Its Designated Entity....................................21
         Section 7.4      Substitutions.................................................................23

ARTICLE 8 - REPRESENTATIONS AND WARRANTIES; COVENANTS...................................................23
         Section 8.1      Representations and Warranties................................................23
         Section 8.2      Covenants.....................................................................24

ARTICLE 9 - THE COLLATERAL AGENT, THE SECURITIES INTERMEDIARY
            AND THE CUSTODIAL AGENT.....................................................................24
         Section 9.1      Appointment, Powers and Immunities............................................24
         Section 9.2      Instructions of the Company...................................................26
         Section 9.3      Reliance by Collateral Agent, Securities Intermediary
                          and Custodial Agent...........................................................26
         Section 9.4      Rights in Other Capacities....................................................26
         Section 9.5      Non-Reliance on Collateral Agent, Securities Intermediary
                          and Custodial Agent...........................................................27
         Section 9.6      Compensation and Indemnity....................................................27
         Section 9.7      Failure to Act................................................................28
         Section 9.8      Resignation of Collateral Agent, Securities Intermediary and
                          Custodial Agent...............................................................29
         Section 9.9      Right to Appoint Agent or Advisor.............................................30
         Section 9.10     Survival......................................................................30
         Section 9.11     Exculpation...................................................................30

ARTICLE 10 - AMENDMENT..................................................................................31
         Section 10.1     Amendment Without Consent of Holders..........................................31
         Section 10.2     Amendment With Consent of Holders.............................................31
         Section 10.3     Execution of Amendments.......................................................32
         Section 10.4     Effect of Amendments..........................................................33
         Section 10.5     Reference to Amendments.......................................................33

ARTICLE 11 - MISCELLANEOUS..............................................................................33
         Section 11.1     No Waiver.....................................................................33
         Section 11.2     Governing Law.................................................................33
<PAGE>

<CAPTION>
                                TABLE OF CONTENTS
                                   (continued)

                                                                                                      Page
                                                                                                      ----
<S>                                                                                                   <C>
         Section 11.3     Notices.......................................................................34
         Section 11.4     Successors and Assigns........................................................34
         Section 11.5     Counterparts..................................................................34
         Section 11.6     Severability..................................................................34
         Section 11.7     Expenses, Etc.................................................................35
         Section 11.8     Security Interest Absolute....................................................36
         Section 11.9     Notice of Tax Event, Tax Event Redemption and
                          Termination Event.............................................................36
         Section 11.10    Book-entry Interests..........................................................36

EXHIBIT A   INSTRUCTION FROM WARRANT AGENT TO COLLATERAL AGENT (Establishment of Treasury
            Equity Units)..............................................................................A-1

EXHIBIT B   [DELIBERATELY OMITTED].....................................................................B-1

EXHIBIT C   INSTRUCTION FROM WARRANT AGENT TO COLLATERAL AGENT (Reestablishment of Equity Units )......C-1

EXHIBIT D   INSTRUCTION FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY (Reestablishment of
            Equity Units)..............................................................................D-1

EXHIBIT E   NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY TO WARRANT AGENT (Cash
            Settlement Amounts)........................................................................E-1

EXHIBIT F   INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING.......................................F-1

EXHIBIT G   INSTRUCTION TO CUSTODIAL AGENT REGARDING WITHDRAWAL FROM REMARKETING.......................G-1

EXHIBIT H   NOTICE TO DELIVER TREASURY PORTFOLIO ......................................................H-1

EXHIBIT I   INSTRUCTION TO WARRANT AGENT AND SECURITIES INTERMEDIARY...................................I-1

EXHIBIT J   INSTRUCTION FROM WARRANT AGENT TO COLLATERAL AGENT.........................................J-1
</TABLE>
<PAGE>

                                PLEDGE AGREEMENT

         PLEDGE AGREEMENT, dated as of June 19, 2001, among Citizens
Communications Company, a Delaware corporation (the "COMPANY"), The Bank of New
York, a New York banking corporation, as collateral agent (in such capacity,
together with its successors in such capacity, the "COLLATERAL AGENT"), as
securities intermediary with respect to the Collateral Account (as defined
below) (in such capacity, together with its successors in such capacity, the
"SECURITIES INTERMEDIARY"), and as custodial agent for the Holders (as defined
herein) (in such capacity, together with its successors in such capacity, the
"CUSTODIAL Agent") and The Chase Manhattan Bank, as warrant agent and as
attorney-in-fact of the Holders from time to time of the Securities under the
Warrant Agreement (in such capacity, together with its successors in such
capacity, the "WARRANT AGENT").

                                    RECITALS

         The Company and the Warrant Agent are parties to the Warrant Agreement
dated as of the date hereof (as modified and supplemented and in effect from
time to time, the "WARRANT AGREEMENT"), pursuant to which there will be issued
18,400,000 of Equity Units (including any Treasury Equity Units (each, as
referred to below), the "SECURITIES").

         Each Security, at issuance, consists of a unit comprised of (a) a
warrant (the "WARRANT") under which the Holder will purchase from the Company on
or prior to August 17, 2004 (the "WARRANT SETTLEMENT DATE"), for an amount equal
to $25 (the "STATED AMOUNT"), a number of shares of Citizens Communications
Company common stock, par value $0.25 per share ("COMMON STOCK"), equal to the
Settlement Rate, and (b) a note (a "NOTE") issued by the Company under the
Indenture (as referred to below), designated as the Senior Notes due August 17,
2006, and having a principal amount equal to the Stated Amount.

         Pursuant to the terms of the Warrant Agreement and the Warrants, the
Holders of the Securities have irrevocably authorized the Warrant Agent, as
attorney-in-fact of such Holders, to, among other things, execute and deliver
this Agreement on behalf of such Holders and grant the pledge provided herein of
the Collateral Account and the Pledged Notes to secure the Obligations (as
defined below).

         Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Warrant Agent, on its own behalf and
as attorney-in-fact of the Holders from time to time of the Securities, agree as
follows:
<PAGE>

                                    ARTICLE 1
                                   DEFINITIONS

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

         (a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular, and nouns
and pronouns of the masculine gender include the feminine and neuter genders;

         (b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;

         (c) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision;

         (d) the following terms which are defined in the UCC shall have the
meanings set forth therein: "CERTIFICATED SECURITY," "CONTROL," "FINANCIAL
ASSET," "ENTITLEMENT ORDER," "SECURITIES ACCOUNT" and "SECURITY ENTITLEMENT";

         (e) the following terms have the meanings assigned to them in the
Warrant Agreement: "ACT," "APPLICABLE AMOUNT," "APPLICABLE OWNERSHIP INTEREST,"
"BANKRUPTCY CODE," "BENEFICIAL OWNER," "BUSINESS DAY," "CASH SETTLEMENT,"
"CERTIFICATE," "CODE," "DEPOSITARY," "EARLY SETTLEMENT," "EARLY SETTLEMENT
AMOUNT," "EARLY SETTLEMENT DATE," "EQUITY UNIT," "FAILED FINAL REMARKETING,"
"FAILED INITIAL REMARKETING," "FINAL REMARKETING DATE," "HOLDER," "INDENTURE,"
"INDENTURE TRUSTEE," "INITIAL REMARKETING DATE," "NOTES," "OFFICERS'
CERTIFICATE," "OPINION OF COUNSEL," "OUTSTANDING SECURITIES," "PERSON,"
"PURCHASE PRICE," "QUOTATION AGENT," "REDEMPTION AMOUNT," "REMARKETING AGENT,"
"REMARKETING AGREEMENT," "REMARKETING FEE," "SETTLEMENT RATE," "SUCCESSFUL
INITIAL REMARKETING," "SUPPLEMENTAL REMARKETING AGREEMENT," "TAX EVENT
REDEMPTION AMOUNT," "TAX EVENT REDEMPTION DATE," "TERMINATION EVENT," "TREASURY
EQUITY UNIT," "TREASURY PORTFOLIO," "UNDERWRITING AGREEMENT," "WARRANT," and
"WARRANT SETTLEMENT DATE"; and

         (f) the following terms have the meanings given to them in this Section
1(f):

         "AGREEMENT" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time by one or more amendments hereof
entered into pursuant to the applicable provisions hereof.

         "CASH" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.


                                       2
<PAGE>

         "COLLATERAL" means all powers and rights now owned or hereafter
acquired under or with respect to the Collateral Account and the Pledged Notes.

         "COLLATERAL ACCOUNT" means the collective reference to:

                  (1) the securities account of The Bank of New York, as
         Collateral Agent, maintained by the Securities Intermediary and
         designated "The Bank of New York, as Collateral Agent of Citizens
         Communications Company, as pledgee of The Chase Manhattan Bank, as the
         Warrant Agent, on behalf of and as attorney-in-fact for the Holders";

                  (2) all investment property and other financial assets from
         time to time credited to the Collateral Account, including, without
         limitation, (A) the Applicable Ownership Interests (as specified in
         Clause (A) of the definition of such term) of the Holders with respect
         to the Treasury Portfolio which are a component of the Equity Units
         from time to time; and (B) any Treasury Securities and security
         entitlements relating thereto delivered from time to time upon
         establishment of Treasury Equity Units in accordance with SECTION 5.2
         hereof and (C) payments made by Holders pursuant to SECTION 5.4 hereof;
         and

                  (3) all Proceeds (other than interest payments in respect of
         the Pledged Notes) of any of the foregoing (whether such Proceeds arise
         before or after the commencement of any proceeding under any applicable
         bankruptcy, insolvency or other similar law, by or against the pledgor
         or with respect to the pledgor).

         "COMPANY" means the Person named as the "COMPANY" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "COMPANY" shall mean such successor.

         "OBLIGATIONS" means, with respect to each Holder, the collective
reference to all obligations and liabilities of such Holder under such Holder's
Warrant, the Warrant Agreement, and this Agreement or any other document made,
delivered or given in connection herewith or therewith, in each case whether on
account of principal, interest (including, without limitation, interest accruing
or accreting before and after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
such Holder, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Company or the Collateral Agent or the Securities Intermediary or the Custodial
Agent that are required to be paid by the Holder pursuant to the terms of any of
the foregoing agreements).

         "PERMITTED INVESTMENTS" means any one or more of the following:


                                       3
<PAGE>

                  (1) any evidence of indebtedness with an original maturity of
         365 days or less issued, or directly and fully guaranteed or insured,
         by the United States of America or any agency or instrumentality
         thereof (provided that the full faith and credit of the United States
         of America is pledged in support of the timely payment thereof or such
         indebtedness constitutes a general obligation of it);

                  (2) deposits, certificates of deposit or acceptances with an
         original maturity of 365 days or less of any institution which is rated
         at least A- by Standard & Poor's Ratings Services ("S&P") or at least
         A3 by Moody's Investors Service, Inc. ("MOODY'S") and which is a member
         of the Federal Reserve System having combined capital and surplus and
         undivided profits of not less than $200.0 million at the time of
         deposit (and which may include the Collateral Agent);

                  (3) investments with an original maturity of 365 days or less
         of any Person that is fully and unconditionally guaranteed by a bank
         referred to in clause (2);

                  (4) repurchase agreements and reverse repurchase agreements
         relating to marketable direct obligations issued or unconditionally
         guaranteed by the United States Government or issued by any agency
         thereof and backed as to timely payment by the full faith and credit of
         the United States Government;

                  (5) investments in commercial paper, other than commercial
         paper issued by the Company or its affiliates, of any corporation
         incorporated under the laws of the United States or any State thereof,
         which commercial paper has a rating at the time of purchase at least
         equal to "A-1" by S&P or at least equal to "P-1" by Moody's; and

                  (6) investments in money market funds (including, but not
         limited to, money market funds managed by the Collateral Agent or an
         affiliate of the Collateral Agent) registered under the Investment
         Company Act of 1940, as amended, rated in the highest applicable rating
         category by S&P or Moody's.

         "PLEDGE" means the lien and security interest created by this
Agreement.

         "PLEDGED NOTES" means the principal amount of the Notes (and not
interest payments in respect thereof), proceeds and security entitlements with
respect to such principal amount and not then released from the Pledge.

         "PLEDGED TREASURY SECURITIES" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.

         "PROCEEDS" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, cash, instruments, securities,
financial assets (as defined


                                       4
<PAGE>

in ss. 8-102(a)(9) of the UCC) and other property received, receivable or
otherwise distributed upon the sale, exchange, collection or disposition of any
financial assets from time to time held in the Collateral Account.

         "SEPARATE SECURITIES" means any Notes that are not Pledged Notes.

         "TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.

         "TRADES REGULATIONS" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.

         "TRANSFER" means in the case of certificated securities in registered
form, delivery as provided in ss. 8-301(a) of the UCC, indorsed to the
transferee or in blank by an effective endorsement; in the case of Treasury
Securities, registration of the transferee as the owner of such Treasury
Securities on TRADES; and in the case of security entitlements, including,
without limitation, security entitlements with respect to Treasury Securities, a
securities intermediary indicating by book entry that such security entitlement
has been credited to the transferee's securities account.

         "TREASURY SECURITIES" means zero-coupon U.S. Treasury securities (Cusip
No. 912820 BK 2) which mature on August 16, 2004.

         "UCC" means the Uniform Commercial Code as in effect in the State of
New York from time to time.

         "VALUE" means, with respect to any item of Collateral on any date, as
to (1) Cash, the face amount thereof, (2) Treasury Securities or Pledged
Treasury Securities, the aggregate principal amount thereof due at maturity and
(3) the Notes or the Pledged Notes, the aggregate principal amount thereof due
at maturity.

         "WARRANT AGENT" has the meaning specified in the paragraph preceding
the recitals of this Agreement.

                                    ARTICLE 2
                                     PLEDGE

Section 2.1 COLLATERAL ACCOUNT PLEDGE; DEFINITIVE NOTE PLEDGE.

         Each Holder, acting through the Warrant Agent as such Holder's
attorney-in-fact, hereby pledges and grants to the Collateral Agent, as agent of
and for the benefit of the Company, a continuing first priority security
interest in and to, and a lien upon and right of set-off against, all of such
Holder's right, title and interest in and to:


                                       5
<PAGE>

         (a) The Collateral Account, and

         (b) The Pledged Notes which are not Global Securities (as defined in
the Indenture) and the promissory notes or instruments evidencing the Pledged
Notes, and all cash, instruments and other property and assets from time to time
received, receivable or otherwise distributed in respect of the Pledged Notes,
other than in each case any interest payments payable in respect of the Pledged
Notes,

         to secure the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations

         The Collateral Agent shall have all of the rights, remedies and
recourses with respect to the Collateral afforded a secured party by the UCC, in
addition to, and not in limitation of, the other rights, remedies and recourses
afforded to the Collateral Agent by this Agreement.

Section 2.2 CONTROL; DELIVERY OF DEFINITIVE NOTES; FINANCING STATEMENT.

         (a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of ARTICLE 4 of this Agreement.

         (b) As soon as practicable after the date of initial issuance of the
Securities, the Company shall deliver to the Collateral Agent a financing
statement under the UCC which was prepared for filing by the Company in the
Office of the Secretary of State of the State of New York and any other
jurisdictions which the Company deems necessary, signed by the Warrant Agent, as
attorney-in-fact for the Holders, as Debtors, and describing the Collateral,
together with evidence of the filing thereof and of the filing information of
the filing officer of each office in which so filed.

         (c) All certificates and all promissory notes and instruments
evidencing the Pledged Notes issued in definitive form shall be delivered to and
held by the Collateral Agent, for the benefit of the Company in the City of New
York, New York. All Pledged Notes shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent and all promissory notes or other
instruments evidencing the Pledged Notes shall be endorsed by the Warrant Agent.
Transfers of Notes to and from the Collateral shall be evidenced by endorsements
by the Collateral Agent in the manner set forth in Section 4.4 of the Second
Supplemental Indenture, dated as of the date hereof, to the Indenture, dated as
of May 23, 2001, between the Company and the Indenture Trustee, in respect of
transfers of Notes under SECTIONS 5.2 and 5.3 hereof.


                                       6
<PAGE>

Section 2.3 TERMINATION.

         As to each Holder, this Agreement and the Pledge created hereby shall
terminate upon the satisfaction of such Holder's Obligations. Upon such
termination, the Securities Intermediary shall Transfer such Holder's portion of
the Collateral to the Warrant Agent for distribution to such Holder in
accordance with his, her or its interest, free and clear of any lien, pledge or
security interest created hereby.

                                    ARTICLE 3
                       DISTRIBUTIONS ON PLEDGED COLLATERAL

Section 3.1 INTEREST PAYMENTS.

         All interest payments received by the Securities Intermediary or the
Collateral Agent on account of the Notes, the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio or Permitted Investments from time to time held in the Collateral
Account shall be distributed to the Warrant Agent (The Chase Manhattan Bank, ABA
No. 021000021, DDA No. 507943635, Attention: James D. Heaney, Re: Citizens
Communications Company Equity Units) for the benefit of the applicable Holders
in whose names the Equity Units or Treasury Equity Units are registered at the
close of business on the record date preceding the date of such interest payment
as provided in the Warrant Agreement.

Section 3.2 PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT.

         All payments received by the Collateral Agent or the Securities
Intermediary following a Termination Event of (1) the principal amount of
Pledged Notes or security entitlements thereto, (2) the Applicable Ownership
Interests (as specified in Clause (A) of the definition thereof) of the Treasury
Portfolio or (3) the principal amount of the Pledged Treasury Securities or
security entitlements with respect thereto, shall be distributed to the Warrant
Agent for the benefit of the applicable Holders for distribution to such Holders
in accordance with their respective interests.

Section 3.3 PRINCIPAL PAYMENTS PRIOR TO OR ON WARRANT SETTLEMENT DATE.

         (a) Subject to the provisions of SECTION 7.2, and except as provided in
CLAUSE 3.3(B) below, if no Termination Event shall have occurred, all payments
received by the Collateral Agent or the Securities Intermediary of (1) the
principal amount with respect to the Pledged Notes or security entitlements with
respect thereto, (2) the Applicable Ownership Interests (as specified in Clause
(A) of the definition thereof) of the Treasury Portfolio or (3) the principal
amount of Pledged Treasury Securities or security entitlements with respect
thereto, shall be held and invested in Permitted Investments until the Warrant
Settlement Date and on the Warrant Settlement Date distributed to the Company as
provided in SECTION 5.7 hereof. Any balance remaining in the Collateral Account
shall be distributed to the Warrant Agent for the benefit of the applicable


                                       7
<PAGE>

Holders for distribution by the Warrant Agent to such Holders in whose names the
Equity Units or Treasury Equity Units are registered at the close of business on
the record date preceding the date of such distribution in accordance with their
respective interests. Upon the request of the Securities Intermediary or the
Collateral Agent, as applicable, the Company shall instruct the Securities
Intermediary or the Collateral Agent, as applicable, as to the type of Permitted
Investments in which any payments made under this Section shall be invested,
provided, however, that if the Company fails to deliver such instructions by
10:30 a.m. (New York City time), the Securities Intermediary or the Collateral
Agent, as applicable, shall invest such payments in the Permitted Investments
described in clause 6 of the definition of Permitted Investments.

         (b) All payments received by the Collateral Agent or the Securities
Intermediary of (1) the principal amount with respect to the Pledged Notes or
security entitlements with respect thereto, (2) the Applicable Ownership
interests (as specified in Clause (A) of the definition thereof) of the Treasury
Portfolio or (3) the principal amount of Treasury Securities or security
entitlements with respect thereto, that, in each case, have been released from
the Pledge shall be distributed to the Warrant Agent for the benefit of the
applicable Holders for distribution by the Warrant Agent to such Holders in
whose names the Equity Units or Treasury Equity Units are registered at the
close of business on the record date preceding the date of such distribution in
accordance with their respective interests.

Section 3.4 PAYMENTS TO WARRANT AGENT.

         The Collateral Agent and the Securities Intermediary shall use all
commercially reasonable efforts to deliver payments to the Warrant Agent
hereunder to the account designated by the Warrant Agent for such purpose not
later than the close of business on the Business Day such payment is received by
the Collateral Agent or the Securities Intermediary; provided, however, that if
such payment is received on a day that is not a Business Day or after 11:00 A.M.
(New York City time) on a Business Day, then the Collateral Agent or the
Securities Intermediary, as the case may be, shall use all commercially
reasonable efforts to deliver such payment no later than 10:30 a.m. (New York
City time) on the next succeeding Business Day.

Section 3.5 ASSETS NOT PROPERLY RELEASED; TREATMENT OF CASH.

         If the Warrant Agent or any Holder shall receive any principal payments
on account of financial assets credited to the Collateral Account and not
released therefrom in accordance with this Agreement, the Warrant Agent or such
Holder shall hold the same as trustee of an express trust for the benefit of the
Company and, upon receipt of an Officers' Certificate of the Company so
directing, promptly deliver the same to the Securities Intermediary for credit
to the Collateral Account or to the Company for application to the Obligations
of the Holders, and the Warrant Agent and Holders shall acquire no right, title
or interest in any such payments of principal amounts so received.


                                       8
<PAGE>

         All Cash received by the Collateral Agent or the Securities
Intermediary shall be deposited in the Collateral Account.

                                    ARTICLE 4
                                     CONTROL

Section 4.1 ESTABLISHMENT OF COLLATERAL ACCOUNT.

         The Securities Intermediary hereby confirms that:

                  (1) the Securities Intermediary has established the Collateral
         Account;

                  (2) the Collateral Account is a securities account;

                  (3) subject to the terms of this Agreement, the Securities
         Intermediary shall treat the Warrant Agent as entitled to exercise the
         rights that comprise any financial asset credited to the Collateral
         Account;

                  (4) all property delivered to the Securities Intermediary
         pursuant to this Agreement or the Warrant Agreement will be credited
         promptly to the Collateral Account;

                  (5) all securities or other property underlying any financial
         assets credited to the Collateral Account shall be registered in the
         name of the Securities Intermediary, indorsed to the Securities
         Intermediary or in blank, or credited to another securities account
         maintained in the name of the Securities Intermediary, and in no case
         will any financial asset credited to the Collateral Account be
         registered in the name of the Warrant Agent or any Holder, payable to
         the order of the Warrant Agent or any Holder or specially indorsed to
         the Warrant Agent or any Holder.

Section 4.2 TREATMENT AS FINANCIAL ASSETS.

         Each item of property (whether investment property, financial asset,
security, instrument or cash) credited to the Collateral Account shall be
treated as a financial asset.

Section 4.3 SOLE CONTROL BY COLLATERAL AGENT.

         Except as provided in ARTICLE 6, at all times prior to the termination
of the Pledge, the Collateral Agent shall have sole control of the Collateral
Account, and the Securities Intermediary shall take instructions and directions
with respect to the Collateral Account solely from the Collateral Agent. If at
any time the Securities Intermediary shall receive an entitlement order issued
by the Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Warrant Agent or any Holder or any other Person. Until termination of the


                                       9
<PAGE>

Pledge, the Securities Intermediary will not comply with any entitlement orders
issued by the Warrant Agent or any Holder.

Section 4.4 SECURITIES INTERMEDIARY'S LOCATION.

         The Collateral Account, and the rights and obligations of the
Securities Intermediary, the Collateral Agent, the Warrant Agent and the Holders
with respect thereto, shall be governed by the laws of the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be the Securities Intermediary's location.

Section 4.5 NO OTHER CLAIMS.

         Except for the claims and interest of the Collateral Agent and of the
Warrant Agent and the Holders in the Collateral Account, the Securities
Intermediary (without making any investigation) does not know of any claim to,
or interest in, the Collateral Account or in any financial asset credited
thereto. If any Person asserts any lien, encumbrance or adverse claim (including
any writ, garnishment, judgment, warrant of attachment, execution or similar
process) against the Collateral Account or in any financial asset carried
therein, the Securities Intermediary will promptly notify the Collateral Agent
and the Warrant Agent.

Section 4.6 INVESTMENT AND RELEASE.

         All proceeds of financial assets from time to time deposited in the
Collateral Account shall be invested and reinvested as provided in this
Agreement. At all times prior to termination of the Pledge, no property shall be
released from the Collateral Account except in accordance with this Agreement or
upon written instructions of the Collateral Agent.

Section 4.7 STATEMENTS AND CONFIRMATIONS.

         The Securities Intermediary will send copies of all statements,
confirmations and other correspondence concerning the Collateral Account and any
financial assets credited thereto to each of the Warrant Agent, the Collateral
Agent and the Company, simultaneously, at their addresses for notices under this
Agreement.

Section 4.8 TAX ALLOCATIONS.

         The Company shall report all items of income, gain, expense and loss
recognized in the Collateral Account, to the extent such reporting is required
by law, to the Internal Revenue Service and all state and local taxing
authorities under the names and taxpayer identification numbers of the Holders.
None of the Warrant Agent, the Securities Intermediary, the Collateral Agent or
the Custodial Agent shall have any tax reporting duties hereunder.


                                       10
<PAGE>

Section 4.9 NO OTHER AGREEMENTS.

         The Securities Intermediary has not entered into, and prior to the
termination of the Pledge will not enter into, any agreement with any other
Person relating to the Collateral Account or any financial assets credited
thereto, including, without limitation, any agreement to comply with entitlement
orders of any Person other than the Collateral Agent.

Section 4.10 POWERS COUPLED WITH AN INTEREST.

         The rights and powers granted in this ARTICLE 4 to the Collateral Agent
have been granted in order to perfect its security interests in the Collateral
Account, are powers coupled with an interest and will be affected neither by the
bankruptcy of the Warrant Agent or any Holder nor by the lapse of time. The
obligations of the Securities Intermediary under this ARTICLE 4 shall continue
in effect until the termination of the Pledge.

Section 4.11 WIRE TRANSFER INSTRUCTIONS.

         Any moneys transferred hereunder for deposit into the Collateral
Account shall be delivered by wire transfer in immediately available funds
addressed as follows: The Bank of New York, ABA No. 021000018; Corporate Trust
Agency GLA 111565; Ref.: BNY as Collateral Agent for Citizens Communications
Pledge; Account No.: 061419.

                                    ARTICLE 5
             INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY EQUITY UNITS
                      AND RE-ESTABLISHMENT OF EQUITY UNITS

Section 5.1 INITIAL DEPOSIT OF NOTES.

         Prior to or concurrently with the execution and delivery of this
Agreement, the Warrant Agent, on behalf of the initial Holders of the Equity
Units, shall Transfer to the Collateral Agent the Notes or security entitlements
relating thereto.

Section 5.2 ESTABLISHMENT OF TREASURY EQUITY UNITS.

         (a) If neither a Treasury Portfolio has replaced the Notes as a
component of the Equity Units as the result of a Successful Initial Remarketing
of the Notes nor a Tax Event Redemption shall have occurred, at any time on or
prior to the fifth Business Day immediately preceding the Warrant Settlement
Date, a Holder of Equity Units shall have the right to substitute Treasury
Securities or security entitlements with respect thereto for the Pledged Notes
comprising a part of such Holder's Equity Units in integral multiples of 40
Equity Units by:


                                       11
<PAGE>

                  (1) Transferring to the Securities Intermediary for credit to
         the Collateral Account Treasury Securities or security entitlements
         with respect thereto having a Value equal to the aggregate principal
         amount at maturity of Pledged Notes to be accompanied by a notice,
         substantially in the form of Exhibit C to the Warrant Agreement, and
         all applicable fees, whereupon the Warrant Agent shall deliver to the
         Collateral Agent a notice, substantially in the form of EXHIBIT A
         hereto, (A) stating that such Holder has Transferred Treasury
         Securities or security entitlements with respect thereto to the
         Securities Intermediary for credit to the Collateral Account, (B)
         stating the Value of the Treasury Securities or security entitlements
         with respect thereto Transferred by or on behalf of such Holder and (C)
         requesting that the Collateral Agent release from the Pledge the
         Pledged Notes that are a component of such Equity Units; and

                  (2) delivering the related Equity Units to the Warrant Agent.

         Upon receipt of such notice and confirmation that Treasury Securities
or security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
release such Pledged Notes from the Pledge by Transfer to the Warrant Agent for
distribution to such Holder free and clear of any lien, pledge or security
interest created hereby.

         (b) All Treasury Securities delivered under this Agreement for credit
to the Collateral Account shall be delivered addressed as follows: Treasuries,
The Bank of New York; ABA No.: 021000018; BK of NYC/Cust. Account No.: 061419;
Contact: Geovanni Barris, (212) 815-5084.

Section 5.3 REESTABLISHMENT OF EQUITY UNITS.

         (a) If no Tax Event Redemption shall have occurred, at any time on or
prior to the seventh Business Day immediately preceding the Warrant Settlement
Date, a Holder of Treasury Equity Units shall have the right to reestablish
Equity Units by substitution of Notes or security entitlements with respect
thereto for Pledged Treasury Securities in integral multiples of 40 Treasury
Equity Units by:

                  (1) Transferring to the Collateral Agent the Notes or security
         entitlements with respect thereto, having a principal amount equal to
         the Value of the Pledged Treasury Securities to be released,
         accompanied by a notice, substantially in the form of Exhibit C to the
         Warrant Agreement, and all applicable fees whereupon the Warrant Agent
         shall deliver to the Collateral Agent a notice, substantially in the
         form of EXHIBIT C hereto, stating that such Holder has Transferred the
         Notes to the Collateral Agent and requesting that the Collateral Agent
         release from the Pledge the Pledged Treasury Securities related to such
         Treasury Equity Units; and

                  (2) delivering the related Treasury Equity Units to the
         Warrant Agent.


                                       12
<PAGE>

         Upon receipt of such notice and confirmation that Notes have been
transferred to the Collateral Agent as described in such notice, the Collateral
Agent shall instruct the Securities Intermediary by a notice in the form
provided in EXHIBIT D hereto to release such Pledged Treasury Securities from
Pledge by Transfer to the Warrant Agent for distribution to such Holder, free
and clear of any lien, pledge or security interest created hereby.

         (b) Upon Transfer to the Collateral Agent of Notes delivered by a
Holder of Treasury Equity Units and receipt of the related instruction from the
Collateral Agent, the Securities Intermediary shall release the Pledged Treasury
Securities and shall promptly transfer the same to the Warrant Agent for
distribution by the Warrant Agent to such Holder, free and clear of any lien,
pledge or security interest created hereby.

Section 5.4 TERMINATION EVENT.

         (a) Upon receipt by the Collateral Agent of written notice from the
Company or the Warrant Agent that a Termination Event has occurred, the
Collateral Agent shall release all Collateral from the Pledge and shall promptly
Transfer:

                  (1) any Pledged Notes or security entitlements with respect
         thereto or the Applicable Ownership Interest (as specified in clause
         (A) of the definition of such term) of the Treasury Portfolio (if a Tax
         Event Redemption or a Successful Initial Remarketing has occurred and
         the Treasury Portfolio has become a component of the Equity Units);

                  (2) any Pledged Treasury Securities or security entitlements
         with respect thereto, and

                  (3) payments by Holders (or the Permitted Investments of such
         payments) pursuant to SECTION 5.5 hereof,

to the Warrant Agent for the benefit of the Holders for distribution to such
Holders in accordance with their respective interests, free and clear of any
lien, pledge or security interest or other interest created hereby; provided,
however, if any Holder shall be entitled to receive less than $1,000 with
respect to his interest in the Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, the
Warrant Agent shall have the right to dispose of such interest for cash and
deliver to such Holder cash in lieu of delivering the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio.

         (b) If such Termination Event shall result from the Company's becoming
a debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Notes, the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the


                                       13
<PAGE>

Treasury Portfolio, the Pledged Treasury Securities or payments by Holders (or
the Permitted Investments of such payments) pursuant to SECTION 5.5 hereof, as
the case may be, as provided by this SECTION 5.4, the Warrant Agent shall use
its commercially reasonable efforts to obtain an opinion of a nationally
recognized law firm reasonably acceptable to the Collateral Agent to the effect
that, as a result of the Company's being the debtor in such a bankruptcy case,
the Collateral Agent will not be prohibited from releasing or Transferring the
Collateral as provided in this SECTION 5.4, and shall deliver such opinion to
the Collateral Agent within 10 days after the occurrence of such Termination
Event, and if (A) the Warrant Agent shall be unable to obtain such opinion
within 10 days after the occurrence of such Termination Event or (B) the
Collateral Agent shall continue, after delivery of such opinion, to refuse to
effectuate the release and Transfer of all Pledged Notes, the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, the Pledged Treasury Securities, the payments by
Holders (or the Permitted Investments of such payments) pursuant to SECTION 5.5
hereof or the Proceeds of any of the foregoing, as the case may be, as provided
in this SECTION 5.4, then the Warrant Agent shall within 15 days after the
occurrence of such Termination Event commence an action or proceeding in the
court having jurisdiction of the Company's case under the Bankruptcy Code
seeking an order requiring the Collateral Agent to effectuate the release and
transfer of Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, all the Pledged Notes, the
Pledged Treasury Securities, or the payments by Holders (or the Permitted
Investments of such payments) pursuant to SECTION 5.5 hereof, or as the case may
be, as provided by this SECTION 5.4.

Section 5.5 CASH SETTLEMENT.

         (a) Unless the Treasury Portfolio has replaced the Notes as a component
of Equity Units as a result of a successful Initial Remarketing of the Pledged
Notes or a Tax Event Redemption, a Holder of Equity Units may settle the related
Warrant with Cash on the fourth business day immediately preceding the Warrant
Settlement Date. Upon receipt by the Collateral Agent of (1) (i) in the case of
Equity Units, a notice from the Warrant Agent promptly after the receipt by the
Warrant Agent of a notice from a Holder of Equity Units prior to or at 11:00
a.m. (New York City time) on the fourth Business Day immediately preceding the
Warrant Settlement Date that such Holder has elected, in accordance with the
procedures specified in Section 5.03(a)(i) of the Warrant Agreement to effect a
Cash Settlement, or (ii) in the case of Treasury Equity Units, receipt of such
notice on the second Business Day immediately preceding the Warrant Settlement
Date that such Holder has elected, in accordance with the procedures specified
in Section 5.03(f)(i) of the Warrant Agreement to effect a Cash Settlement, and
(2) payment by such Holder by deposit in the Collateral Account prior to or at
5:00 p.m. (New York City time) (i) in the case of Equity Units, which may only
be settled in integral multiples of 40 Warrants, on the fourth Business Day
immediately preceding the Warrant Settlement Date, or (ii) in the case of
Treasury Equity Units, on the Business Day immediately preceding the Warrant
Settlement Date, of the Purchase Price in lawful


                                       14
<PAGE>

money of the United States by wire transfer of immediately available funds
payable to or upon the order of the Securities Intermediary, then the Collateral
Agent shall:

                  (1) instruct the Securities Intermediary promptly to invest
         any such Cash in Permitted Investments;

                  (2) release from the Pledge the Equity Unit holder's or the
         Treasury Equity Unit holder's related Pledged Notes or Pledged Treasury
         Securities, as applicable, as to which such Holder has elected to
         effect a Cash Settlement pursuant to this SECTION 5.5(a); and

                  (3) Transfer or instruct the Securities Intermediary to
         Transfer all such Pledged Notes or the Pledged Treasury Securities, as
         the case may be, to the Warrant Agent for the benefit of such Holder,
         in each case free and clear of the Pledge created hereby, for
         distribution to such Holder.

         The Company shall instruct the Securities Intermediary as to the type
of Permitted Investments in which any such Cash shall be invested; provided,
however, that if the Company fails to deliver such instructions by 10:30 a.m.
(New York City time), the Securities Intermediary shall invest such Cash in the
Permitted Investments described in clause 6 of the definition of Permitted
Investments.
         Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Warrant Settlement Date, the Collateral Agent shall (A)
instruct the Securities Intermediary to pay the portion of such proceeds, in an
aggregate amount equal to the Purchase Price, to the Company on the Warrant
Settlement Date, and (B) instruct the Collateral Agent or the Securities
Intermediary to release any amounts in excess of the Purchase Price earned from
such Permitted Investments to the Warrant Agent for distribution to such Holder.

         (b) If a Holder of Equity Units (if neither a Tax Event Redemption nor
a Successful Initial Remarketing shall have occurred) notifies the Warrant Agent
as provided in paragraph 5.03(a)(i) of the Warrant Agreement of its intention to
pay the Purchase Price in cash, but fails to make such payment as required by
paragraph 5.03(a)(ii) of the Warrant Agreement, such Holder shall be deemed to
have consented to the disposition of such Holder's Pledged Notes in accordance
with the remarketing procedures as described in paragraph 5.03(a)(iii) of the
Warrant Agreement.

         (c) If a Holder of a Treasury Equity Unit notifies the Warrant Agent as
provided in paragraph 5.03(f)(i) of the Warrant Agreement of its intention to
pay the Purchase Price in cash, but fails to make such payment as required by
paragraph 5.03(f)(ii) of the Warrant Agreement, such Holder shall be deemed to
have elected to pay the Purchase Price in accordance with paragraph 5.03(f)(iii)
of the Warrant Agreement.


                                       15
<PAGE>

         (d) In the event of a Failed Final Remarketing as described in Section
5.02 of the Warrant Agreement, the Collateral Agent, for the benefit of the
Company, will also exercise its rights as a secured party with respect to such
Pledged Notes at the direction of the Company to retain or dispose of the
Collateral in accordance with applicable law.

         (e) As soon as practicable after 11:00 a.m. (New York City time) (i) in
the case of Equity Units, on the fourth Business Day immediately preceding the
Warrant Settlement Date, and (ii) in the case of Treasury Equity Units, on the
Business Day immediately preceding the Warrant Settlement Date, the Collateral
Agent and Securities Intermediary shall deliver to the Warrant Agent a notice,
substantially in the form of EXHIBIT E hereto, stating the amount of cash that
it has received with respect to the Cash Settlement of Equity Units or the
amount of cash that it has received with respect to the Cash Settlement of
Treasury Equity Units, as the case may be.

Section 5.6 EARLY SETTLEMENT.

         Upon receipt by the Collateral Agent of a notice from the Warrant Agent
that a Holder of Securities has elected to effect Early Settlement of its
obligations under the Warrants forming a part of such Securities in accordance
with the terms of the Warrants and Section 5.08 of the Warrant Agreement (which
notice shall set forth the number of such Warrants as to which such Holder has
elected to effect Early Settlement), and that the Warrant Agent has received
from such Holder, and paid to the Company as confirmed in writing by the
Company, the related Early Settlement Amounts pursuant to the terms of the
Warrants and the Warrant Agreement and that all conditions to such Early
Settlement have been satisfied, then the Collateral Agent shall release from the
Pledge, (1) Pledged Notes or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definitions at such term) of the Treasury
Portfolio in the case of a Holder of Equity Units or (2) Pledged Treasury
Securities, in the case of a Holder of Treasury Equity Units, with a Value equal
to the product of (x) the Stated Amount times (y) the number of Warrants as to
which such Holder has elected to effect Early Settlement, and shall instruct the
Securities Intermediary to Transfer all such Pledged Notes or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definitions at
such term) of the Treasury Portfolio or Pledged Treasury Securities, as the case
may be, to the Warrant Agent for the benefit of such Holder, in each case free
and clear of the Pledge created hereby, for distribution to such Holder. A
Treasury Equity Unit holder may settle early only in integral multiples of 40
Warrants. In the event that any Securites are evidenced by one or more global
certificates deposited with The Depository Trust Company ("DTC"), procedures for
early settlement will also be governed by standing arrangements between DTC and
the Warrant Agent.

Section 5.7 APPLICATION OF PROCEEDS IN SETTLEMENT OF WARRANTS.

         (a) If a Holder of Equity Units (if neither a Tax Event Redemption nor
a Successful Initial Remarketing has occurred) has not elected to make an
effective Cash Settlement by notifying the Warrant Agent in the manner provided
for in Section


                                       16
<PAGE>

5.03(a)(i) in the Warrant Agreement, such Holder shall be deemed to have elected
to pay for the shares of Common Stock to be issued under such Warrants from the
proceeds of the remarketing of the related Pledged Notes. Upon notice of such
event from the Warrant Agent, the Collateral Agent shall, by 11:00 a.m., New
York City time, on the fourth Business Day immediately preceding the Warrant
Settlement Date, without any instruction from such Holder of Equity Units,
Transfer the related Pledged Notes to the Remarketing Agent for remarketing.
Upon receiving such Pledged Notes, the Remarketing Agent, pursuant to the terms
of the Remarketing Agreement and the Supplemental Remarketing Agreement, will
use reasonable efforts to remarket the Pledged Notes on the Final Remarketing
Date at a price of approximately 100.25% (but not less than 100%) of the
aggregate Value of such Pledged Notes. After deducting as the Remarketing Fee an
amount not exceeding 25 basis points (.25%) of the aggregate Value of the
remarketed Pledged Notes from any amount of such proceeds in excess of the
aggregate Value of the remarketed Pledged Notes, the Remarketing Agent will
remit the entire amount of the proceeds of such remarketing to the Collateral
Agent. On the Warrant Settlement Date, the Warrant Agent shall give written
direction to the Collateral Agent specifying a portion of the Proceeds from such
remarketing equal to the aggregate principal amount of such Pledged Notes to
satisfy in full such Holder's obligations to pay the Purchase Price to purchase
the shares of Common Stock under the related Warrants and the balance of the
Proceeds from the remarketing, if any, that shall be transferred to the Warrant
Agent for the benefit of such Holder for distribution to such Holder.

         If the Remarketing Agent advises the Collateral Agent in writing that
it cannot remarket the related Pledged Notes of such Holders of Equity Units at
a price not less than 100% of the aggregate Value of such Pledged Notes or if
the remarketing shall not have occurred because a condition precedent to the
remarketing shall not have been fulfilled, thus resulting in a Failed Final
Remarketing, the Collateral Agent, for the benefit of the Company shall, at the
written direction of the Company, retain or dispose of the Pledged Notes in
accordance with applicable law and satisfy in full, from such retention or
disposition, such Holder's obligations to pay the Purchase Price for the shares
of Common Stock.

         (b) If a Holder of a Treasury Equity Unit has not elected to make an
effective Cash Settlement by notifying the Warrant Agent in the manner provided
for in Section 5.03(f)(i) of the Warrant Agreement, or in all cases where the
Treasury Portfolio has become a component of Equity Units such Holder shall be
deemed to have elected to pay for the shares of Common Stock to be issued under
such Warrants from the Proceeds of the related Pledged Treasury Securities or
the Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, as the case may be. Promptly, after
11:00 a.m. (New York City time) on the Business Day immediately prior to the
Warrant Settlement Date, the Securities Intermediary shall invest the Cash
Proceeds of the maturing Pledged Treasury Securities or the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, in Permitted Investments in clause 6 of
the


                                       17
<PAGE>

definition of Permitted Investments, unless prior to 10:30 a.m. (New York City
time), the Company shall otherwise instruct the Securities Intermediary as to
the type of Permitted Investments in which any such Cash Proceeds shall be
invested. Without receiving any instruction from any such Holder, the Collateral
Agent shall apply the Proceeds of the related Pledged Treasury Securities or
such Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, as the case may be, to the settlement
of such Warrants on the Warrant Settlement Date. In the event the sum of the
Proceeds from the related Pledged Treasury Securities or such Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio as the case may be, and the investment earnings from
the investment in Permitted Investments exceeds the aggregate Purchase Price of
the Warrants being settled thereby, the Collateral Agent shall instruct the
Securities Intermediary to distribute such excess, when received, to the Warrant
Agent for the benefit of such Holder for distribution to such Holder.

         (c) Pursuant to the Remarketing Agreement and subject to the terms of
the Supplemental Remarketing Agreement, on or prior to the fifth Business Day
immediately preceding May 17, 2004 or the Final Remarketing Date, as applicable,
or in the event of any Additional Remarketing, timely notice of which shall have
been provided to the Custodial Agent by the Remarketing Agent, pursuant to the
Remarketing Agreement or any Supplemental Remarketing Agreement, on or prior to
the second Business Day following the notification by the Remarketing Agent of
its intention to conduct an Additional Remarketing, but no earlier than the
Payment Date immediately preceding any such date, Holders of Separate Securities
may elect to have their Separate Securities remarketed by delivering their
Separate Securities, together with a notice of such election, substantially in
the form of EXHIBIT F hereto, to the Custodial Agent. The Custodial Agent shall
hold such Separate Securities in an account separate from the Collateral
Account. A Holder of Separate Securities electing to have its Separate
Securities remarketed will also have the right to withdraw such election by
written notice to the Custodial Agent, substantially in the form of EXHIBIT G
hereto, on or prior to the second Business Day immediately preceding the
relevant remarketing date, as applicable, upon which notice the Custodial Agent
shall return such Separate Securities to such Holder. On the Business Day
immediately preceding any Initial Remarketing Date or the Final Remarketing
Date, as applicable, the Custodial Agent shall notify the Remarketing Agent and
the Company of the aggregate principal amount of the Separate Securities to be
remarketed and will deliver to the Remarketing Agent for remarketing all
Separate Securities delivered to the Custodial Agent pursuant to this Section
5.6(c) and not withdrawn pursuant to the terms hereof prior to such date. After
deducting the Remarketing Fee to the extent permitted under the terms of the
Remarketing Agreement, the Remarketing Agent will remit to the Custodial Agent
the remaining portion of the proceeds for the benefit of such Holders. In the
event of any Failed Initial Remarketing or a Failed Final Remarketing, as
applicable, the Remarketing Agent will promptly return such Separate Securities
to the Custodial Agent for redelivery to such Holders.


                                       18
<PAGE>

         (d) The Warrant Agent, on behalf of itself and the Holders,
acknowledges and irrevocably agrees that any remarketing of the Notes on any
Initial Remarketing Date or the Final Remarketing Date shall not constitute a
foreclosure of the Pledge of or other exercise of default remedies with respect
to the Notes within the meaning of the Code, but rather shall constitute a
voluntary sale of the Notes by and on behalf of the Holders and the Warrant
Agent.

Section 5.8 TAX EVENT REDEMPTION.

         If the Securities Intermediary receives notice that a Tax Event
Redemption has occurred prior to the Warrant Settlement Date, the Securities
Intermediary in accordance with SECTION 7.2 hereof shall apply the Tax Event
Redemption Amount to purchase the Treasury Portfolio from the Quotation Agent
and the Securities Intermediary shall credit the Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio to the Collateral Account and shall transfer the Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio to the Warrant Agent for distribution to the Holders of the
Equity Units. Upon credit to the Collateral Account of the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio having a Value equal to the aggregate principal amount of the
Pledged Notes, the Collateral Agent shall release the Pledged Notes from the
Pledge and shall promptly transfer such Notes to the Company. If a Tax Event
Redemption has occurred following the Warrant Settlement Date, the Securities
Intermediary shall distribute the Tax Event Redemption Amount to the Warrant
Agent for distribution to the Holders of the Equity Units.

                                    ARTICLE 6
                          VOTING RIGHTS - PLEDGED NOTES

         The Warrant Agent may exercise, or refrain from exercising, any and all
voting and other consensual rights pertaining to the Pledged Notes or any part
thereof for any purpose not inconsistent with the terms of this Agreement and in
accordance with the terms of the Warrant Agreement; provided, that the Warrant
Agent shall not exercise or shall not refrain from exercising such right, as the
case may be, if and to the extent that the Warrant Agent shall have received an
Officers' Certificate stating to the effect that, in the judgment of the
Company, such action or inaction, as the case may be, would impair or otherwise
have a material adverse effect on the value of all or any of the Pledged Notes
and setting forth what action the Warrant Agent should engage in or refrain from
engaging in, as the case may be; and provided, further, that the Warrant Agent,
upon receipt of such Officer's Certificate, shall give the Company and the
Collateral Agent at least five Business Days' prior written notice of the manner
in which it intends to exercise, or its reasons for refraining from exercising,
any such right. Upon receipt of any notices and other communications in respect
of any Pledged Notes, including notice of any meeting at which holders of the
Pledged Notes are entitled to vote, or solicitation of consents, waivers or
proxies of holders of the Pledged Notes, the Collateral Agent shall use
reasonable efforts to send promptly to the Warrant Agent such notice or


                                       19
<PAGE>

communication, and as soon as reasonably practicable after receipt of a written
request therefor from the Warrant Agent execute and deliver to the Warrant Agent
such proxies and other instruments in respect of such Pledged Notes (in form and
substance satisfactory to the Collateral Agent) as are prepared by the Warrant
Agent in respect of such Pledged Notes. Each Holder of a Pledged Note or a
Pledged Treasury Security, as the case may be, will retain beneficial ownership
(and, in the case of Pledged Notes, any voting rights) of the relevant security,
subject to the Pledge.

                                    ARTICLE 7
                               RIGHTS AND REMEDIES

Section 7.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT.

         (a) In addition to the rights and remedies specified in SECTION 5.6
hereof or otherwise available at law or in equity, after an event of default (as
specified in Section 7.1(b) below) hereunder, the Collateral Agent shall have
all of the rights and remedies with respect to the Collateral of a secured party
under the UCC (whether or not the UCC is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Without limiting the generality of the foregoing, such remedies may
include, to the extent permitted by applicable law, (1) retention of the Pledged
Notes, Pledged Treasury Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) in full
satisfaction of the Holders' obligations under the Warrants and the Warrant
Agreement or (2) sale of the Pledged Notes, Pledged Treasury Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in one or more public or private sales.

         (b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, or on account of principal payments of any Pledged
Treasury Securities as provided in ARTICLE 3 hereof, in satisfaction of the
Obligations of the Holder of the Equity Units (if a Tax Event Redemption has
occurred) of which such appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio or the
Holder of the Treasury Equity Units of which such Pledged Treasury Securities,
as applicable, is a part under the related Warrants, the inability to make such
payments shall constitute an event of default hereunder and the Collateral Agent
shall have and may exercise, with reference to such Pledged Treasury Securities
or the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as applicable, any and
all of the rights and remedies available to a secured party under the UCC and
the TRADES Regulations after default by a debtor, and as otherwise granted
herein or under any other law.


                                       20
<PAGE>

         (c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of
the Pledged Notes, (ii) the principal amount of the Pledged Treasury Securities
and (iii) the principal amount of the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, subject, in each case, to the provisions of ARTICLE 3 hereof, and as
otherwise granted herein.

         (d) The Warrant Agent and each Holder of Securities agrees that, from
time to time, upon the written request of the Company or the Warrant Agent, such
Holder shall execute and deliver such further documents and do such other acts
and things as the Company may reasonably request in order to maintain the
Pledge, and the perfection and priority thereof, and to confirm the rights of
the Company and the Collateral Agent hereunder. The Warrant Agent shall have no
liability to any Holder for executing any documents or taking any such acts
requested by the Company hereunder, except for liability for its own gross
negligent acts, its own gross negligent failure to act or its own willful
misconduct.

Section 7.2 TAX EVENT REDEMPTION.

         Upon the occurrence of a Tax Event Redemption prior to the Warrant
Settlement Date, the Redemption Price payable on the Tax Event Redemption Date
with respect to the Tax Event Redemption Amount shall be credited to the
Collateral Account by the Indenture Trustee (or paying agent under the
Indenture) on or prior to 11:00 a.m., New York City time, on such Tax Event
Redemption Date, by wire transfer of immediately available funds. The Collateral
Agent is hereby authorized to present the Pledged Notes for payment as may be
required by their terms. Upon receipt of such funds, the Pledged Notes shall be
released by the Collateral Agent or from the Collateral Account. In the event
such funds are credited to the Collateral Account, the Collateral Agent, at the
written direction of the Company, shall instruct the Securities Intermediary to
(a) apply an amount equal to the Redemption Amount of such Redemption Price to
purchase the Treasury Portfolio from the Quotation Agent for credit to the
Collateral Account and (b) promptly remit the remaining portion of such
Redemption Price, if any, to the Warrant Agent for payment to the Holders of
Equity Units.

Section 7.3 INITIAL AND ADDITIONAL REMARKETING; TREASURY PORTFOLIO DELIVERY TO
            REMARKETING AGENT OR ITS DESIGNATED ENTITY.

         (a) Unless a Tax Event Redemption shall have occurred, the Collateral
Agent shall, by 11:00 a.m., New York City time, on the fifth Business Day
immediately preceding May 17, 2004 or, in the case of any Additional Remarketing
subsequent to that date (written notice of which the Collateral Agent shall have
received from the Remarketing Agent), by 11:00 a.m., New York City time on the
second Business Day immediately preceding the date of such Additional
Remarketing, without any instruction from any Holder of Equity Units, present
the related Pledged Notes to the Remarketing


                                       21
<PAGE>

Agent for remarketing other than those Pledged Notes in respect of which a
Holder shall have delivered a notice to the Remarketing Agent in the form set
forth as EXHIBIT H hereto together with the Treasury Portfolio by 11:00 a.m.,
New York City time, on the fifth Business Day immediately preceding the Initial
Remarketing Date, or by 11:00 a.m., New York City time, on the second Business
Day preceding the date of the Additional Remarketing. Upon receiving such
Pledged Notes, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement and the Supplemental Remarketing Agreement, will use its reasonable
efforts to remarket such Pledged Notes, on the Initial Remarketing Date at a
price of approximately 100.25% (but not less than 100%) of the Treasury
Portfolio Purchase Price. After deducting as the Remarketing Fee an amount not
exceeding 25 basis points (.25%) of the amount of the Treasury Portfolio
Purchase Price from any amount of such Proceeds in excess of the Treasury
Portfolio Purchase Price, the Remarketing Agent will remit the entire amount of
the Proceeds of such remarketing to the Collateral Agent on or prior to 12:00
p.m., New York City time, on such remarketing date, by wire transfer in
immediately available funds, per the instructions and to the account specified
in SECTION 4.11 hereof, in exchange for the Pledged Notes. In the event a Holder
elects to deliver its Applicable Ownership Interest in the Treasury Portfolio
such delivery shall be made to the Remarketing Agent on or prior to 11:00 a.m.,
New York City time, on the fifth Business Day immediately preceding the Initial
Remarketing Date, or by 11:00 a.m., New York City time, on the second Business
Day preceding the date of the Additional Remarketing, at such a place and at
such account as may be designated therefor by the Remarketing Agent. The
Remarketing Agent will deliver to the Collateral Agent any Treasury Portfolios
delivered to it, no later than 5:00 p.m. on the second Business Day preceding
such remarketing date, together with the name of the Holder that delivered such
Treasury Portfolio, the value of the Pledged Notes that may be released from the
Collateral in substitution therefor and such other information as the Collateral
Agent may request in order to effect such substitution. In the event the
Collateral Agent receives from the Remarketing Agent such proceeds from an
Initial Remarketing, the Collateral Agent will, at the written direction of the
Company, apply an amount equal to the Treasury Portfolio Purchase Price to
purchase from the Quotation Agent, the Treasury Portfolio and promptly remit any
remaining portion of such proceeds. to the Warrant Agent for payment to the
Holders of the Equity Units

         (b) The Collateral Agent shall Transfer the Treasury Portfolio (whether
purchased with the proceeds received from the Remarketing Agent on account of a
Successful Initial Remarketing or from the Remarketing Agent on account of a
delivery to the Remarketing Agent) to the Collateral Account to secure the
obligation of all Holders of Equity Units to purchase Common Stock of the
Company under the Warrants constituting a part of such Equity Units, in
substitution for the Pledged Notes. Thereafter the Collateral Agent shall have
such security interests, rights and obligations with respect to the Treasury
Portfolio as it had in respect of the Pledged Notes, as provided herein, and any
reference herein to the Pledged Notes, shall be deemed to be reference to such
Treasury Portfolio, and any reference herein to interest payments on the Pledged
Notes, shall be deemed to be a reference to interest payments on such Treasury
Portfolio.


                                       22
<PAGE>

         (c) In connection with a Collateral substitution of the Pledged Notes
pursuant to SECTION 7.3(A) hereof, subject to receipt by the Collateral Agent of
the Applicable Ownership Interest of the Treasury Portfolio required by Section
5.02 of the Warrant Agreement, the Collateral Agent shall release, upon written
instruction from the Warrant Agent substantially in the form of EXHIBIT J
hereto, the Pledged Notes underlying the number of Equity Units indicated in
such instruction from the Pledge and transfer, without recourse, such released
Pledged Notes, free and clear of any lien, pledge or security interest created
hereby, to the Warrant Agent for delivery by the Warrant Agent pursuant to the
provisions of the Warrant Agreement. The Applicable Ownership Interest of the
Treasury Portfolio received by the Collateral Agent in connection with the
Collateral substitution shall be subject to the Pledge.

Section 7.4 SUBSTITUTIONS.

         Whenever a Holder has the right to substitute Treasury Securities,
Notes or security entitlements for any of them or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, for financial
assets held in the Collateral Account, such substitution shall not constitute a
novation of the security interest created hereby.

                                    ARTICLE 8
                    REPRESENTATIONS AND WARRANTIES; COVENANTS

Section 8.1 REPRESENTATIONS AND WARRANTIES.

         Each Holder from time to time, acting through the Warrant Agent as
attorney-in-fact (it being understood that the Warrant Agent shall not be liable
for any representation or warranty made by or on behalf of a Holder), hereby
represents and warrants to the Collateral Agent and the Company (with respect to
such Holder's interest in the Collateral), which representations and warranties
shall be deemed repeated on each day a Holder Transfers Collateral that:

                  (1) such Holder has the power to grant a security interest in
         and lien on the Collateral;

                  (2) such Holder is the sole beneficial owner of the Collateral
         and, in the case of Collateral delivered in physical form, is the sole
         Holder of such Collateral and is the sole beneficial owner of, or has
         the right to Transfer, the Collateral it Transfers to the Collateral
         Agent or the Securities Intermediary for credit to the Collateral
         Account, free and clear of any security interest, lien, encumbrance,
         call, liability to pay money or other restriction other than the
         security interest and lien granted under ARTICLE 2 hereof;

                  (3) upon the Transfer of the Collateral to the Collateral
         Agent or the Securities Intermediary for credit to the Collateral
         Account, the Collateral Agent,


                                       23
<PAGE>

         for the benefit of the Company, will have a valid and perfected first
         priority security interest therein (assuming that any central clearing
         operation or any securities intermediary or other entity not within the
         control of the Holder involved in the Transfer of the Collateral,
         including the Company, or Collateral Agent and the Securities
         Intermediary on the Company's behalf, gives the notices and takes the
         action required of it hereunder and under applicable law for perfection
         of that interest and assuming the establishment and exercise of control
         pursuant to ARTICLE 4 hereof); and

                  (4) the execution and performance by the Holder of its
         obligations under this Agreement will not result in the creation of any
         security interest, lien or other encumbrance on the Collateral other
         than the security interest and lien granted under ARTICLE 2 hereof or
         violate any provision of any existing law or regulation applicable to
         it or of any mortgage, charge, pledge, indenture, contract or
         undertaking to which it is a party or which is binding on it or any of
         its assets.

Section 8.2 COVENANTS.

         The Holders from time to time, acting through the Warrant Agent as
their attorney-in-fact (it being understood that the Warrant Agent shall not be
liable for any covenant made by or on behalf of a Holder), hereby covenant to
the Collateral Agent that for so long as the Collateral remains subject to the
Pledge:

                  (1) neither the Warrant Agent nor such Holders will create or
         purport to create or allow to subsist any mortgage, charge, lien,
         pledge or any other security interest whatsoever over the Collateral or
         any part of it other than pursuant to this Agreement; and

                  (2) neither the Warrant Agent nor such Holders will sell or
         otherwise dispose (or attempt to dispose) of the Collateral or any part
         of it except for the beneficial interest therein, subject to the Pledge
         hereunder, transferred in connection with the Transfer of the
         Securities.

                                    ARTICLE 9
                THE COLLATERAL AGENT, THE SECURITIES INTERMEDIARY
                             AND THE CUSTODIAL AGENT

         It is hereby agreed as follows:

Section 9.1 APPOINTMENT, POWERS AND IMMUNITIES.

         The Collateral Agent, the Securities Intermediary and the Custodial
Agent shall act as agents for the Company hereunder with such powers as are
specifically vested in the Collateral Agent, the Securities Intermediary and the
Custodial Agent by the terms of this Agreement, together with such other powers
as are reasonably incidental thereto, and


                                       24
<PAGE>

shall have no duties, fiduciary or otherwise, to any other Person. Each of the
Collateral Agent, the Securities Intermediary and the Custodial Agent and the
Securities Intermediary shall:

                  (1) have no duties or responsibilities except those expressly
         set forth in this Agreement and no implied covenants or obligations
         shall be inferred from this Agreement against any of them, nor shall
         any of them be bound by the provisions of any agreement by any party
         hereto beyond the specific terms hereof;

                  (2) not be responsible for any recitals contained in this
         Agreement, or in any certificate or other document referred to or
         provided for in, or received by it under, this Agreement, the
         Securities or the Warrant Agreement, or for the value, validity,
         effectiveness, genuineness, enforceability or sufficiency of this
         Agreement (other than as against the Collateral Agent), the Securities
         or the Warrant Agreement or any other document referred to or provided
         for herein or therein, or for any failure by the Company or any other
         Person (except the Collateral Agent, the Securities Intermediary or the
         Custodial Agent, as the case may be) to perform any of its obligations
         hereunder or thereunder, or for the attachment, perfection, priority
         or, except as expressly required hereby, maintenance of any lien or
         security interest created or intended to be created hereunder;

                  (3) not be required to initiate or conduct any litigation or
         collection proceedings hereunder (except in the case of the Collateral
         Agent pursuant to directions furnished under SECTION 9.2 hereof,
         subject to SECTION 9.6 hereof);

                  (4) not be responsible for any action taken, suffered or
         omitted to be taken by it hereunder or under any other document or
         instrument referred to or provided for herein or in connection herewith
         or therewith, except for its own gross negligence or willful
         misconduct; and

                  (5) not be required to advise any party as to selling or
         retaining, or taking or refraining from taking any action with respect
         to, any securities or other property deposited hereunder.

Subject to the foregoing, during the term of this Agreement, the Collateral
Agent and the Securities Intermediary shall take all reasonable action in
connection with the safekeeping and preservation of the Collateral hereunder.

         No provision of this Agreement shall require the Collateral Agent, the
Securities Intermediary or the Custodial Agent to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Securities
Intermediary or the Custodial Agent be liable for any amount in excess of the
Value of the Collateral. Notwithstanding the foregoing, each of the Collateral
Agent, the Securities Intermediary, the Custodial Agent and the Warrant


                                       25
<PAGE>

Agent in its individual capacity hereby waives any right of setoff, bankers'
lien, liens or perfection rights as securities intermediary or any counterclaim
with respect to any of the Collateral.

Section 9.2 INSTRUCTIONS OF THE COMPANY.

         The Company shall have the right, by one or more written instruments
executed and delivered to the Collateral Agent, the Securities Intermediary or
the Custodial Agent, as the case may be, to direct the time, method and place of
conducting any proceeding for the realization of any right or remedy available
to the Collateral Agent, or of exercising any power conferred on the Collateral
Agent, the Securities Intermediary or the Custodial Agent, as the case may be,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement and (ii) the Collateral
Agent, the Securities Intermediary and the Custodial Agent shall be adequately
indemnified as provided herein and shall not be subject to personal liability.
Nothing contained in this SECTION 9.2 shall impair the right of the Collateral
Agent in its discretion to take any action or omit to take any action which it
deems proper and which is not inconsistent with such direction.

Section 9.3 RELIANCE BY COLLATERAL AGENT, SECURITIES INTERMEDIARY AND CUSTODIAL
            AGENT.

         Each of the Collateral Agent, the Securities Intermediary and the
Custodial Agent shall be entitled to rely upon any certification, order,
judgment, opinion, notice or other written communication (including, without
limitation, any thereof by telecopy) believed by it to be genuine and to have
been signed or sent by or on behalf of the proper Person or Persons (without
being required to determine the correctness of any fact stated therein) and
consult with and rely upon advice, opinions and statements of legal counsel and
other experts selected by the Collateral Agent, the Securities Intermediary, or
the Custodial Agent, as the case may be. Each of the Collateral Agent and the
Securities Intermediary may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon. As to any matters not expressly provided
for by this Agreement, the Collateral Agent, the Securities Intermediary and the
Custodial Agent shall in all cases be entitled to receive and shall be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.

Section 9.4 RIGHTS IN OTHER CAPACITIES.

         The Collateral Agent, the Securities Intermediary and the Custodial
Agent and their affiliates may (without having to account therefor to the
Company) accept deposits from, lend money to, make their investments in and
generally engage in any kind of banking, trust or other business with the
Warrant Agent, any other Person interested


                                       26
<PAGE>

herein and any Holder of Securities (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent, the Securities
Intermediary or the Custodial Agent, as the case may be, and the Collateral
Agent, the Securities Intermediary and the Custodial Agent and their affiliates
may accept fees and other consideration from the Warrant Agent and any Holder of
Securities without having to account for the same to the Company; provided that
each of the Securities Intermediary, the Collateral Agent and the Custodial
Agent covenants and agrees with the Company that it shall not accept, receive or
permit there to be created in favor of itself and shall take no affirmative
action to permit there to be created in favor of any other Person, any security
interest, lien or other encumbrance of any kind in or upon the Collateral other
than the lien created by the Pledge.

Section 9.5 NON-RELIANCE ON COLLATERAL AGENT, SECURITIES INTERMEDIARY AND
            CUSTODIAL AGENT.

         Neither the Securities Intermediary, the Collateral Agent nor the
Custodial Agent shall be required to keep itself informed as to the performance
or observance by the Warrant Agent or any Holder of Securities of this
Agreement, the Warrant Agreement, the Securities or any other document referred
to or provided for herein or therein or in connection herewith or therewith or
to inspect the properties or books of the Warrant Agent or any Holder of
Securities. None of the Collateral Agent, the Securities Intermediary or the
Custodial Agent shall have any duty or responsibility to provide the Company
with any credit or other information concerning the affairs, financial condition
or business of the Warrant Agent or any Holder of Securities (or any of their
respective affiliates) that may come into the possession of the Collateral
Agent, the Securities Intermediary or and the Custodial Agent or any of their
respective affiliates.

Section 9.6 COMPENSATION AND INDEMNITY.

         The Company agrees to:

                  (1) pay the Collateral Agent, the Securities Intermediary and
         the Custodial Agent from time to time such compensation as shall be
         agreed in writing between the Company and the Collateral Agent, the
         Securities Intermediary or the Custodial Agent, as the case may be, for
         all services rendered by them hereunder;

                  (2) indemnify and hold harmless the Collateral Agent, the
         Securities Intermediary and the Custodial Agent and each of their
         respective directors, officers, agents and employees (collectively, the
         "INDEMNITEES"), harmless from and against any and all claims,
         liabilities, losses, damages, fines, penalties and expenses (including
         reasonable fees and expenses of counsel) (collectively, "LOSSES" and
         individually, a "LOSS") that may be imposed on, incurred by, or
         asserted against, the Indemnitees or any of them for following any
         instructions or other directions upon which either the Collateral
         Agent, the Securities


                                       27
<PAGE>

         Intermediary or the Custodial Agent is entitled to rely pursuant to the
         terms of this Agreement; and

                  (3) in addition to and not in limitation of paragraph (2)
         immediately above, indemnify and hold the Indemnitees and each of them
         harmless from and against any and all Losses that may be imposed on,
         incurred by or asserted against, the Indemnitees or any of them in
         connection with or arising out of the Collateral Agent's, the
         Securities Intermediary's or the Custodial Agent's acceptance or
         exercise or performance of its powers and duties under this Agreement,
         including the costs and expenses of defending itself against any claim
         or liability in connection with the exercise or performance of any of
         its powers or duties hereunder provided the Collateral Agent, the
         Securities Intermediary or the Custodial Agent have not acted with
         gross negligence or engaged in willful misconduct with respect to the
         specific Loss against which indemnification is sought.

         Without prejudice to its rights hereunder, when any of the Collateral
Agent or Securities Intermediary incurs expenses or renders services after a
Termination Event occurs, the expenses and compensation for the services are
intended to constitute expenses of administration under the Bankruptcy Code or
any applicable state bankruptcy, insolvency or other similar law.

Section 9.7 FAILURE TO ACT.

         In the event of any ambiguity in the provisions of this Agreement or
any dispute between or conflicting or adverse claims by or among the parties
hereto or any other Person with respect to any funds or property deposited
hereunder, then at its sole option, each of the Collateral Agent, the Securities
Intermediary and the Custodial Agent shall be entitled, after prompt notice to
the Company and the Warrant Agent, to refuse to comply with any and all such
provisions or claims, demands or instructions with respect to such property or
funds so long as such ambiguity, dispute or conflict shall continue, and the
Collateral Agent, the Securities Intermediary and the Custodial Agent shall not
be or become liable in any way to any of the parties hereto for its failure or
refusal to comply with such ambiguous provision or conflicting or adverse
claims, demands or instructions. The Collateral Agent, the Securities
Intermediary and the Custodial Agent shall be entitled to refuse to act until
either:

                  (1) such ambiguous provisions or conflicting or adverse
         claims, demands or instructions shall have been finally determined by a
         court of competent jurisdiction or settled by agreement between the
         conflicting parties as evidenced in a writing satisfactory to the
         Collateral Agent, the Securities Intermediary or the Custodial Agent,
         as the case may be; or

                  (2) the Collateral Agent, the Securities Intermediary or the
         Custodial Agent, as the case may be, shall have received security or an
         indemnity


                                       28
<PAGE>

         satisfactory to it sufficient to save it harmless from and against any
         and all loss, liability or reasonable out-of-pocket expense which it
         may incur by reason of its acting.

The Collateral Agent, the Securities Intermediary and the Custodial Agent may in
addition elect to commence an interpleader action or seek other judicial relief
or orders as the Collateral Agent, the Securities Intermediary or the Custodial
Agent may deem necessary. Notwithstanding anything contained herein to the
contrary, neither the Collateral Agent, the Securities Intermediary nor the
Custodial Agent shall be required to take any action that is in its opinion
contrary to law or to the terms of this Agreement, or which would in its opinion
subject it or any of its officers, employees or directors to liability.

Section 9.8 RESIGNATION OF COLLATERAL AGENT, SECURITIES INTERMEDIARY AND
            CUSTODIAL AGENT.

         (a) Subject to the appointment and acceptance of a successor Collateral
Agent, Securities Intermediary or Custodial Agent as provided below:

                  (1) the Collateral Agent, the Securities Intermediary and the
         Custodial Agent may resign at any time by giving notice thereof to the
         Company and the Warrant Agent as attorney-in-fact for the Holders of
         Securities;

                  (2) the Collateral Agent, the Securities Intermediary and the
         Custodial Agent may be removed at any time by the Company; and

                  (3) if the Collateral Agent, Securities Intermediary or the
         Custodial Agent fails to perform any of its material obligations
         hereunder in any material respect for a period of not less than 20 days
         after receiving written notice of such failure by the Warrant Agent and
         such failure shall be continuing, the Collateral Agent, the Securities
         Intermediary or the Custodial Agent may be removed by the Warrant
         Agent.

The Warrant Agent shall promptly notify the Company of any removal of the
Collateral Agent, Securities Intermediary or Custodial Agent pursuant to clause
(3) of the immediately preceding sentence. Upon any such resignation or removal,
the Company shall have the right to appoint a successor Collateral Agent,
Securities Intermediary or the Custodial Agent, as the case may be. If no
successor Collateral Agent, Securities Intermediary or Custodial Agent, as the
case may be, shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Collateral Agent's, Securities
Intermediary's or Custodial Agent's giving of notice of resignation or the
Company or the Warrant Agent giving notice of such removal, then the retiring
Collateral Agent, Securities Intermediary or Custodial Agent, as the case may
be, may petition any court of competent jurisdiction for the appointment of a
successor Collateral Agent, Securities Intermediary or the Custodial Agent, as
the case may be. Each of the Collateral


                                       29
<PAGE>

Agent, the Securities Intermediary and Custodial Agent shall be a bank or a
national banking association which has an office (or an agency office) in New
York City with a combined capital and surplus of at least $50,000,000 and shall
not be the Warrant Agent or any of its affiliates. Upon the acceptance of any
appointment as Collateral Agent, Securities Intermediary or Custodial Agent, as
the case may be, hereunder by a successor Collateral Agent, Securities
Intermediary or Custodial Agent, as the case may be, such successor shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, Securities Intermediary, or
Custodial Agent, as the case may be, and the retiring Collateral Agent,
Securities Intermediary or Custodial Agent, as the case may be, shall take all
appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor. The retiring Collateral Agent,
Securities Intermediary or Custodial Agent shall, upon such succession, be
discharged from its duties and obligations as Collateral Agent, Securities
Intermediary or Custodial Agent hereunder. After any retiring Collateral
Agent's, Securities Intermediary's or Custodial Agent's resignation hereunder as
Collateral Agent, Securities Intermediary or Custodial Agent, the provisions of
ARTICLE 9 and SECTION 11.7 hereof shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent, the Securities Intermediary or the Custodial Agent.

Section 9.9 RIGHT TO APPOINT AGENT OR ADVISOR.

         The Collateral Agent shall have the right to appoint agents or advisors
in connection with any of its duties hereunder, and the Collateral Agent shall
not be liable for any action taken or omitted by, or in reliance upon the advice
of, such agents or advisors selected in good faith. The appointment of agents
pursuant to this SECTION 9.9 shall be subject to prior consent of the Company,
which consent shall not be unreasonably withheld.

Section 9.10 SURVIVAL.

         The provisions of ARTICLE 9 and SECTION 11.7 hereof shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent, the Securities Intermediary or the Custodial Agent.

Section 9.11 EXCULPATION.

         Anything contained in this Agreement to the contrary notwithstanding,
in no event shall the Collateral Agent, the Securities Intermediary or the
Custodial Agent or their officers, directors, employees or agents be liable
under this Agreement for indirect, special, punitive, or consequential loss or
damage of any kind whatsoever, including, but not limited to, lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent, the Securities Intermediary or the Custodial Agent, or any of them.


                                       30
<PAGE>

         None of the Collateral Agent, Securities Intermediary or Custodial
Agent shall be responsible or liable for any failure or delay in the performance
of their respective obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control,
including without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; epidemics; riots; interruptions, loss
or malfunctions of utilities, computer (hardware or software) or communications
service; accidents; labor disputes; acts of civil or military authority or
governmental actions; it being understood that the Collateral Agent, Securities
Intermediary or Custodial Agent, as the case may be, shall use reasonable
efforts which are consistent with accepted practices in the banking industry to
resume performance as soon as practicable under the circumstances.

                                   ARTICLE 10
                                    AMENDMENT

Section 10.1 AMENDMENT WITHOUT CONSENT OF HOLDERS.

         Without the consent of any Holders, the Company, the Collateral Agent,
the Securities Intermediary, the Custodial Agent and the Warrant Agent, at any
time and from time to time, may amend this Agreement, in form satisfactory to
the Company, the Collateral Agent, the Securities Intermediary, the Custodial
Agent and the Warrant Agent, to:

                  (1) evidence the succession of another Person to the Company,
         and the assumption by any such successor of the covenants of the
         Company;

                  (2) evidence and provide for the acceptance of appointment
         hereunder by a successor Collateral Agent, Securities Intermediary,
         Custodial Agent or Warrant Agent;

                  (3) add to the covenants of the Company for the benefit of the
         Holders, or surrender any right or power herein conferred upon the
         Company, provided such covenants or such surrender do not adversely
         affect the validity, perfection or priority of the Pledge created
         hereunder; or

                  (4) cure any ambiguity (or formal defect), correct or
         supplement any provisions herein which may be inconsistent with any
         other such provisions herein, or make any other provisions with respect
         to such matters or questions arising under this Agreement, provided
         such action shall not adversely affect the interests of the Holders.

Section 10.2 AMENDMENT WITH CONSENT OF HOLDERS.

         With the consent of the Holders of not less than a majority of the
Warrants at the time outstanding, by Act of such Holders delivered to the
Company, the Warrant Agent,


                                       31
<PAGE>

the Securities Intermediary, the Collateral Agent and the Custodial Agent, the
Company, the Warrant Agent, the Collateral Agent, the Securities Intermediary
and the Custodial Agent may amend this Agreement for the purpose of modifying in
any manner the provisions of this Agreement or the rights of the Holders in
respect of the Securities; provided, however, that no such amendment shall,
without the unanimous consent of the Holders of each Outstanding Security
adversely affected thereby:

                  (1) Change the amount or type of Collateral underlying a
         Security (except for the rights of holders of Equity Units to
         substitute the Treasury Securities for the Pledged Notes, or the rights
         of Holders of Treasury Equity Units to substitute Notes for the Pledged
         Treasury Securities), impair the right of the Holder of any Security to
         receive distributions on the underlying Collateral or otherwise
         adversely affect the Holder's rights in or to such Collateral; or

                  (2) otherwise effect any action that would require the consent
         of the Holder of each Outstanding Security affected thereby pursuant to
         the Warrant Agreement if such action were effected by an agreement
         supplemental thereto; or

                  (3) reduce the percentage of Warrants the consent of whose
         Holders is required for any such amendment;

provided that if any amendment referred to above would adversely affect only the
Equity Units or only the Treasury Equity Units, then only the affected class of
Holders as of the record date for the Holders entitled to vote thereon will be
entitled to vote on such amendment, and such amendment shall not be effective
except with the consent of Holders of not less than a majority of such class;
provided, further, that the unanimous consent of the Holders of each outstanding
Warrant of such class affected thereby shall be required to approve any
amendment specified in clauses (1) through (3) above.

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

Section 10.3 EXECUTION OF AMENDMENTS.

         In executing any amendment permitted by this Article, the Collateral
Agent, the Securities Intermediary, the Custodial Agent and the Warrant Agent
shall be entitled to receive and (subject to Section 7.01 of the Warrant
Agreement with respect to the Warrant Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent, if
any, to the execution and delivery of such amendment have been satisfied.


                                       32
<PAGE>

Section 10.4 EFFECT OF AMENDMENTS.

         Upon the execution of any amendment under this Article, this Agreement
shall be modified in accordance therewith, and such amendment shall form a part
of this Agreement for all purposes; and every Holder of Certificates theretofore
or thereafter authenticated, executed on behalf of the Holders and delivered
under the Warrant Agreement shall be bound thereby.

Section 10.5 REFERENCE TO AMENDMENTS.

         Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any amendment pursuant to this Article may, and
shall if required by the Collateral Agent or the Warrant Agent, bear a notation
in form approved by the Warrant Agent and the Collateral Agent as to any matter
provided for in such amendment. If the Company shall so determine, new
Certificates so modified as to conform, in the opinion of the Collateral Agent,
the Warrant Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Warrant Agent in accordance with the Warrant Agreement in
exchange for Outstanding Certificates.

                                   ARTICLE 11
                                  MISCELLANEOUS

Section 11.1 NO WAIVER.

         No failure on the part of the Collateral Agent, the Securities
Intermediary, the Custodial Agent or any of their respective agents to exercise,
and no course of dealing with respect to, and no delay in exercising, any right,
power or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise by the Collateral Agent, the Securities Intermediary,
the Custodial Agent or any of their respective agents of any right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies herein are cumulative and are
not exclusive of any remedies provided by law.

Section 11.2 GOVERNING LAW.

         THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. The Company, the Collateral Agent, the
Securities Intermediary, the Custodial Agent, the Warrant Agent and the Holders
from time to time of the Securities, acting through the Warrant Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent, the Securities Intermediary, the
Custodial Agent, the


                                       33
<PAGE>

Warrant Agent and the Holders from time to time of the Securities, acting
through the Warrant Agent as their attorney-in-fact, irrevocably waive, to the
fullest extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum. The Company, the Collateral Agent, the
Securities Intermediary, the Custodial Agent, the Warrant Agent and the Holders
from time to time of the Securities, acting through the Warrant Agent as their
attorney-in-fact, also waive all right to trial by jury in any action,
proceeding or counterclaim arising out of this Agreement or the transactions
contemplated hereby.

Section 11.3 NOTICES.

         All notices, requests, consents and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing (including,
without limitation, by telecopy) delivered to the intended recipient at the
"ADDRESS FOR NOTICES" specified below its name on the signature pages hereof or,
as to any party, at such other address as shall be designated by such party in a
notice to the other parties. Except as otherwise provided in this Agreement, all
such communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.

Section 11.4 SUCCESSORS AND ASSIGNS.

         This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Securities Intermediary, the Custodial Agent and the Warrant Agent, and the
Holders from time to time of the Securities, by their acceptance of the same,
shall be deemed to have agreed to be bound by the provisions hereof and to have
ratified the agreements of, and the grant of the Pledge hereunder by, the
Warrant Agent.

Section 11.5 COUNTERPARTS.

         This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.

Section 11.6 SEVERABILITY.

         If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or


                                       34
<PAGE>

unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.

Section 11.7 EXPENSES, ETC.

         The Company agrees to reimburse the Collateral Agent, the Securities
Intermediary and the Custodial Agent for:

                  (1) all reasonable costs and expenses of the Collateral Agent,
         the Securities Intermediary and the Custodial Agent (including, without
         limitation, the reasonable fees and expenses of counsel to the
         Collateral Agent, the Securities Intermediary and the Custodial Agent),
         in connection with the negotiation, preparation, execution and delivery
         or performance of any services under or in connection with this
         Agreement, including any modification, supplement or waiver of any of
         the terms of this Agreement;

                  (2) in addition to and not in limitation of paragraph (1)
         immediately above, all reasonable costs and expenses of the Collateral
         Agent, the Securities Intermediary and the Custodial Agent (including,
         without limitation, reasonable fees and expenses of counsel) in
         connection with (i) any enforcement or proceedings resulting or
         incurred in connection with causing any Holder of Securities to satisfy
         its obligations under the Warrants forming a part of the Securities and
         (ii) the enforcement of SECTION 9.6 and this SECTION 11.7;

                  (3) all transfer, stamp, documentary or other similar taxes,
         assessments or charges levied by any governmental or revenue authority
         in respect of this Agreement or any other document referred to herein
         and all costs, expenses, taxes, assessments and other charges incurred
         in connection with any filing, registration, recording or perfection of
         any security interest contemplated hereby (it being understood,
         however, that none of the Collateral Agent, Securities Intermediary or
         Custodial Agent shall have any duty or obligation in respect of any
         such filing, registration, recording or perfection unless and until
         specifically requested in writing by the Company to take any action in
         respect thereto);

                  (4) all fees and expenses of any agent, expert or advisor
         appointed by the Collateral Agent and, in the case of any agent,
         consented to by the Company under SECTION 9.9 of this Agreement; and

                  (5) any other out-of-pocket costs and expenses reasonably
         incurred by the Collateral Agent, the Securities Intermediary and the
         Custodial Agent in connection with the performance of their duties
         hereunder.


                                       35
<PAGE>

Section 11.8 SECURITY INTEREST ABSOLUTE.

         All rights of the Collateral Agent and security interests hereunder,
and all obligations of the Holders from time to time hereunder, shall be
absolute and unconditional irrespective of:

                  (1) any lack of validity or enforceability of any provision of
         the Warrants or the Securities or any other agreement or instrument
         relating thereto;

                  (2) any change in the time, manner or place of payment of, or
         any other term of, or any increase in the amount of, all or any of the
         obligations of Holders of the Securities under the related Warrants, or
         any other amendment or waiver of any term of, or any consent to any
         departure from any requirement of, the Warrant Agreement or any Warrant
         or any other agreement or instrument relating thereto; or

                  (3) any other circumstance which might otherwise constitute a
         defense available to, or discharge of, a borrower, a guarantor or a
         pledgor.

Section 11.9 NOTICE OF TAX EVENT, TAX EVENT REDEMPTION AND TERMINATION EVENT.

         Upon the occurrence of a Tax Event, a Tax Event Redemption or a
Termination Event, the Company shall deliver written notice to the Collateral
Agent and the Securities Intermediary and unless and until any such notice is so
delivered, the Collateral Agent and the Securities Intermediary may conclusively
presume that no such events exist. Upon the written request of the Collateral
Agent or the Securities Intermediary, the Company shall inform such party
whether or not a Tax Event, a Tax Event Redemption or a Termination Event has
occurred.

Section 11.10 BOOK-ENTRY INTERESTS.

         Unless and until definitive, fully registered Certificates have been
issued to Beneficial Owners pursuant to Section 3.09 of the Warrant Agreement,
the Collateral Agent, Securities Intermediary and Custodial Agent shall be
entitled to deal with the Depositary for all purposes of this Agreement
(including the receipt or transfer of any funds hereunder) as the Holder of the
Securities, shall have no obligation to the Beneficial Owners and the rights of
the Beneficial Owners shall be exercised only through the Depositary and shall
be limited to those established by law and agreement between such Beneficial
Owners and the Depositary or the Depositary Participants. The provisions of
Sections 3.06 and 3.07 of the Warrant Agreement are hereby made applicable to
the Collateral Agent, Securities Intermediary and Custodial Agent, MUTATIS
MUTANDIS, as if they were the Warrant Agent as referred to therein.


                                       36
<PAGE>

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


CITIZENS COMMUNICATIONS COMPANY              THE CHASE MANHATTAN BANK as Warrant
                                             Agent and as attorney-in-fact of
                                             the Holders from time to time of
                                             the Securities


By: /s/ Donald B. Armour                     By: /s/ James D. Heaney
   ----------------------------------           --------------------------------
   Name:  Donald B. Armour                      Name:  James D. Heaney
   Title: Vice President, Finance and           Title: Vice President
          Treasurer

Address for Notices:                         Address for Notices:

Citizens Communications Company              The Chase Manhattan Bank
3 High Ridge Park                            450 West 33rd Street
P.O. Box 3801
Stamford, CT  06905                          New York, NY 10001
Attention: Secretary and Treasurer           Attention: Institutional Trust
Telecopy: (203) 614-5600                                Services Administration
                                             Telecopy: (212) 946-8177

THE BANK OF NEW YORK,                        THE BANK OF NEW YORK,
As Collateral Agent                          as Securities Intermediary


By: /s/ Geovanni Barris                      By: /s/ Geovanni Barris
   ----------------------------------           --------------------------------
   Name:  Geovanni Barris                       Name:  Geovanni Barris
   Title: Vice President                        Title: Vice President

Address for Notices:                         Address for Notices:
The Bank of New York                         The Bank of New York
101 Barclay Street, Floor 21 West            101 Barclay Street, Floor 21 West
New York, New York 10286                     New York, New York 10286

Attention: Corporate Trust Administration-   Attention: Corporate Trust
           Corporate Finance Unit                       Administration-Corporate
                                                        Finance Unit
Telecopy:  (212) 815-5915                    Telecopy:  (212) 815-5915


                                       37
<PAGE>

THE BANK OF NEW YORK,
As Custodial Agent


By: /s/ GEOVANNI BARRIS
    -----------------------------
    Name:  Geovanni Barris
    Title: Vice President

Address for Notices:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286

Attention: Corporate Trust Administration-
           Corporate Finance Unit
Telecopy:  (212) 815-5915


                                       38
<PAGE>

                                                                       EXHIBIT A

                                   INSTRUCTION
                               FROM WARRANT AGENT
                               TO COLLATERAL AGENT
                    (Establishment of Treasury Equity Units)

The Bank of New York, as Collateral Agent
101 Barclay Street
Floor 21 West
New York, New York  10286
Attention: Corporate Trust Administration -Corporate Finance Unit
Telecopy:  (212) 815-5915

         Re: Equity Units of Citizens Communications Company (the "COMPANY")

         Please refer to the Pledge Agreement, dated as of June 19, 2001 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, The Bank of
New York, as Securities Intermediary and as Custodial Agent and the undersigned
bank, as Warrant Agent and as attorney-in-fact for the holders of Equity Units
from time to time. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.

         We hereby notify you in accordance with Section 5.2(a) of the Pledge
Agreement that the holder of securities named below (the "HOLDER") has elected
to substitute $__________ Value of Treasury Securities or security entitlements
thereto in exchange for an equal Value of Pledged Notes relating to _________
Equity Units and has delivered to the undersigned a notice stating that the
Holder has Transferred such Treasury Securities or security entitlements with
respect thereto to the Securities Intermediary for credit to the Collateral
Account.

         We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements with respect
thereto have been Transferred to the Collateral Account, to release to the
undersigned an equal Value of Pledged Notes in accordance with SECTION 5.2 of
the Pledge Agreement. We also hereby confirm that we have not received notice
from the Company that a Tax Event Redemption has occurred.


                                      A-1
<PAGE>

                                        THE CHASE MANHATTAN BANK,
Date:                                   as Warrant Agent and as attorney-in-fact
     ------------------                 of the Holders from time to time of the
                                        Securities


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


                                      A-2
<PAGE>

Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements thereto for the Pledged Notes:


- -------------------------------            -------------------------------------
            Name                           Social Security or other
                                           Taxpayer Identification Number,
                                           if any
- -------------------------------
           Address

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

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



- -------------------------------
TRADES Account No. of or through
which Holder transferred Treasury
Securities


                                      A-3
<PAGE>

                                                                       EXHIBIT B

                             [DELIBERATELY OMITTED]


                                      B-1
<PAGE>

                                                                       EXHIBIT C

                                   INSTRUCTION
                               FROM WARRANT AGENT
                               TO COLLATERAL AGENT
                       (Reestablishment of Equity Units )


The Bank of New York, as Collateral Agent
101 Barclay Street
Floor 21 West
New York, New York  10286
Attention: Corporate Trust Administration-Corporate Finance Unit
Telecopy:  (212) 815-5915

         Re: Equity Units of Citizens Communications Company (the "COMPANY")

         Please refer to the Pledge Agreement dated as of June 19, 2001 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, The Bank of
New York, as Securities Intermediary and as Custodial Agent, and the undersigned
bank, as Warrant Agent and as attorney-in-fact for the holders of Equity Units
from time to time. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.

         We hereby notify you in accordance with Section 5.3(a) of the Pledge
Agreement that the holder of securities listed below (the "HOLDER") has elected
to substitute $_____________ Value of Notes or security entitlements with
respect thereto in exchange for $__________ Value of Pledged Treasury Securities
and has delivered to the undersigned a notice stating that the holder has
Transferred such Notes or security entitlements with respect thereto to the
Collateral Agent.

         We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Notes or security entitlements with respect thereto have
been credited to the Collateral Agent, to release to the undersigned $__________
Value of Treasury Securities or security entitlements with respect thereto
related to _____ Equity Units of such Holder in accordance with Section 5.3(a)
of the Pledge Agreement. We also hereby confirm that we have not received
written notice from the Company that a Tax Event Redemption or a successful
Initial Remarketing has occurred.


                                              THE CHASE MANHATTAN BANK,
Date:                                         as Warrant Agent
     ------------------
                                              By:
                                                 -------------------------
                                                 Name:
                                                 Title:


                                      C-1
<PAGE>

         Please print name and address of Holder electing to substitute Pledged
Notes or security entitlements thereto for Pledged Treasury Securities:


- -------------------------------            -------------------------------------
            Name                           Social Security or other
                                           Taxpayer Identification Number,
                                           if any
- -------------------------------
           Address

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

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



- -------------------------------
DTC Account No. through which
Holder transferred Notes or
security entitlements thereto


                                      C-2
<PAGE>

                                                                       EXHIBIT D

                                   INSTRUCTION
                              FROM COLLATERAL AGENT
                           TO SECURITIES INTERMEDIARY
                        (Reestablishment of Equity Units)


The Bank of New York, as Securities Intermediary
101 Barclay Street
Floor 21 West
New York, New York  10286
Attention: Corporate Trust Administration-Corporate Finance Unit
Telecopy:  (212) 815-5915

         Re: _______ Equity Units of Citizens Communications Company
             (the "COMPANY")

         Please refer to the Pledge Agreement dated as of June 19, 2001 (the
"PLEDGE AGREEMENT"), among the Company, you, as Securities Intermediary, The
Bank of New York, as Custodial Agent, and The Chase Manhattan Bank, as Warrant
Agent and as attorney-in-fact for the holders of Equity Units from time to time,
and the undersigned bank, as Collateral Agent. Capitalized terms used herein but
no defined shall have the meaning set forth in the Pledge Agreement.

         When you have confirmed that $ __________ Value of Notes or security
entitlements with respect thereto has been Transferred to the Collateral Agent
by or for the benefit of ________________, as Holder of Equity Units (the
"HOLDER"), you are hereby instructed to release from the Collateral Account $
________________ Value of Treasury Securities or security entitlements with
respect thereto by Transfer to the Warrant Agent.


                                            The Baunk of New York,
Dated:                                      as Collateral Agent
      ---------------

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


                                      D-1
<PAGE>


- -------------------------------            -------------------------------------
            Name                           Social Security or other
                                           Taxpayer Identification Number,
                                           if any
- -------------------------------
           Address

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

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



- -------------------------------
DTC Account No. through which
Holder transferred Notes or
security entitlements thereto


                                      D-2
<PAGE>

                                                                       EXHIBIT E

             NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY
                                TO WARRANT AGENT
                            (Cash Settlement Amounts)


The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trustee Administration

Re:      Equity Units of Citizens Communications Company
         (the "COMPANY")

         Please refer to the Pledge Agreement dated as of June 19, 2001 (the
"PLEDGE AGREEMENT"), by and among you, the Company, The Bank of New York, as
Collateral Agent and as Custodial Agent and the undersigned bank, as Securities
Intermediary. Unless otherwise defined herein, terms defined in the Pledge
Agreement are used herein as defined therein.

         In accordance with Section 5.5(e) of the Pledge Agreement, we hereby
notify you that as of 11:00 a.m. (New York City time) [(i) on the fourth
Business Day immediately preceding August 17, 2004], [on the Business Day
immediately preceding August 17, 2004], we have received [(i) $ _______________
in immediately available funds paid in an aggregate amount equal to the Purchase
Price to the Company on the Warrant Settlement Date with respect to
________________ Equity Units] [(ii) $ ___________ in immediately available
funds paid in an aggregate amount equal to the Purchase Price to the Company on
the Warrant Settlement Date with respect to ______ Treasury Equity Units].


                                              The Bank of New York,
Date:                                         as Securities Intermediary and
     ------------------                       Collateral Agent


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


                                      E-1
<PAGE>

                                                                       EXHIBIT F

                    TO CUSTODIAL AGENT REGARDING REMARKETING


The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York  10286
Attention: Corporate Trust Administration-Corporate Finance Unit
Telecopy:  (212) 815-5915

         Re: Notes of Citizens Communications Company

         The undersigned hereby notifies you in accordance with Section 5.7(c)
of the Pledge Agreement, dated as of June 19, 2001 (the "PLEDGE AGREEMENT"),
among Citizens Communications Company, yourselves, as Collateral Agent,
Securities Intermediary and Custodial Agent, and The Chase Manhattan Bank, as
Warrant Agent and as attorney-in-fact for the Holders of Equity Units and of
Treasury Equity Units from time to time, that the undersigned elects to deliver
$____ principal amount of Notes for delivery to the Remarketing Agent on the
Business Day immediately preceding the [Initial Remarketing Date] [Final
Remarketing Date] for remarketing pursuant to Section 5.6(c) of the Pledge
Agreement. The undersigned will, upon request of the Remarketing Agent, execute
and deliver any additional documents deemed by the Remarketing Agent or by the
Company to be necessary or desirable to complete the sale, assignment and
transfer of the Notes tendered hereby.

         The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions". The undersigned hereby instructs you, in the event of a
Failed [Initial] [Final] Remarketing, upon receipt of the Notes tendered
herewith from the Remarketing Agent, to deliver the Notes to the person(s) and
at the address(es) indicated herein under "B. Delivery Instructions."

         With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Notes tendered hereby and that the undersigned is the record owner
of any Notes tendered herewith in physical form or a participant in The
Depository Trust Company ("DTC") and the beneficial owner of any Notes tendered
herewith by book-entry transfer to your account at DTC and (ii) agrees to be
bound by the terms and conditions of Section 5.7(c) of the Pledge Agreement.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.


                                      F-1
<PAGE>

                                                                       EXHIBIT F

Date:

                                                 By:
                                                      ----------------------
                                                      Name:
                                                      Title:
                                                      Signature Guarantee:

Please print name and address:


- -------------------------------            -------------------------------------
            Name                           Social Security or other
                                           Taxpayer Identification Number,
                                           if any
           Address

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

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

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


                                      F-2
<PAGE>

                                                                       EXHIBIT F

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
A.       PAYMENT INSTRUCTIONS                               B.       DELIVERY INSTRUCTIONS
- -----------------------------------------------------------------------------------------------------------
<S>                                                         <C>
Proceeds of the remarketing should be paid by check         In the event of a failed remarketing, Notes
in the name of the person(s) set forth below and            which are in physical form should be delivered
mailed to the address set forth below                       to the person(s) set forth below and mailed to
                                                            the address set forth below.

                   Name(s)                                                     Name(s)

         ----------------------------                                ----------------------------
                (Please Print)                                              (Please Print)

                   Address                                                     Address

         ----------------------------                                ----------------------------
                (Please Print)                                              (Please Print)

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

         ----------------------------                                ----------------------------
                  (Zip Code)                                                  (Zip Code)

         ----------------------------                                ----------------------------
(Tax Identification or Social Security Number)              (Tax Identification or Social Security Number)

                                                            In the event of a failed remarketing, Notes
                                                            which are in book-entry form should be credited
                                                            to the account at The Depository Trust Company
                                                            set forth below.

                                                                     ----------------------------
                                                                          DTC Account Number

                                                                     Name of Account Party: _____

- -----------------------------------------------------------------------------------------------------------
</TABLE>


                                      F-3
<PAGE>

                                                                       EXHIBIT G

                    INSTRUCTION TO CUSTODIAL AGENT REGARDING
                           WITHDRAWAL FROM REMARKETING


The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York  10286
Attention: Corporate Trust Administration-Corporate Finance Unit
Telecopy:  (212) 815-5915

         Re: Notes Citizens Communications Company

         The undersigned hereby notifies you in accordance with Section 5.7(c)
of the Pledge Agreement, dated as of June 19, 2001 (the "PLEDGE AGREEMENT"),
among Citizens Communications Company, yourselves, as Collateral Agent,
Securities Intermediary and Custodial Agent, and The Chase Manhattan Bank, as
Warrant Agent and as attorney-in-fact for the Holders of Equity Units and
Treasury Equity Units from time to time, that the undersigned elects to withdraw
the $___ principal amount of Notes delivered to the Custodial Agent on _________
___, ____ for remarketing pursuant to Section 5.7(c) of the Pledge Agreement.
The undersigned hereby instructs you to return such Notes to the person(s) and
at the address(es) indicated herein under "Delivery Instructions." With this
notice, the undersigned hereby agrees to be bound by the terms and conditions of
Section 5.7(c) of the Pledge Agreement. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.


Date:
       ------------------

                                                 By:
                                                      ----------------------
                                                      Name:
                                                      Title:
                                                      Signature Guarantee:

Please print name and address:


- -------------------------------            -------------------------------------
            Name                           Social Security or other
                                           Taxpayer Identification Number,
                                           if any
           Address

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

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

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


                                      G-1
<PAGE>

- ---------------------------------------------------
              DELIVERY INSTRUCTIONS
- ---------------------------------------------------

Notes which are in physical form should be
delivered to the person(s) set forth below and
mailed to the address set forth below.

                   Name(s)

         ----------------------------
                (Please Print)

                   Address

         ----------------------------
                (Please Print)

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

         ----------------------------
                  (Zip Code)

         ----------------------------
(Tax Identification or Social Security Number)

Notes which are in book-entry form should be
credited to the account at The Depository Trust
Company set forth below.

         ----------------------------
             DTC Account Number

Name of Account Party:
                      ----

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


                                      G-2
<PAGE>

                                                                       EXHIBIT H

                      NOTICE TO DELIVER TREASURY PORTFOLIO


Morgan Stanley & Co. Incorporated
1585 Broadway
 New York, New York  10036
Telecopy: (212) 761-0538
Attention: Corporate Trust Administration-Corporate Finance Unit


         Re: ________ Equity Units of Citizens Communications Company, a
             Delaware corporation (the "COMPANY")

         The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.02 of the Warrant Agreement, dated as of June 19, 2001 (the
"WARRANT AGREEMENT"); unless otherwise defined herein, terms defined in the
Warrant Agreement are used herein as defined herein), between the Company and
you, as Warrant Agent and as Attorney-in-Fact for the Holders of the Warrants,
that such Holder has elected to deliver its Applicable Ownership Interest in the
Treasury Portfolio to be purchased and substituted for the Holder's Notes on the
applicable Reset Effective Date. The undersigned Holder hereby instructs you to
notify promptly the Remarketing Agent of the undersigned Holders' election to
deliver such Treasury Portfolio with respect to the Notes related to such
Holder's Equity Units.

Date:
     -----------------------               ----------------------------------
                                           Signature

                                           Signature Guarantee:
                                                               --------------

Please print name and address of Registered Holder:


- -------------------------------            -------------------------------------
            Name                           Social Security or other
                                           Taxpayer Identification Number,
                                           if any
- -------------------------------
           Address

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

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

- -------------------------------
DTC Account No. of Holder


                                      H-1
<PAGE>

                                                                       EXHIBIT I

            INSTRUCTION TO WARRANT AGENT AND SECURITIES INTERMEDIARY


The Chase Manhattan Bank
450 West 33rd Street
New York, NY  10001
Attention:  Corporate Trustee Administration

The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York  10286
Attention: Corporate Trust Administration-Corporate Finance Unit
Telecopy:  (212) 815-5915

         Re: Equity Units of Citizens Communications Company (the
             "Company")


         The undersigned Holder hereby notifies you that it has delivered to the
Remarketing Agent, for credit to the Collateral Account, Treasury Securities
representing its Applicable Ownership Interest in the Treasury Portfolio in
exchange for $__________ Notes, held in the Collateral Account in respect of the
number of Equity Units specified below, in accordance with the Pledge Agreement,
dated as of ______ ___, 2001 (the "Pledge Agreement"; unless otherwise defined
herein, terms defined in the Pledge Agreement are used herein as defined
therein). The undersigned Holder has paid all applicable fees relating to such
exchange. The undersigned Holder hereby instructs you to instruct the Collateral
Agent to release to you on behalf of the undersigned Holder the Notes related to
such Equity Units.

Date:
     -----------------------               ----------------------------------
                                           Signature

                                           Signature Guarantee:
                                                               --------------

Please print name and address of Registered Holder:


- -------------------------------            -------------------------------------
            Name                           Social Security or other
                                           Taxpayer Identification Number,
                                           if any
           Address
                                           Number of Equity Units
                                                                 ------------
- -------------------------------

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

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


                                      I-1
<PAGE>

                                                                       EXHIBIT J

                         INSTRUCTION FROM WARRANT AGENT
                               TO COLLATERAL AGENT


The Bank of New York
101 Barclay Street - 2115
New York, NY  10286

                  Re:   Equity Units of Citizens Communications Company (the
                        "Company")


         Please refer to the Pledge Agreement dated as of June 19, 2001 (the
"Pledge Agreement"), among the Company, you, as Collateral Agent, Securities
Intermediary and Custodial Agent, and the undersigned, as Warrant Agent and as
attorney-in-fact for the holders of Equity Units from time to time. Capitalized
terms used herein but not defined shall have the meaning set forth in the Pledge
Agreement.

         We hereby instruct you in accordance with SECTION 7.3 of the Pledge
Agreement that we have received notice from the Holder named below that the
Holder has elected to substitute $________ per Note as permitted under Section
5.02 of the Warrant Agreement through delivery to the Remarketing Agent of the
Treasury Portfolio. The Applicable Ownership Interest of the Treasury Portfolio
will, upon receipt thereof from the Remarketing Agent, be substituted for the
Pledged Note. We have received a notice stating that the Holder has delivered
its Applicable Ownership Interest in the Treasury Portfolio to the Remarketing
Agent.

         We hereby request that you as the Collateral Agent release to us for
delivery to such Holder _________ principal amount of the Pledged Note in
accordance with SECTION 7.3 of the Pledge Agreement.

                                                      THE CHASE MANHATTAN BANK,
                                                      as Warrant Agent


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


                                      J-1
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>6
<FILENAME>a2052437zex-4_3.txt
<DESCRIPTION>EXHIBIT 4.3
<TEXT>

<PAGE>

                                                                     EXHIBIT 4.3

                                                                  EXECUTION COPY

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






                         CITIZENS COMMUNICATIONS COMPANY

                                       AND

                            THE CHASE MANHATTAN BANK,

                                   AS TRUSTEE

                          SECOND SUPPLEMENTAL INDENTURE

                          DATED AS OF JUNE 19, 2001 TO

                                SENIOR INDENTURE

                            DATED AS OF MAY 23, 2001






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




<PAGE>

            SECOND SUPPLEMENTAL INDENTURE, dated as of June 19, 2001 (this
"SUPPLEMENTAL INDENTURE"), between CITIZENS COMMUNICATIONS COMPANY, a Delaware
corporation (the "ISSUER" or the "COMPANY"), and THE CHASE MANHATTAN BANK, a
corporation duly organized and existing under the laws of the State of New York,
as trustee (the "TRUSTEE").

                              W I T N E S S E T H :
                              - - - - - - - - - -


            WHEREAS, the Issuer and the Trustee have duly executed and delivered
an Indenture, dated as of May 23, 2001 (the "INDENTURE"), providing for the
authentication, issuance, delivery and administration of unsecured debentures,
notes or other evidences of indebtedness to be issued in one or more series by
the Issuer (the "SECURITIES");

            WHEREAS, pursuant to the terms of the Indenture, the Issuer desires
to provide for the establishment of a new series of Securities (the "NOTES") to
be issued under the Indenture in an aggregate principal amount of up to
$460,000,000, which may be authenticated and delivered as provided in the
Indenture;

            WHEREAS, the Issuer desires to supplement and amend the provisions
of the Indenture to issue the Notes;

            WHEREAS, Section 8.1 of the Indenture expressly permits the Issuer
and the Trustee to enter into one or more supplemental indentures for the
purposes, inter alia, of establishing the forms and terms of Securities of any
series as permitted by Sections 2.1 and 2.3 of the Indenture or making certain
provisions in the Indenture which the Issuer deems necessary or desirable, and
permits the execution of such supplemental indentures without the consent of the
Holders of any Securities then outstanding;

            WHEREAS, for the purposes hereinabove recited, and pursuant to due
corporate action, the Issuer has duly determined to execute and deliver to the
Trustee this Supplemental Indenture; and

            WHEREAS, all conditions and requirements necessary to make this
Supplemental Indenture a valid and legally binding instrument in accordance with
its terms have been done and performed, and the execution and delivery hereof
has been in all respects duly authorized;

            NOW, THEREFORE, in consideration of the premises, the Issuer and the
Trustee mutually covenant and agree as follows:

            Section 1. DEFINITIONS.

            1.1   Unless the context otherwise requires:

            (a)   A term not defined herein that is defined in the Indenture has
the same meaning when used in this Supplemental Indenture;

<PAGE>

                                                                               2

            (b)   A term defined anywhere in this Supplemental Indenture has the
same meaning throughout;

            (c)   A reference to a Section or Article is to a Section or Article
of this Supplemental Indenture;

            (d)   The following terms have the meanings given to them in the
Warrant Agreement (also referred to as the Purchase Contract Agreement): (i)
Additional Remarketing; (ii) Authorized Newspaper; (iii) Benchmark Treasury;
(iv) Cash Settlement; (v) Collateral Agent, (vi) Depositary; (vii) Depositary
Participant; (viii) Equity Units; (ix) Failed Final Remarketing; (x) Failed
Initial Remarketing; (xi) Final Remarketing; (xii) Final Remarketing Date;
(xiii) Initial Remarketing; (xiv) Initial Remarketing Date; (xv) Purchase
Contract; (xvi) Quotation Agent; (xvii) Redemption Amount; (xviii) Redemption
Price; (xix) Reset Effective Date; (xx) Remarketing Agent; (xxi) Remarketing
Agreement; (xxii) Reset Announcement Date; (xxiii) Reset Agent; (xxiv) Reset
Effective Date; (xxv) Reset Rate; (xxvi) Successful Initial Remarketing; (xxvii)
Treasury Equity Unit; (xxviii) Successful Initial Remarketing;(xxix) Two-Year
Benchmark Treasury;(xxx) Warrant Agent; and (xxxi) Warrant Settlement Date;

            (e)   The following terms have the meanings given to them in the
Pledge Agreement (i) Pledge; and (ii) Pledged Notes.

            1.2   Unless the context otherwise requires, the following terms
shall have the following meanings:

            "APPLICABLE PRINCIPAL AMOUNT" means either (1) if the Tax Event
      Redemption Date occurs prior to the Warrant Settlement Date, the aggregate
      principal amount of Notes that are part of the Equity Units on the Tax
      Event Redemption Date or (2) if the Tax Event Redemption Date occurs on or
      after the Warrant Settlement Date, the aggregate principal amount of the
      Notes outstanding on the Tax Event Redemption Date.

            "APPLICABLE PROCEDURES" means, with respect to any transfer or
      exchange of or for beneficial interests in any Global Note, the rules and
      procedures of the Depositary that apply to such transfer or exchange.

            "CAPITAL STOCK" means, with respect to any entity, any and all
      shares, interests, participations or other equivalents (however
      designated) of or in such entity's capital stock or other equity
      interests, and options, rights or warrants to purchase such capital stock
      or other equity interests, whether now outstanding or issued after the
      Issue Date.

            "CUSTODIAN" means The Chase Manhattan Bank, as custodian of the
      Notes on behalf of the Depositary.

            "DEFAULT" means any event that is, or after notice or passage of
      time or both would be, an Event of Default.

            "DEPOSITARY" means The Depository Trust Company or any other
      depositary from time to time specified pursuant to the Indenture.

<PAGE>
                                                                               3


            "DEFINITIVE NOTE" means a Note in certificated form, other than a
      Global Note, issued in accordance with Section 3 hereof, substantially in
      the form of Exhibit A hereto.

            "GLOBAL NOTES" means, individually and collectively, each of the
      Notes that is a Global Security, issued in accordance with Section 3
      hereof, substantially in the form of Exhibit B hereto.

            "GLOBAL NOTE LEGEND" means the legend set forth in Section 4.3 that
      is required to be placed on all Global Notes issued under this
      Supplemental Indenture.

            "INDIRECT PARTICIPANT" means a person who holds a beneficial
      interest in a Global Note through a Participant.

            "ISSUE DATE" means the date on which the Notes are originally issued
      under this Supplemental Indenture.

            "PARTICIPANT" means a person who has an account with the Depositary.

            "PLEDGE AGREEMENT" means the Pledge Agreement, dated as of the date
      hereof, among The Company, The Bank of New York, as Collateral Agent, as
      Securities Intermediary and as Custodial Agent, and The Chase Manhattan
      Bank, as Warrant Agent.

            "QUOTATION AGENT' means any primary U.S. government securities
      dealer selected by the Issuer. At the date of this Supplemental Indenture,
      it is anticipated that Morgan Stanley & Co. Incorporated will be the
      quotation agent.

            "REDEMPTION AMOUNT" means, prior to the Warrant Settlement Date, for
      each Note, the product of the principal amount of such Note and a
      fraction, the numerator of which is the Treasury Portfolio Purchase Price
      and the denominator of which is the Applicable Principal Amount and means,
      after the Warrant Settlement Date, the principal amount of such Note.

            "REGISTRAR" means the registrar specified from time to time pursuant
      to Section 3.2 of the Indenture.

            "REMARKETING" means the remarketing of the Notes pursuant to the
      Remarketing Procedures.

            "REMARKETING PROCEDURES" has the meaning set forth in the
      Remarketing Agreement.

            "RESTRICTED PAYMENT" means any of the following:

                  (A) the declaration or payment of any dividend or any other
            distribution on Capital Stock of the Issuer; and

                  (B) the purchase, redemption, or other acquisition or
            retirement for value or the making of a liquidation payment of any
            Capital Stock of the Issuer.

<PAGE>
                                                                               4


            "SECURITIES ACT' means the Securities Act of 1933, as amended.

            "SUBSIDIARY" means any corporation, association, partnership, joint
      venture, limited liability company or other business entity of which more
      than 50% of the total voting power of the equity interests (including
      joint venture interests) entitled (without regard to the occurrence of any
      contingency) to vote in the election of directors, managers or trustees
      thereof or any partnership of which more than 50% of the partners' equity
      interests (considering all partners' equity interests as a single class)
      is, in each case, at the time owned or controlled directly or indirectly,
      by the Issuer or one or more of the Subsidiaries of the Issuer or any
      combination thereof.

            "TAX EVENT" means the receipt by the Issuer of an opinion of
      counsel, rendered by a law firm having a recognized national tax practice,
      to the effect that, as a result of any amendment to, change in or
      announced proposed change in the laws (or any regulations thereunder) of
      the United States or any political subdivision or taxing authority thereof
      or therein, or as a result of any official administrative decision,
      pronouncement, judicial decision or action interpreting or applying such
      laws or regulations, which amendment or change is effective or which
      proposed change, pronouncement, action or decision is announced on or
      after the date of issuance of the Notes, there is more than an
      insubstantial increase in the risk that interest payable by the Issuer on
      the Notes is not, or within 90 days of the date of such opinion, will not
      be, deductible by the Issuer, in whole or in part, for United States
      federal income tax purposes.

            "TREASURY PORTFOLIO" means, with respect to the applicable principal
      amount of Notes, a portfolio of zero-coupon U.S. treasury securities
      consisting of (a) principal or interest strips of U.S. treasury securities
      that mature on or prior to August 16, 2004 in an aggregate amount at
      maturity equal to the applicable principal amount and (b) with respect to
      each scheduled interest payment date on the Notes that occurs after the
      Tax Event Redemption Date, principal or interest strips of U.S. treasury
      securities that mature on or prior to such date in aggregate amount at
      maturity equal to the aggregate interest payment that would be due on the
      applicable principal amount of the Notes on such date.

            "TREASURY PORTFOLIO PURCHASE PRICE" means the lowest aggregate price
      quoted by a primary U.S. government securities dealer in New York City, a
      "primary treasury dealer", to the quotation agent, as defined below, on
      the third business day preceding the Tax Event Redemption Date for the
      purchase of the Treasury Portfolio for settlement on the Tax Event
      Redemption Date.

            "WARRANT AGREEMENT" (also referred to as the "PURCHASE CONTRACT
      AGREEMENT") means the Warrant Agreement, dated as of the date hereof,
      between the Issuer and The Chase Manhattan Bank, as Warrant Agent and as
      attorney-in-fact for the Holders of Securities (as defined therein) from
      time to time.

            Section 2. TERMS AND CONDITIONS OF THE SECURITIES.

            There is hereby authorized the following new series of Notes:

            2.1   6 3/4% NOTES DUE AUGUST 17, 2006.

<PAGE>
                                                                               5


            (a) The Notes are hereby authorized and designated as the "Senior
Notes due 2006".

            (b) The Notes shall be in an aggregate principal amount of up to
$460,000,000 and shall bear interest initially at a rate of 6 3/4% per annum,
shall mature on August 17, 2006 and are subject to optional redemption, in whole
or in part, at any time prior to the stated maturity date thereof pursuant to
the terms set forth in the form of Note attached hereto. The interest rate
payable upon the Note may be reset as described in Section 8.

            (c) The date from which interest will accrue on the Notes, the
interest payment dates of the Notes, the record date with respect to each
payment of interest on the Notes and all other terms of the Notes are set forth
in the form of Note attached hereto.

            (d) The Notes shall be issued in denominations of $25 and any
integral amount thereof.

            2.2 ISSUANCE OF ADDITIONAL SECURITIES. The Issuer shall be permitted
to amend this Supplemental Indenture in order to increase the aggregate
principal amount of Notes of any series that may be issued hereunder without the
consent of the Holders of Notes of any series so affected.

            Section 3. FORM OF NOTES.

            FORM OF NOTES. So long as any Notes constitute components of Equity
Units, they shall be issued in the form of Definitive Notes. Notes that no
longer constitute components of Equity Units shall be issued in the form of
Global Notes. Each Global Note or Definitive Note, as applicable, shall
represent such of the outstanding Notes as shall be specified therein and each
shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee, as custodian of the Notes, in accordance
with instructions as required by Section 4 hereof. Any endorsement of a
Definitive Note to reflect the amount of any decrease in the aggregate principal
amount of outstanding Notes represented thereby shall be made by the Collateral
Agent pursuant to and in accordance with Section 4.4 hereof. Any endorsement
of a Definitive Note to reflect the amount of any increase in the aggregate
principal amount of Outstanding Notes represented thereby shall be made by
the Collateral Agent pursuant to and in accordance with Section 4.4 thereof.

            Section 4. TRANSFER AND EXCHANGE.

            Notwithstanding any provisions to the contrary set forth in Article
Two of the Indenture, the following terms and conditions shall govern the
transfer and exchange of the Notes.

            4.1 TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary. All Global Notes will be exchanged by the
Issuer for Definitive Notes if (i) the Issuer delivers to the Trustee notice
from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act

<PAGE>
                                                                               6


and, in either case, a successor Depositary is not appointed by the Issuer
within 90 days after the date of such notice from the Depositary, (ii) the
Issuer in its sole discretion determines that the Global Notes (in whole but not
in part) should be exchanged for Definitive Notes and delivers a written notice
to such effect to the Trustee or (iii) a Default or Event of Default hall have
occurred and be continuing with respect to the Notes. Upon the occurrence of any
of the preceding events in (i), (ii) or (iii) above, Definitive Notes shall be
issued in such names as the Depositary shall instruct the Trustee. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 4 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be
exchanged for another Note other than as provided in this Section 4, HOWEVER,
beneficial interests in a Global Note may be transferred and exchanged as
provided in Section 4.2.

            4.2 TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL
NOTES. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
the Indenture, as supplemented by this Supplemental Indenture, and the
Applicable Procedures. Transfers of beneficial interests in the Global Notes
also shall require compliance with either subparagraph (a) or (b) below, as
applicable:

            (a) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE.
      Beneficial interests in any Global Note may be transferred to persons who
      take delivery thereof in the form of a beneficial interest in a Global
      Note. No written orders or instructions shall be required to be delivered
      to the Registrar to register the transfers described in this Section
      4.2(a).

            (b) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS IN
      GLOBAL NOTES. In connection with all transfers and exchanges of beneficial
      interests that are not subject to Section 4.2(a) above, the transferor of
      such beneficial interest must deliver to the Depositary either (1) (A) a
      written order from a Participant or an Indirect Participant given to the
      Depositary in accordance with the Applicable Procedures directing the
      Depositary to credit or cause to be credited a beneficial interest in the
      Global Note, or in another Global Note in the case of an exchange, in an
      amount equal to the beneficial interest to be transferred or exchanged and
      (B) instructions given in accordance with the Applicable Procedures
      containing information regarding the Participant account to be credited
      with such increase or (2) (A) a written order from a Participant or an
      Indirect Participant given to the Depositary in accordance with the
      Applicable Procedures directing the Depositary to cause to be issued a
      Definitive Note in an amount equal to the beneficial interest to be
      transferred or exchanged and (B) instructions given by the Depositary to
      the Registrar containing information regarding the person in whose name
      such Definitive Note shall be registered to effect the transfer or
      exchange referred to in (A) above. Upon satisfaction of all of the
      requirements for transfer or exchange of beneficial interests in Global
      Notes contained in the Indenture, as supplemented by this Supplemental
      Indenture, and the Notes or otherwise applicable under the Securities Act,
      the Custodian shall adjust the principal amount of the relevant Global
      Note(s) pursuant to Section 4.4 hereof.

            4.3 LEGEND. Each Global Note issued under this Supplemental
Indenture shall bear a legend on the face of the Global Note in substantially
the following form:

<PAGE>
                                                                               7


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

            THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
            INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
            BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
            ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE CUSTODIAN MAY
            MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
            2.9 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
            WHOLE BUT NOT IN PART PURSUANT TO SECTION 4.1 OF THE SUPPLEMENTAL
            INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
            FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE AND (IV)
            THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
            THE PRIOR WRITTEN CONSENT OF THE COMPANY."

            4.4 CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES.

            (a) At such time as all beneficial interests in a particular Global
Note have been exchanged for Definitive Notes or a particular Global Note has
been redeemed, repurchased or canceled in whole and not in part, each such
Global Note shall be returned to or retained and canceled by the Custodian in
accordance with Section 2.10 of the Indenture. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for or
transferred to a person who will take delivery thereof in the form of a
beneficial interest in another Global Note or for Definitive Notes, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the
Custodian or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

            (b) In the event that any Pledged Note is to be released from the
Pledge of the Pledge Agreement and delivered to the Warrant Agent pursuant to
Section 5.2 of the Pledge Agreement (a "Released Note"), as a result of the
creation of one or more Treasury Equity Units as provided in said Section 5.2
of the Pledge Agreement, such release and delivery shall be evidenced

<PAGE>
                                                                               8


by an endorsement by the Collateral Agent on the Definitive Note held by the
Collateral Agent reflecting a reduction in the principal amount of such
Definitive Note equal in amount (the "Reduced Principal Amount") to the
principal amount of the Released Note. The Collateral Agent shall confirm any
such Reduced Principal Amount by telecopying or otherwise delivering a photocopy
of such endorsement made on the Definitive Note evidencing such Reduced
Principal Amount to the Trustee at the telecopier number or address of the
Warrant Agent provided for notices to the Warrant Agent in the Pledge Agreement
(or at such other telecopier or address as the Trustee shall provide to the
Collateral Agent). Upon receipt of such confirmation, the Trustee shall instruct
the Custodian to increase the principal amount of a Global Note held by the
Custodian in an amount equal to the Reduced Principal Amount by an endorsement
made by the Custodian on such Global Note to reflect such increase.

            (c) In the event that a Note is transferred to the Collateral Agent
pursuant to Section 5.3(a) of the Pledge Agreement (a "Subjected Note") in
connection with the reestablishment of an Equity Unit as provided in Section 5.3
of the Pledge Agreement, such transfer shall be evidenced by an endorsement by
the Collateral Agent on the Definitive Note held by the Collateral Agent
reflecting an increase in the principal amount of such Definitive Note equal in
amount (the "Increased Principal Amount") to the principal amount of such
Subjected Note. The Collateral Agent shall confirm any such Increased Principal
Amount by telecopying or otherwise delivering a photocopy of such endorsement
made on the Definitive Note evidencing such Increased Principal Amount to the
Trustee at the telecopier number or address of the Warrant Agent provided for
notices to the Warrant Agent in the Pledge Agreement (or at such other
telecopier or address as the Trustee shall provide to the Collateral Agent).
Upon receipt of such confirmation, the Trustee shall instruct the Custodian to
decrease the principal amount of a Global Note held by the Custodian in an
amount equal to the Increased Principal Amount by an endorsement made by the
Custodian on such Global Note to reflect such decrease.

            Section 5.

            5.1 In connection with the Notes (and for the avoidance of doubt,
not in connection with any other series of notes issued under the Indenture,
unless set forth by the supplemental indenture related thereto), Section 9.1 of
the Indenture is hereby amended by deleting such section in its entirety and
replacing it with the following:

            "LIMITATIONS ON MERGERS, CONSOLIDATIONS AND SALES OF ASSETS. The
      Issuer will not consolidate or merge with or into, or sell, lease, convey
      or otherwise dispose of all or substantially all of its assets (including,
      without limitation, by way of liquidation or dissolution), in any one
      transaction or in a series of related transactions, to any other
      corporation (in each case other than in a transaction in which the Issuer
      is the survivor of a consolidation or merger, or the transferee in a sale,
      lease, conveyance or other disposition) unless:

            (i) the entity formed by or surviving such consolidation or merger
      (if other than the Issuer), or to which such sale, lease, conveyance or
      other disposition will be made (collectively, the "Successor"), is a
      corporation, limited liability company or other legal entity organized and
      existing under the laws of the United States or any state thereof

<PAGE>
                                                                               9


      or the District of Columbia, and the Successor expressly assumes by
      supplemental indenture in a form reasonably satisfactory to the Trustee
      all of the obligations of the Issuer under the Notes and the Indenture,
      and

            (ii) immediately after giving effect to such transaction or series
      of related transactions, no Default or Event of Default has occurred and
      is continuing.

      The foregoing provisions shall not apply to the disposition by the Issuer
of any or all of the assets that are identified in the Issuer's March 31, 2001
financial statements as discontinued operations or assets held for sale or the
disposition of Electric Lightwave, Inc."

            5.2 In addition to the covenants set forth in Article Three of the
Indenture, the following additional covenant will apply to the Issuer in
connection with the Notes.

            LIMITATIONS ON RESTRICTED PAYMENTS. The Issuer will not directly or
      indirectly, make any Restricted Payment unless no Default or Event of
      Default shall have occurred and be continuing at the time of or
      immediately after giving effect to such Restricted Payment.

      The foregoing provisions shall not prohibit:

            (i) the declaration of a dividend in connection with the
      implementation of a stockholders' rights plan or the redemption or
      repurchase of any such rights pursuant thereto;

            (ii) a reclassification of Capital Stock or exchange or conversion
      of one class or series of the Issuer's Capital Stock for another class or
      series of the Issuer's Capital Stock;

            (iii) the purchase of fractional interests in shares of the Issuer's
      Capital Stock pursuant to the conversion or exchange provisions of such
      Capital Stock or the security being converted or exchanged; and

            (iv) the declaration of dividends or distributions in the Issuer's
      Capital Stock.

            Section 6.

            6.1 If a Tax Event occurs and is continuing, the Company may, at its
option and upon not less than 30 nor more than 60 days' notice to the Holders of
the Notes, redeem the Notes in whole (but not in part) within 90 days following
the occurrence of such Tax Event, at a price equal to, for each Note, the
Redemption Amount, plus accrued and unpaid interest thereon to the date of
redemption (the "Tax Event Redemption Date") or such earlier time as the Company
determines, provided that the Company shall have deposited with the Trustee an
amount sufficient to pay the aggregate Redemption Price by 10:00 a.m. on the Tax
Event Redemption Date.

            6.2 If a Tax Event occurs prior to the Warrant Settlement Date, the
redemption price payable in liquidation to the Equity Unit holders' interests in
the Notes will be distributed to the Securities Intermediary, which in turn will
apply an amount equal to the redemption

<PAGE>
                                                                              10


amount of such redemption price to purchase the Treasury Portfolio on behalf of
the holders of the Equity Units and to remit the remaining portion, if any, of
such redemption price to the Warrant Agent for payment to the holders of the
Equity Units. Thereafter, the applicable ownership interest of the Treasury
Portfolio (clause (A)) will be substituted for the Notes and will be pledged to
the collateral agent to secure the Equity Unit holders' obligations to purchase
the Issuers common stock under the related warrant.

            6.3 If a Tax Event occurs after the Warrant Settlement Date, the
Treasury Portfolio will not be purchased and the proceeds will be distributed to
the Warrant Agent for payment to the holders of Equity Units. Regardless of
whether before the Warrant Settlement Date, if a tax event redemption occurs,
holders of Notes that no longer constitute components of the Equity Units will
directly receive proceeds from the redemption of the Notes.

            6.4 Except as provided in this Section 6.1, the Company will have no
right to redeem the Notes.

            6.5 The Notes will not be subject to a sinking fund provision.

            Section 7. agreed tax treatment

            7.1 Each Note issued hereunder shall provide that each of the
Company and, by its acceptance of a Note or a beneficial interest therein, the
Holder of, and any Person that acquires a beneficial interest in, such Note (i)
intends that such Note constitutes indebtedness and agrees to a treat such Note
as indebtedness for United States federal, local, income and franchise and state
tax purposes, (ii) agrees to treat such Note as indebtedness subject to Treas.
Reg. Section 1.1275-4 (the "Contingent Debt Regulations") and to be bound by the
Company's determination of the "comparable yield" and "projected payment
schedule", within the meaning of the Contingent Debt Regulations, with respect
to such Note. For purposes of the foregoing, the Company's determination of the
"comparable yield" is 7.63% per annum, compounded quarterly and the Company's
determination of the "projected payment schedule" is $0.28 for the period ending
on August 17, 2001, $0.42 for each quarter ending on or prior to the date that
is three Business Days following a Successful Initial Remarketing, $0.56 for
each quarter ending after such date and prior to the maturity date and $25.56 on
the maturity date. A holder may also obtain the comparable yield and projected
payment schedule by submitting a written request for it to the Company at the
following address: 3 High Ridge Park, Stamford, CT 06905.

            Section 8. REMARKETING8.1 INITIAL REMARKETING PROCEDURES

            (a) The Company shall request, (i) in the case of the first Initial
Remarketing on the third Business Day immediately preceding May 17, 2004 and the
Final Remarketing, not later than 7 nor more than 15 days prior to the Reset
Announcement Date, and (ii) in the case of any Additional Remarketing, as soon
as practical after the Depositary has been notified of such Additional
Remarketing by the Remarketing Agent, that the Depositary notify the Holders of
the Notes of the Reset Announcement Date. The Remarketing Agent shall request
(i) in the case of the first Initial Remarketing on the third Business Day
immediately preceding May 17, 2004 and the Final Remarketing, request, not later
than 15 nor more than 30 calendar days prior to any such remarketing date, and
(ii) in the case of any Additional Remarketing as soon as practical after the
Depositary has been notified of such Additional Remarketing by the Depositor,
that the Depositary notify the Holders of the Notes of such Remarketing.

<PAGE>
                                                                              11


            (b) Under Section 5.02 of the Warrant Agreement, Notes that
constitute components of Equity Units will be remarketed as provided therein and
in this Section 8. Instead of participating in the first Initial Remarketing,
Holders of Notes can deliver the Treasury Portfolio to the Remarketing Agent or
its designated entity prior to or on the fifth Business Day preceding August 17,
2004. Instead of participating in an Additional Remarketing, Holders of Notes
can notify the Warrant Agent on or prior to the fifth Business Day immediately
preceding August 17, 2004, of their intention to deliver the Treasury Portfolio
to the Remarketing Agent or its designated entity prior to the fourth Business
Day preceding August 17, 2004. Not later than 5:00 P.M., New York City time, on
the second Business Day immediately preceding any such Initial Remarketing Date,
but no earlier than the interest payment date immediately preceding such
Remarketing Date, each Holder of Notes not constituting components of Equity
Units may elect to have the Notes held by such Holder remarketed. Holders of
Notes that are not components of Equity Units shall give notice of their
election to have such Notes remarketed to the Custodial Agent pursuant to the
Pledge Agreement. Any such notice shall be irrevocable after 5:00 p.m., New York
City time, on the Business Day immediately preceding any Initial Remarketing
Date and may not be conditioned upon the level at which the Reset Rate is
established. Pursuant to Section 5.02 of the Warrant Agreement, upon written
request by the Company made two Business Days prior thereto, the Warrant Agent
shall notify, by 11:00 a.m., New York City time, on the Business Day immediately
preceding any Initial Remarketing Date, the Remarketing Agent and the Company,
as the case may be, of the aggregate principal amount of Notes (that are
components of Equity Units) to be remarketed. Pursuant to Section 5.6(c) of the
Pledge Agreement, the Custodial Agent shall notify the Remarketing Agent and the
Depositor of the aggregate principal amount of Notes (that are not components of
Equity Units) to be remarketed. The Notes constituting components of the Equity
Units shall be deemed tendered, notwithstanding any failure by the holder of
such Equity Units to deliver or properly deliver such Notes to the Remarketing
Agent for purchase.

            (c) The right of each Holder to have Notes tendered for purchase
shall be limited to the extent that: (i) the Remarketing Agent conducts an
Initial Remarketing pursuant to the terms of the Remarketing Agreement and
Warrant Agreement, (ii) Notes tendered have not been called for redemption,
(iii) the Remarketing Agent is able to find a purchaser or purchasers for
tendered Notes at a price per Note such that the aggregate price for the
Applicable Principal Amount of Notes is not less than 100% of the Treasury
Portfolio Purchase Price and (iv) such purchaser or purchasers deliver the
purchase price therefore to the Remarketing Agent as and when required. The
Holders of Notes that are remarketed in a Successful Initial Remarketing shall
be deemed to have agreed that the remarketing fee specified in Section 5.03(b)
of the Warrant Agreement shall be deducted from the proceeds of the remarketing.

            (d) On the Initial Remarketing Date, pursuant to the terms of the
Remarketing Agreement, the Remarketing Agent shall use reasonable efforts to
remarket, at a price per Note such that the aggregate price for the Applicable
Principal Amount of Notes is equal to approximately 100.25% of the Treasury
Portfolio Purchase Price.

            (e) If there are no Equity Units outstanding and none of the Holders
elect to have Notes held by them remarketed, the Reset Rate shall be the rate
determined by the Reset Agent subject to the terms of the Remarketing Agreement,
as the rate that would have been established had a remarketing been held on the
Initial Remarketing Date.

<PAGE>
                                                                              12


            (f) If the Remarketing Agent has determined that it will be able to
remarket all Notes tendered or deemed tendered prior to 4:00 p.m., New York City
time, on the Initial Remarketing Date, the Reset Agent, subject to the terms of
the Remarketing Agreement, shall determine the Reset Rate.

            (g) If, by 4:00 p.m., New York City time, on the Initial Remarketing
Date, a Failed Initial Remarketing has occurred, pursuant to the terms of the
Remarketing Agreement, the Remarketing Agent shall so advise by telephone the
Company, the Collateral Agent and the Warrant Agent.

            (h) By approximately 4:30 p.m., New York City time, on the Initial
Remarketing Date, provided that there has not been a Failed Initial Remarketing,
the Remarketing Agent and the Reset Agent shall, pursuant to the terms of the
Remarketing Agreement advise, by telephone (i) the Company, the Collateral Agent
and the Warrant Agent of the Reset Rate determined in the Initial Remarketing
and the aggregate principal amount of Notes sold in the Initial Remarketing,
(ii) each purchaser (or the Participant thereof) of the Reset Rate and the
aggregate principal amount of Notes such purchaser is to purchase and (iii) each
purchaser of the Notes to give instructions to its Participant to pay the
purchase price on the Reset Effective Date in same day funds against delivery of
the Notes purchased through the facilities of the Depositary.

            (i) In accordance with the Depositary's normal procedures, on the
Reset Effective Date, the transactions described above with respect to each Note
tendered for purchase and sold in the Initial Remarketing shall be executed
through the Depositary, and the accounts of the respective Participants shall be
debited and credited and such Notes delivered by book-entry as necessary to
effect purchases and sales of such Notes. The Depositary shall make payment in
accordance with its normal procedures.

            (j) If any Holder selling Notes in the Initial Remarketing fails to
deliver such Notes, the Depositary Participant of such selling Holder and of any
other Person that was to have purchased Notes in the Initial Remarketing may
deliver to any such other Person an aggregate principal amount of Notes that is
less than the aggregate principal amount of Notes that otherwise was to be
purchased by such Person. In such event, the aggregate principal amount of Notes
to be so delivered shall be determined by such Participant, and delivery of such
lesser number of Notes shall constitute good delivery.

            (k) The Remarketing Agent is not obligated to purchase any Notes in
the Initial Remarketing or otherwise. None of the Trustee, the Depositary or the
Remarketing Agent shall be obligated in any case to provide funds to make
payment upon tender of the Notes for remarketing.

            (l) The tender and settlement procedures set forth in this Section
8.1, including provisions for payment by purchasers of Notes in the Initial
Remarketing, shall be subject to modification, notwithstanding any provision to
the contrary set forth herein, to the extent required by the Depositary or if
the book-entry system is no longer available for the Notes at the time of the
Initial Remarketing or if any Notes are then held in certificated form, to
facilitate the tendering and remarketing of Notes in certificated form. In
addition, the Remarketing Agent may, notwithstanding any provision to the
contrary set forth herein, modify the settlement procedures set forth herein in
order to facilitate the settlement process.

<PAGE>
                                                                              13


            (m) Anything herein to the contrary notwithstanding, the Reset Rate
shall in no event be below the initial interest rate payable for the Notes and
in no event exceed the maximum rate, if any, permitted by applicable law and, as
provided in the Remarketing Agreement, neither the Remarketing Agent nor the
Reset Agent shall have any obligation to determine whether there is any
limitation under applicable law on the Reset Rate or, if there is any such
limitation, the maximum permissible Reset Rate on the Notes.

            8.2 FINAL REMARKETING PROCEDURES.

            (a) If no Successful Initial Remarketing has occurred, then, not
later than 5:00 p.m., New York City time, on the second Business Day immediately
preceding the Final Remarketing Date, but no earlier than the Interest Payment
Date immediately preceding August 17, 2004, the Notes will be Remarketed, except
for Notes of Holders who have notified the Warrant Agent prior to the fifth
Business Day preceding August 17, 2004 of their intention to make Cash
Settlement of their related Purchase Contracts. Under Section 5.03 of the
Warrant Agreement, Holders of Equity Units that do not give notice of their
intention to make Cash Settlement of their related Purchase Contracts shall be
deemed to have consented to the disposition of the Notes constituting a
component of such Equity Units. Holders of Notes that are not components of
Equity Units shall give notice of their election to have such Notes remarketed
pursuant to the Pledge Agreement. Any such notice shall be irrevocable after
5:00 p.m., New York City time, on the second Business Day immediately preceding
the Final Remarketing Date and may not be conditioned upon the level at which
the Reset Rate is established. Pursuant to Section 5.03 of the Warrant
Agreement, and, in order to facilitate the remarketing, upon written request by
the Company made two Business Days prior thereto, the Warrant Agent shall
notify, by 11:00 a.m., New York City time, on the Business Day immediately
preceding the Final Remarketing Date, the Remarketing Agent, the Collateral
Agent, the Indenture Trustee and the Company of the aggregate principal amount
of Notes (that are components of Equity Units) to be remarketed. Pursuant to
Section 5.6(c) of the Pledge Agreement, the Custodial Agent shall notify the
Remarketing Agent of the aggregate principal amount of Notes (that are not
components of Equity Units) to be remarketed.

            (b) If any Holder of Equity Units does not give notice of its
intention to make a Cash Settlement or gives a notice of election to tender
Notes as described in Section 8.2(a), the Notes of such Holder shall be deemed
tendered, notwithstanding any failure by such Holder to deliver or properly
deliver such Notes to the Remarketing Agent for purchase.

            (c) The right of each Holder to have Notes tendered for purchase
shall be limited to the extent that: (i) the Remarketing Agent conducts a Final
Remarketing pursuant to the terms of the Remarketing Agreement and the Warrant
Agreement, (ii) Notes tendered have not been called for redemption, (iii) the
Remarketing Agent is able to find a purchaser or purchasers for tendered Notes
at a price of not less than 100% of the principal amount thereof and (iv) such
purchaser or purchasers deliver the purchase amount therefore to the Remarketing
Agent as and when required. The Holders of Notes that are remarketed in a
Successful Final Remarketing agree that the remarketing fee set forth in 5.03(b)
of the Warrant Agreement shall be deducted from the proceeds of the remarketing.

            (d) If no Successful Initial Remarketing has occurred, on the Final
Remarketing Date, the Remarketing Agent shall use reasonable efforts to
remarket, at a price equal to

<PAGE>
                                                                              14


approximately 100.25% of the aggregate principal amount thereof, Notes tendered
or deemed tendered for purchase.

            (e) If there are no Equity Units outstanding, none of the Holders
elect or are deemed to have elected to have Notes held by them remarketed, the
Reset Rate shall be the rate determined by the Reset Agent, subject to the terms
of the Remarketing Agreement, as the rate that would have been established had a
remarketing been held on the Final Remarketing Date.

            (f) On the Final Remarketing Date, the Reset Agent shall, pursuant
to the terms of the Remarketing Agreement, determine the Reset Rate.

            (g) If by 4:00 p.m., New York City time, on the Final Remarketing
Date, a Failed Final Remarketing has occurred, the Remarketing Agent shall,
pursuant to the terms of the Remarketing Agreement, so advise by telephone the
Company, the Trustee, the Collateral Agent and the Warrant Agent and the Reset
Rate shall be determined pursuant to Section 5.03.A. of the Warrant Agreement.

            (h) By approximately 4:30 p.m., New York City time, on the Final
Remarketing Date, the Remarketing Agent and the Reset Agent shall, pursuant to
the terms of the Remarketing Agreement, advise by telephone (i) the Depositary,
the Trustee, the Collateral Agent and the Warrant Agent, of the Reset Rate
determined in the Final Remarketing and, provided that there has not been a
Failed Final Remarketing, the aggregate principal amount of Notes sold in the
Final Remarketing, (ii) each purchaser (or the Depositary Participant thereof)
of the Reset Rate and, provided that there has not been a Failed Final
Remarketing, the aggregate principal amount of Notes such purchaser is to
purchase and (iii) provided that there has not been a Failed Final Remarketing,
each purchaser of the Notes to give instructions to its Depositary Participant
to pay the purchase price on the Warrant Settlement Date in same day funds
against delivery of the Notes purchased through the facilities of the
Depositary.

            (i) In accordance with the Depositary's normal procedures, on the
Reset Effective Date, the transactions described above with respect to each Note
tendered for purchase and sold in the Final Remarketing shall be executed
through the Depositary, and the accounts of the respective Depositary
Participants shall be debited and credited and such Notes delivered by
book-entry as necessary to effect purchases and sales of such Notes. The
Depositary shall make payment in accordance with its normal procedures.

            (j) If any Holder selling Notes in the Final Remarketing fails to
deliver such Notes, the Depository Participant of such selling Holder and of any
other Person that was to have purchased Notes in the Final Remarketing may
deliver to any such other Person an aggregate principal amount of Notes that is
less than the aggregate principal amount of Notes that otherwise was to be
purchased by such Person. In such event, the aggregate principal amount of Notes
to be so delivered shall be determined by such Depository Participant, and
delivery of such lesser aggregate principal amount of Notes shall constitute
good delivery.

            (k) The Remarketing Agent is not obligated to purchase any Notes in
the Final Remarketing or otherwise. None of the Trustee, or the Remarketing
Agent shall be obligated in any case to provide funds to make payment upon
tender of Notes for remarketing.

            (l) The tender and settlement procedures set forth in this Section
8.2, including provisions for payment by purchasers of Notes in the Final
Remarketing, shall be subject to

<PAGE>
                                                                              15


modification, notwithstanding any provision to the contrary set forth herein, to
the extent required by the Depository or if the book-entry system is no longer
available for the Notes at the time of the Final Remarketing or if any Notes are
then held in certificated form, to facilitate the tendering and remarketing of
Notes in certificated form. In addition, the Remarketing Agent may,
notwithstanding any provision to the contrary set forth herein, modify the
settlement procedures set forth herein in order to facilitate the settlement
process.

            (m) Anything herein to the contrary notwithstanding, the Reset Rate
shall in no event be below the initial interest rate payable for the Notes and
in no event exceed the maximum rate, if any, permitted by applicable law and, as
provided in the Remarketing Agreement, neither the Remarketing Agent nor the
Reset Agent shall have any obligation to determine whether there is any
limitation under applicable law on the Reset Rate or, if there is any such
limitation, the maximum permissible Reset Rate on the Notes.

            Section 9. MISCELLANEOUS.

            9.1 RATIFICATION OF INDENTURE. The Indenture, as supplemented by
Supplemental Indenture, is in all respects ratified and confirmed, and this
Supplemental Indenture shall be deemed a part of the Indenture in the manner and
to the extent herein and therein provided.

            9.2 GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE AND EACH NOTE SHALL
BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL
PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH
STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.

            9.3 COUNTERPARTS. This Supplemental Indenture may be executed in
several counterparts, each of which shall be an original, and all collectively
but one instrument.

            9.4 THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
are made solely by the Issuer.


<PAGE>
                                                                              16




IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be executed as of the date first above written.

                                    CITIZENS COMMUNICATIONS COMPANY, as
                                      Issuer

                                    By:     /s/ Donald B. Armour
                                        ----------------------------------------
                                        Name:  Donald B. Armour
                                        Title: Vice President
                                               Finance and Treasurer

                                    THE CHASE MANHATTAN BANK, as Trustee

                                    By:     /s/ James D. Heaney
                                        ----------------------------------------
                                        Name:  James D. Heaney
                                        Title: Vice President



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>7
<FILENAME>a2052437zex-4_4.txt
<DESCRIPTION>EXHIBIT 4.4
<TEXT>

<PAGE>

                                                                     EXHIBIT 4.4

                                                                  EXECUTION COPY

                              REMARKETING AGREEMENT



                                                                 June 19, 2001
MORGAN STANLEY & CO. INCORPORATED
1585 Broadway
New York, New York 10036

Ladies and Gentlemen:

            This Remarketing Agreement dated as of June 19, 2001 is among
Citizens Communications Company, a Delaware corporation (the "Company"),
Morgan Stanley & Co. Incorporated (the "Remarketing Agent") and The Chase
Manhattan Bank, as Warrant Agent, and attorney-in-fact for the Holders of the
Equity Units (as such terms are defined in the Warrant Agreement referred to
in Schedule I hereto) (the "Warrant Agent", also referred to herein as the
"Purchase Contract Agent"). The Remarketing Agent is undertaking to remarket
the 6 3/4% Senior Notes due 2006 (the "Senior Notes"), issued by the Company,
pursuant to the Senior Indenture (the "Senior Indenture"), dated as of
May 23, 2001, between the Company and The Chase Manhattan Bank, as Trustee, as
amended and supplemented by the Second Supplemental Indenture, dated as of
June 19, 2001 (the "Second Supplemental Indenture", and together with the
Senior Indenture, the "Indenture").

            The Remarketing (as defined below) of the Senior Notes is provided
for in the Pledge Agreement and the Warrant Agreement (as defined below).

            Section 1. Definitions.

            (a) Capitalized terms used and not defined in this Agreement shall
have the meanings set forth in the Warrant Agreement, dated as of June 19, 2001
(the "Warrant Agreement", also referred to herein as the "Purchase Contract
Agreement"), between the Company and the Warrant Agent, or, if not therein
defined, in the Pledge Agreement, dated as of June 19, 2001, between the
Company, The Bank of New York, as Collateral Agent, Securities Intermediary and
Custodial Agent and the Warrant Agent (the "Pledge Agreement") or, if not
therein defined, in the Underwriting Agreement, dated as of June 13, 2001,
between the Company and the several Underwriters listed in Schedule II thereto
(the "Underwriters"), or if not therein defined, in the Second Supplemental
Indenture, dated as of June 19, 2001 between the Company and The Chase Manhattan
Bank, as Trustee.

            (b) As used in this Agreement, the following terms shall have the
following meanings:

            "Act" means the Securities Act of 1933, as amended.

<PAGE>

                                                                               2


            "Additional Remarketing" means any Remarketing after the failure
of the first Initial Remarketing, on the third Business Day preceding May 17,
2004, in which the Remarketing Agent will use its reasonable efforts in its
discretion to remarket all of the Senior Notes from time to time thereafter
prior to the tenth Business Day preceding the Warrant Settlement Date.

            "Commission" means the Securities and Exchange Commission.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            "Morgan Stanley" means Morgan Stanley & Co. Incorporated.

            "Remarketed Senior Notes" means the Senior Notes subject to the
Remarketing, as identified to the Remarketing Agent by the Warrant Agent after
11:00 a.m., New York City time, on the third Business Day immediately preceding
the Reset Effective Date.

            "Remarketing" means the remarketing of the Remarketed Senior Notes
pursuant to the Remarketing Procedures.

            "Remarketing Agent" shall have the meaning set forth in Section 2(a)
hereof.

            "Remarketing Agreement" means this Agreement.

            "Remarketing Date" means any Initial Remarketing Date, Additional
Remarketing Date and/or Final Remarketing Date, as applicable.

            "Remarketing Procedures" means the procedures in connection with the
Remarketing of the Senior Notes described in the Warrant Agreement and the
Pledge Agreement, as the case may be; and

            "Transaction Documents" means the Warrant Agreement and the
Pledge Agreement, collectively.

            Section 2. Appointment and Obligations of the Remarketing Agent.

            (a) The Company hereby appoints Morgan Stanley as exclusive
remarketing agent (the "Remarketing Agent"), and Morgan Stanley hereby accepts
appointment:

            (i) as Remarketing Agent;

            (ii) as the Reset Agent to, in consultation with the Company, in the
      manner provided for herein and in the Warrant and the Second Supplemental
      Indenture with respect to the Senior Notes:

                  (1) determine the Reset Rate that, in the opinion of the Reset
         Agent, will, when applied to the Senior Notes, enable the Applicable
         Amount of the Senior Notes to have an approximate aggregate market
         value of 100.25% of the Treasury Portfolio Purchase Price as of the
         Initial Remarketing Date;

<PAGE>
                                                                               3


                  (2) determine the Reset Rate, if the Remarketing Agent has
         determined that it will be able to remarket all Notes tendered or
         deemed tendered prior to 4:00 p.m., New York City time, on the Initial
         Remarketing Date;

                  (3) by approximately 4:30 p.m., New York City time, on the
         Initial Remarketing Date, provided that there has not been a Failed
         Initial Remarketing, advise by telephone (i) the Company, the
         Collateral Agent and the Warrant Agent of the Reset Rate determined in
         the Initial Remarketing and the aggregate principal amount of Notes
         sold in the Initial Remarketing, (ii) each purchaser (or the
         Participant thereof) of the Reset Rate and the aggregate principal
         amount of Notes such purchaser is to purchase and (iii) each purchaser
         of the Notes to give instructions to its Participant to pay the
         purchase price on the Reset Effective Date in same day funds against
         delivery of the Notes purchased through the facilities of the
         Depositary;

                  (4) in the event that no Successful Initial Remarketing has
         taken place before the Final Remarketing Date, determine the Reset Rate
         that, in the opinion of the Reset Agent, will, when applied to the
         Senior Notes, enable a Senior Note to have an approximate market value
         of 100.25% of its principal amount as of the third Business Day
         preceding the Warrant Settlement Date;

                  (5) by approximately 4:30 p.m., New York City time, on the
         Final Remarketing Date, advise by telephone (i) the Depositary, the
         Trustee, the Collateral Agent and the Warrant Agent, of the Reset Rate
         determined in the Final Remarketing and, provided that there has not
         been a Failed Final Remarketing, the aggregate principal amount of
         Notes sold in the Final Remarketing, (ii) each purchaser (or the
         Depositary Participant thereof) of the Reset Rate and, provided that
         there has not been a Failed Final Remarketing, the aggregate principal
         amount of Notes such purchaser is to purchase and (iii) provided that
         there has not been a Failed Final Remarketing, each purchaser of the
         Notes to give instructions to its Depositary Participant to pay the
         purchase price on the Warrant Settlement Date in same day funds against
         delivery of the Notes purchased through the facilities of the
         Depositary; and

                  (6) in the event of a Failed Final Remarketing, determine the
         Reset Rate that will be equal to the Two Year Benchmark Treasury in
         effect on the Warrant Settlement Date plus the Applicable Spread;

            (iii) as the exclusive Remarketing Agent (subject to the right of
      Morgan Stanley to appoint additional remarketing agents hereunder as
      described below) to:

                  (1) remarket the Senior Notes of the Holders electing to have
         their Senior Notes remarketed and of the Holders of Equity Units on the
         first Initial Remarketing Date, who have not delivered the Treasury
         Portfolio to the Remarketing Agent or its designated entity on or prior
         to the fifth Business Day immediately preceding May 17, 2004, for
         settlement on May 17, 2004;

                  (2) if, by 4:00 p.m., New York City time, on the Initial
         Remarketing Date, a Failed Initial Remarketing has occurred, pursuant
         to the terms of the Remarketing

<PAGE>
                                                                               4


         Agreement, so advise by telephone the Company, the Collateral Agent
         and the Warrant Agent;

                  (3) by approximately 4:30 p.m., New York City time, on the
         Initial Remarketing Date, provided that there has not been a Failed
         Initial Remarketing, advise by telephone (i) the Company, the
         Collateral Agent and the Warrant Agent of the Reset Rate determined in
         the Initial Remarketing and the aggregate principal amount of Notes
         sold in the Initial Remarketing, (ii) each purchaser (or the
         Participant thereof) of the Reset Rate and the aggregate principal
         amount of Notes such purchaser is to purchase and (iii) each purchaser
         of the Notes to give instructions to its Participant to pay the
         purchase price on the Reset Effective Date in same day funds against
         delivery of the Notes purchased through the facilities of the
         Depositary;

                  (4) use its reasonable efforts in its discretion to conduct
         any Additional Remarketing after May 17, 2004 and on or before the
         tenth Business Day preceding August 17, 2004 to remarket the Senior
         Notes of the Holders electing to have their Senior Notes remarketed and
         of the Holders of Equity Units who have not delivered the Treasury
         Portfolio to the Remarketing Agent or its designated entity on or prior
         to the second Business Day immediately preceding the date of any
         Additional Remarketing;

                  (5) in the case that no Successful Initial Remarketing has
         taken place before the Final Remarketing Date, remarket on the Final
         Remarketing Date, the Senior Notes of the Holders electing to have
         their Senior Notes remarketed or of the Holders of Equity Units who
         have not settled early the related Warrants and have failed to notify
         the Warrant Agent, on or prior to the fifth Business Day immediately
         preceding the Warrant Settlement Date, of their intention to settle the
         related Warrants through Cash Settlement, or have so notified the
         Warrant Agent, but failed to deliver sufficient cash to the Warrant
         Agent on or prior to the fourth Business Day preceding August 17, 2004;
         (6) if by 4:00 p.m., New York City time, on the Final Remarketing Date,
         a Failed Final Remarketing has occurred, pursuant to the terms of the
         Remarketing Agreement, so advise by telephone the Company, the Trustee,
         the Collateral Agent and the Warrant Agent and the Reset Rate shall be
         determined pursuant to Section 5.03.A. of the Warrant Agreement; and

                  (7) by approximately 4:30 p.m., New York City time, on the
         Final Remarketing Date, advise by telephone (i) the Depositary, the
         Trustee, the Collateral Agent and the Warrant Agent, of the Reset Rate
         determined in the Final Remarketing and, provided that there has not
         been a Failed Final Remarketing, the aggregate principal amount of
         Notes sold in the Final Remarketing, (ii) each purchaser (or the
         Depositary Participant thereof) of the Reset Rate and, provided that
         there has not been a Failed Final Remarketing, the aggregate principal
         amount of Notes such purchaser is to purchase and (iii) provided that
         there has not been a Failed Final Remarketing, each purchaser of the
         Notes to give instructions to its Depositary Participant to pay

<PAGE>
                                                                               5


         the purchase price on the Warrant Settlement Date in same day funds
         against delivery of the Notes purchased through the facilities of the
         Depositary;

provided, in each case, that the Reset Rate shall in no event be below the
initial interest rate payable for the Notes, and in no event exceed the maximum
rate permitted by applicable law, and neither the Remarketing Agent nor the
Reset Agent shall have any obligation to determine whether there is any
limitation under applicable law on the Reset Rate or, if there is any such
limitation, the maximum permissible Reset Rate on the Notes;

            (b) In connection with the remarketing contemplated hereby, the
Remarketing Agent may enter into a Supplemental Remarketing Agreement (the
"Supplemental Remarketing Agreement") with the Company and the Warrant Agent,
which shall either be:

                  (i) substantially in the form attached hereto as Exhibit A
         (with such changes as the Company and the Remarketing Agent may agree
         upon, it being understood that changes may be necessary in the
         provisions of the Supplemental Remarketing Agreement due to changes in
         law or facts and circumstances or in the event that Morgan Stanley is
         not the sole remarketing agent, and with such further changes therein
         as the Remarketing Agent or the Company may reasonably request), or

                  (ii) in such other form as the Remarketing Agent may
         reasonably request, subject to the approval of the Company (such
         approval not to be unreasonably withheld). Anything herein to the
         contrary notwithstanding, to the extent that the parties hereto are
         unable to agree on the form or substance of the Supplemental
         Remarketing Agreement, Morgan Stanley shall not act as Remarketing
         Agent or Reset Agent hereunder. The Company agrees that Morgan Stanley
         shall have the right, on 15 Business Days' notice to the Company to
         appoint one or more additional remarketing agents so long as any such
         additional remarketing agents shall be reasonably acceptable to the
         Company. Upon any such appointment, the parties shall enter into an
         appropriate amendment to this Agreement to reflect the addition of any
         such remarketing agent.

            (c) Pursuant to the Supplemental Remarketing Agreement, the
Remarketing Agent, either as sole remarketing agent or as representative of a
group of remarketing agents appointed as aforesaid, will agree, subject to the
terms and conditions set forth herein and therein, to use its reasonable efforts
to (i) remarket, on the Initial Remarketing Date, the Senior Notes that the
Warrant Agent and the Custodial Agent shall have notified the Remarketing Agent
have been tendered for, or otherwise are to be included in, the Initial
Remarketing, at a price per Senior Note such that the aggregate price for the
Applicable Amount of the Senior Notes is approximately 100.25% of the Treasury
Portfolio Purchase Price and (ii) in the event of a Failed Initial Remarketing,
remarket, on the third Business Day immediately preceding the Warrant Settlement
Date, the Senior Notes that the Warrant Agent and the Custodial Agent shall have
notified the Remarketing Agent have been tendered for, or otherwise are to be
included in, the Final Remarketing, at a price of approximately 100.25% of the
aggregate principal amount of such Senior Notes. Notwithstanding the preceding
sentence, the Remarketing Agent shall not remarket any Senior Notes for a price
less than the price (the "Minimum Initial Remarketing Price") necessary for the
Applicable Amount of the Senior Notes to have an aggregate price equal to 100%
of the Treasury Portfolio Purchase Price, in the case of the Initial
Remarketing, or

<PAGE>
                                                                               6


the aggregate principal amount of such Senior Notes, in the case of the Final
Remarketing. After deducting the fee specified in Section 3 below, the proceeds
of such Initial Remarketing or Final Remarketing, as the case may be, shall be
paid to the Collateral Agent in accordance with Section 5.7 of the Pledge
Agreement and Section 5.02 or 5.03 of the Warrant Agreement (each of which
Sections are incorporated herein by reference).

            (d) The Remarketing Agent will notify the Company, the Securities
Intermediary, the Collateral Agent and the Warrant Agent of any Additional
Remarketing that it plans to conduct as soon as practical, but not later than
three Business Days in advance of the Additional Remarketing.

            (e) If the Remarketing on the third Business Day preceding May 17,
2004 fails, and if the Remarketing Agent in its discretion proceeds with any
Additional Remarketing as described under Sections 2(b) or 2(c) above, then in
case of any such Additional Remarketing, the Remarketing Agent shall notify the
Custodial Agent and all Holders of Senior Notes that are not part of Equity
Units of the date of such Additional Remarketing as soon as practical, but no
later than three Business Days immediately preceding the Remarketing Date.
Holders of separate Senior Notes who wish to participate in any Additional
Remarketing have to deliver their Senior Notes together with the notice of this
election to the Custodial Agent no later than two Business Days following the
notification by the Remarketing Agent.

            (f) It is understood and agreed that neither the Remarketing Agent
nor the Reset Agent shall have any obligation whatsoever to purchase any Senior
Notes, whether in the Initial Remarketing, Final Remarketing or otherwise, and
shall in no way be obligated to provide funds to make payment upon tender of
Senior Notes for remarketing or to otherwise expend or risk their own funds or
incur or be exposed to financial liability in the performance of their
respective duties under this Agreement or the Supplemental Remarketing
Agreement, and, without limitation of the foregoing, the Remarketing Agent shall
not be deemed an underwriter of the Remarketed Senior Notes. The Company shall
not be obligated in any case to provide funds to make payment upon tender of
Senior Notes for remarketing.

            Section 3. Fees.

            In the event of a Successful Initial Remarketing, the Remarketing
Agent shall retain as a Remarketing Fee an amount not exceeding 25 basis points
(.25 %) of the Minimum Initial Remarketing Price from any amount received in
connection with such Initial Remarketing in excess of the Minimum Initial
Remarketing Price. In the event of a Successful Final Remarketing, the
Remarketing Agent shall retain as the Remarketing Fee an amount not exceeding 25
basis points (.25%) of the aggregate principal amount of the Remarketed Senior
Notes from any amount received in connection with such Final Remarketing in
excess of the aggregate principal amount of such Remarketed Senior Notes. In
addition, the Reset Agent shall, in either case, receive from the Company a
reasonable and customary fee (the "Reset Agent Fee"); provided, however, that if
the Remarketing Agent shall also act as the Reset Agent, then the Reset Agent
shall not be entitled to receive any such Reset Agent Fee. Payment of such Reset
Agent Fee shall be made by the Company on the Initial Remarketing Date, in the
case of a Successful Initial Remarketing, or on the third Business Day
immediately preceding the Warrant Settlement Date, in the case of a Successful
Final Remarketing, in immediately available funds

<PAGE>
                                                                               7


or, upon the instructions of the Reset Agent, by certified or official bank
check or checks or by wire transfer, provided further that in the event of a
remarketing at a price less than 100.25%, the portion of the 25 basis points
equal to the shortfall shall be paid directly to the Remarketing Agent by the
Company.

            Section 4. Representations and Warranties of the Company.

            The Company represents and warrants (i) on and as of the date
hereof, (ii) on and as of the date the Prospectus or other Remarketing Materials
are first distributed in connection with the Remarketing (the "Commencement
Date"), (iii) on and as of the Remarketing Date, and (iv) on and as of the
Warrant Settlement Date that:

            (a) The Company meets the requirements for use of Form S-3 under the
Act; the Registration Statement has become effective; no stop order suspending
the effectiveness of the Registration Statement is in effect, and no proceedings
for such purpose have been instituted or threatened by the Commission.

            (b) Each part of the Registration Statement, when such part became
or becomes effective, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the Closing
Date and the Option Closing Date, if any, conformed or will conform in all
material respects with the requirements of the Act; each part of the
Registration Statement (other than the Excluded Information), when such part
became or becomes effective, did not or will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and the Prospectus
and any amendment or supplement thereto (other than the Excluded Information),
on the date of filing thereof with the Commission and on the Closing Date and
the Option Closing Date, if any, did not or will not include an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; except that the representations and warranties set forth
in this paragraph do not apply to statements in or omissions from any such
document in reliance upon, and in conformity with, written information furnished
to the Company by the Representatives, specifically for use in the Registration
Statement, the Prospectus or any amendment or supplement thereto.

            (c) The documents incorporated by reference in the Registration
Statement or the Prospectus, or any amendment or supplement thereto, when they
became effective under the Act or were filed with the Commission under the
Exchange Act, as the case may be, conformed in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable.

            (d) The consolidated financial statements of the Company and its
subsidiaries, together with the related notes and schedules, set forth or
incorporated by reference in the Registration Statement and Prospectus (other
than the Excluded Information) comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange

<PAGE>
                                                                               8


Act; such audited financial statements (other than the Excluded Information)
have been prepared in all material respects in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and no material modifications are
required to be made to the unaudited interim financial statements for them to be
in conformity with generally accepted accounting principles.

            (e) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware with
corporate power and authority to enter into and perform its obligations under
this Agreement, the Warrant Agreement, the Pledge Agreement and the Underwriting
Agreement (together, the "Equity Unit Agreements"), the Indenture and the Senior
Notes.

            (f) This Agreement has been duly and validly authorized, executed
and delivered by the Company.

            (g) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.

            (h) The shares of Common Stock outstanding prior to the issuance of
the Equity Units have been duly authorized and are validly issued, fully paid
and non-assessable, and are not subject to any preemptive or similar rights.

            (i) The shares of Common Stock to be issued and sold by the Company
pursuant to the settlement of the Warrants have been duly and validly authorized
and reserved for issuance; such shares of Common Stock, when issued and
delivered in accordance with the provisions of the Equity Unit Agreements, will
be validly issued, fully paid and non-assessable; and the issuance of such
shares of Common Stock will not be subject to any preemptive or similar rights.

            (j) The shares of Common Stock outstanding prior to the issuance of
the Equity Units are, and upon issuance the shares of Common Stock to be issued
and sold by the Company pursuant to the settlement of the Warrants will be,
listed on the New York Stock Exchange.

            (k) The Underwritten Securities and the Equity Unit Agreements have
been duly authorized and, at the Closing Date or, in the case of Option
Securities, the Option Closing Date, will have been duly executed and delivered
by the Company, and, as of the Closing Date or the Option Closing Date, as the
case may be, assuming due authorization, execution and delivery by parties
thereto other than the Company, the Equity Unit Agreements will constitute valid
and binding agreements of the Company, enforceable in accordance with their
terms, except to the extent limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or moratorium laws or by other laws now or hereafter
in effect relating to or affecting the enforcement of creditors' rights and by
general equitable principles (regardless of whether considered in a proceeding
in equity or at law), an implied covenant of good faith and fair dealing and
consideration of public policy, and Federal or state securities law limitations
on indemnification and contribution (the "Enforceability Exceptions"); provided,
however, that upon the occurrence of a Termination Event (as defined in the
Warrant Agreement), Section 365(e)(1) of the United States Bankruptcy Code (11
U.S.C. Sections 101-1330, as amended) and Section 541 of the

<PAGE>
                                                                               9


Bankruptcy Code should not substantively limit the provisions of Section 3.15
and 5.07 of the Warrant Agreement and Section 5.4 of the Pledge Agreement that
require termination of the Warrants and release of the Collateral Agent's
security interest in the Senior Notes or the Treasury Securities (as defined in
the Warrant Agreement); the Securities and the Equity Unit Agreements conform in
all material respects to the descriptions thereof contained in the Prospectus.

            (l) This Agreement has been duly authorized by the Company and when
executed and delivered by the Company will constitute a valid and binding
agreement of the Company, enforceable in accordance with its terms, except to
the extent limited by the Enforceability Exceptions; and the Remarketing
Agreement conforms in all material respects to the description thereof in the
Prospectus.

            (m) The Senior Notes have been duly authorized, and, when issued and
delivered pursuant to the Indenture, will have been duly executed,
authenticated, issued and delivered and will constitute valid and binding
obligations of the Company, entitled to the benefits provided by the Indenture;
the Indenture has been duly authorized, executed and delivered by the Company
and constitutes a valid and binding agreement, enforceable in accordance with
its terms, except to the extent limited by the Enforceability Exceptions; and
the Indenture conforms in all material respects to the description thereof in
the Prospectus.

            (n) The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act").

            (o) The Company is not, and after giving effect to the offering and
sale of the Equity Units and the application of the proceeds thereof as
described in the Prospectus, will not, be, required to register as an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.

            (p) The Company is not a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, and the rules and
regulations of the Commission thereunder.

            (q) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby, there has been no event or occurrence that
would result in a Material Adverse Effect.

            (r) The issue and sale of the Equity Units and the compliance by
each Issuer with all of the provisions of this Agreement, the Warrant Agreement,
the Indenture and the Senior Notes and the consummation of the transactions
contemplated herein and therein will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any constituent
document of any Issuer or any material agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it is bound except for
such breaches or defaults that would not in the aggregate have a material
adverse effect on the Company's ability to perform their respective obligations
under this Agreement, the Warrant Agreement, the Indenture and the Senior Notes.

<PAGE>
                                                                              10


            (s) The certificate delivered pursuant to paragraph (h) of Section 6
hereof and all other documents delivered by the Company or its representatives
in connection with the issuance and sale of the Remarketed Senior Notes were on
the dates on which they were delivered, or will be on the dates on which they
are to be delivered, in all material respects true and complete.

            Section 5. Covenants of the Company.

            The Company covenants and agrees as follows:

                  (a) (1) To prepare any registration statement or the
         Prospectus, if required in connection with the Remarketing, in a form
         approved by the Remarketing Agent and to file any such prospectus
         pursuant to the Act within the period required by the Act and the rules
         and regulations promulgated thereunder;

                  (2) to advise the Remarketing Agent, promptly after it
         receives notice thereof, of the time when any amendment to the
         Registration Statement has been filed or becomes effective or any
         supplement to the Prospectus or any amended Prospectus has been filed
         and to furnish the Remarketing Agent with copies thereof;

                  (3) to file promptly all reports and any definitive proxy or
         information statements required to be filed with the Commission
         pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
         subsequent to the date of the Prospectus and for so long as the
         delivery of a prospectus is required in connection with the offering or
         sale of the Remarketed Senior Notes;

                  (4) to advise the Remarketing Agent, promptly after it
         receives notice thereof, of the issuance by the Commission of any stop
         order or of any order preventing or suspending the use of the
         Prospectus, of the suspension of the qualification of any of the
         Remarketed Senior Notes for offering or sale in any jurisdiction, of
         the initiation or threatening of any proceeding for any such purpose,
         or of any request by the Commission for the amending or supplementing
         of the Registration Statement or the Prospectus or for additional
         information, and, in the event of the issuance of any stop order or of
         any order preventing or suspending the use of any Prospectus or
         suspending any such qualification, to use promptly its best efforts to
         obtain its withdrawal.

            (b) To furnish promptly to the Remarketing Agent and to counsel to
the Remarketing Agent a conformed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith.

            (c) To furnish to the Remarketing Agent in New York City such copies
of the following documents as the Remarketing Agent shall reasonably request:
(1) conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits); (2) the
Prospectus and any amended or supplemented Prospectus; (3) any document
incorporated by reference in the Prospectus (excluding exhibits thereto); and
(4) any Remarketing Materials; and, if the delivery of a prospectus is required
at any time in connection with the Remarketing and if at such time any event
shall have occurred as

<PAGE>
                                                                              11


a result of which the Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered, not
misleading, or if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to comply with
the Act or the Exchange Act, to notify the Remarketing Agent and, upon its
request, to file such document and to prepare and furnish without charge to the
Remarketing Agent and to any dealer in securities as many copies as the
Remarketing Agent may from time to time reasonably request of an amended or
supplemented Prospectus which will correct such statement or omission or effect
such compliance.

            (d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the reasonable judgment of the Company or the Remarketing Agent, be
required by the Act or requested by the Commission.

            (e) Prior to filing with the Commission (1) any amendment to the
Registration Statement or supplement to the Prospectus or (2) any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Remarketing Agent and counsel to the Remarketing Agent; and not to file any
such amendment or supplement which shall be reasonably disapproved by the
Remarketing Agent promptly after reasonable notice.

            (f) As soon as practicable, but in any event not later than eighteen
months, after the Effective Date of the Registration Statement, to make
"generally available to its security holders" an "earnings statement" of the
Company and its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the Rules and Regulations (including, at the option of the
Company, Rule 158). The terms "generally available to its security holders" and
"earnings statement" shall have the meanings set forth in Rule 158 of the Rules
and Regulations.

            (g) To take such action as the Remarketing Agent may reasonably
request in order to qualify the Remarketed Senior Notes for offer and sale under
the securities or "blue sky" laws of such jurisdictions as the Remarketing Agent
may reasonably request; provided that in no event shall the Company be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction.

            (h) For a period of five years following the Effective Date of the
Registration Statement or so long as any of the Senior Notes shall remain
outstanding, whichever is shorter, to supply to the Remarketing Agent copies of
such financial statements and other periodic and special reports as the Company
may from time to time distribute generally to the holders of any class of its
capital stock and to furnish to the Remarketing Agent a copy of each annual or
other report it shall be required to file with the Commission and such other
information concerning the Company and its subsidiaries as the Remarketing Agent
may reasonably request.

            (i) To pay: (1) the costs incident to the preparation and printing
of the Registration Statement, Prospectus and any Remarketing Materials and any
amendments or supplements thereto; (2) the costs of distributing the
Registration Statement, Prospectus and any

<PAGE>
                                                                              12


Remarketing Materials and any amendments or supplements thereto; (3) the fees
and expenses of qualifying the Remarketed Senior Notes under the securities laws
of the several jurisdictions as provided in Section 5(g) and of preparing,
printing and distributing a Blue Sky Memorandum (including related fees and
expenses of counsel to the Remarketing Agent); (4) all other costs and expenses
incident to the performance of the obligations of the Company, hereunder; and
(5) the reasonable fees and expenses of counsel to the Remarketing Agent in
connection with its duties hereunder.

            Section 6. Conditions to the Remarketing Agent's Obligations.

            The obligations of the Remarketing Agent hereunder are subject to
the following conditions:

            (a) The Senior Notes tendered for, or otherwise to be included in
the Initial Remarketing or Final Remarketing, as the case may be, have not been
called for redemption.

            (b) The Remarketing Agent is able to find a purchaser or purchasers
for tendered Senior Notes at a price not less than Minimum Initial Remarketing
Price.

            (c) The Warrant Agent, the Collateral Agent, the Custodial Agent and
the Company shall have performed their respective obligations in connection with
the Initial Remarketing and, in the event of a Failed Initial Remarketing, in
connection with the Final Remarketing, in each case pursuant to the Warrant
Agreement, the Pledge Agreement, this Agreement and the Supplemental Remarketing
Agreement, including, without limitation, giving the Remarketing Agent notice of
the Treasury Portfolio Purchase Price no later than 10:00 a.m., New York City
time, on the third Business Day prior to May 17, 2004, or the date of any
Additional Remarketing, in the case of the Initial Remarketing, and giving the
Remarketing Agent notice of the aggregate principal amount, as the case may be,
of Senior Notes to be remarketed, no later than 11:00 a.m., New York City time,
on the third Business Day prior to the Warrant Settlement Date, in the case of
the Final Remarketing, and, in each case, concurrently delivering the Senior
Notes to be remarketed to the Remarketing Agent.

            (d) The Prospectus shall have been timely filed with the Commission;
no stop order suspending the effectiveness of the Registration Statement or any
part thereof or suspending the qualification of the Indenture shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.

            (e) The Remarketing Agent shall not have discovered and disclosed to
the Company prior to or on the Remarketing Date that the Prospectus, the
Registration Statement, or the Remarketing Materials or any amendment or
supplement thereto contains any untrue statement of a fact which, in the opinion
of counsel for the Remarketing Agent, is material or omits to state any fact
which, in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.

            (f) Since the respective dates as of which information is given in
the Remarketing Materials (i) trading generally shall not have been suspended or
materially limited on or by, as

<PAGE>
                                                                              13


the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall not have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall not have been
declared by either Federal or New York State authorities or (iv) there shall not
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Representatives, is material and adverse and (b) in the case of any of the
events specified in clauses 6(f)(i) through 6(f)(iv), such event, singly or
together with any other such event, makes it, in the judgment of the Remarketing
Agent, impracticable to market the Equity Units on the terms and in the manner
contemplated in the Prospectus.

            (g) The representations and warranties of the Company contained
herein shall be true and correct in all material respects on and as of the date
hereof, (ii) on and as of the Commencement Date, (iii) on and as of the
Remarketing Date, and (iv) on and as of the Warrant Settlement Date, and the
Company shall have performed in all material respects all covenants and
agreements herein contained to be performed on its part at or prior to the
Remarketing Date.

            (h) The Company shall have furnished to the Remarketing Agent a
certificate, dated the Remarketing Date, of the President or a Vice President
and a financial or accounting officer of the Company, satisfactory to the
Remarketing Agent, stating that to the best of their knowledge after reasonable
investigation: (1) no order suspending the effectiveness of the Registration
Statement or prohibiting the sale of the Remarketed Senior Notes is in effect,
and no proceedings for such purpose are pending before or, to the knowledge of
such officers, threatened by the Commission; (2) the representations and
warranties of the Company in Section 3 are true and correct on and as of the
Remarketing Date and the Company has performed in all material respects all
covenants and agreements contained herein to be performed on its part at or
prior to the Remarketing Date; (3) the Registration Statement, as of its
Effective Date, and the Remarketing Materials, as of their respective dates (in
each case, other than the Excluded Information), did not contain any untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and the Prospectus (other than the Excluded Information) did not
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

            (i) On the Remarketing Date, the Remarketing Agent shall have
received a letter addressed to the Remarketing Agent and dated such date, in
form and substance satisfactory to the Remarketing Agent of KPMG LLP, or such
other firm of nationally recognized independent public accountants satisfactory
to the Remarketing Agent, addressing such matters as are set forth in Section
5(h) of the Underwriting Agreement, adapted as necessary to relate to the
securities being remarketed hereunder and to the Remarketing Materials.

            (j) Winston & Strawn, outside counsel to the Company, shall have
furnished to the Remarketing Agent their opinion letters addressed to the
Remarketing Agent and dated the Remarketing Date, in form and substance
reasonably satisfactory to the Remarketing Agent addressing such matters as are
set forth in such counsels' opinions furnished pursuant to Section

<PAGE>
                                                                              14


5(c) of the Underwriting Agreement, adapted as necessary to relate to the
securities being remarketed hereunder and to the Remarketing Materials.

            (k) L. Russell Mitten, Vice President and General Counsel of the
Company, shall have furnished to the Remarketing Agent an opinion letter
addressed to the Remarketing Agent and dated the Remarketing Date, in form and
substance reasonably satisfactory to the Remarketing Agent, addressing such
matters as are set forth in his opinion furnished pursuant to Section 5(d) of
the Underwriting Agreement, adapted as necessary to relate to the securities
being remarketed hereunder and to the Remarketing Materials.

            (l) Simpson Thacher & Bartlett, special counsel for the Remarketing
Agent, shall have furnished to the Remarketing Agent its opinion letter,
addressed to the Remarketing Agent and dated the Remarketing Date, in form and
substance satisfactory to the Remarketing Agent, addressing such matters as are
set forth in such counsels' opinion furnished pursuant to Section 5(e) of the
Underwriting Agreement, adapted as necessary to relate to the securities being
remarketed hereunder and to the Remarketing Materials.

            Section 7. Indemnification and Contribution.

            (a) The Company agrees to indemnify and hold harmless the
Remarketing Agent and each person, if any, who controls any Remarketing Agent
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Remarketing Agent furnished to the Company in
writing by such Remarketing Agent expressly for use therein.

            (b) The Remarketing Agent agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Remarketing Agent, but only
with reference to information relating to such Remarketing Agent furnished to
the Company in writing by the Remarketing Agent expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.

            (c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either Section 7(a) or 7(b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and

<PAGE>
                                                                              15


the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay 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, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (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 respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Remarketing Agent, in
the case of parties indemnified pursuant to Section 7(a) above, and by the
Company, in the case of parties indemnified pursuant to Section 7(b) above. 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. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.

            (d) To the extent the indemnification provided for in Section 7(a)
or 7(b) above is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Remarketing Agent on
the other hand from the remarketing of the Remarketed Senior Notes or (ii) if
the allocation provided by clause 7(d)(i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 7(d)(i) above but also the relative fault of the
Company on the one hand and of the Remarketing Agent on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Remarketing Agent on the other hand in connection with the remarketing
of the Remarketed

<PAGE>
                                                                              16


Senior Notes shall be deemed to be in the same respective proportions as the net
proceeds from the remarketing of such Remarketed Senior Notes (before deducting
expenses) received by the Company and the total Remarketing Fees and commissions
received by the Remarketing Agent bear to the aggregate price paid for the
Remarketed Senior Notes. The relative fault of the Company on the one hand and
the Remarketing Agent on the other hand 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 or by the Remarketing Agent and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

            (e) The Company and the Remarketing Agent agree that it would not be
just or equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Remarketing Agent were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 7(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, 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 Section 7, no Remarketing Agent shall be required to
contribute any amount in excess of the amount by which the total price at which
the Remarketed Senior Notes remarketed by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Remarketing
Agent has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. 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 remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies, which may otherwise be available to
any indemnified party at law or in equity.

            (f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Remarketing Agent or any person
controlling any Remarketing Agent or the Company, its officers or directors or
any person controlling the Company and (iii) acceptance of and payment for any
of the Remarketed Senior Notes.

            Section 8. Resignation and Removal of the Remarketing Agent.

            The Remarketing Agent may resign and be discharged from its duties
and obligations hereunder, and the Company may remove the Remarketing Agent, by
giving 60 days' prior written notice, in the case of a resignation, to the
Company, the Depositary, the Indenture Trustee, the Collateral Agent, the
Custodial Agent and the Securities Intermediary and, in the case of a removal,
the removed Remarketing Agent, the Depositary, the Indenture Trustee, the
Collateral Agent, the Custodial Agent and the Securities Intermediary; provided,
however, that:

            (a) the Company may not remove the Remarketing Agent unless (1) the
Remarketing Agent becomes involved as a debtor in a bankruptcy, insolvency or
similar

<PAGE>
                                                                              17


proceeding, (2) the Remarketing Agent shall not be among the 15 underwriters
with the largest volume underwritten in dollars, on a lead or co-managed basis,
of U.S. domestic debt securities during the twelve-month period ended as of the
last calendar quarter preceding the Remarketing Date, (3) the Remarketing Agent
shall be subject to one or more legal restrictions preventing the performance of
its obligations hereunder, or (4) the Remarketing Agent shall determine that (i)
the Company has not met its obligation under Section 6(d) or (ii) using its
reasonable efforts, the Remarketing Agent would be unable to consummate the
Remarketing on the terms and in the manner contemplated in the Prospectus and
the Remarketing Materials;

            (b) the Remarketing Agent may not resign without reasonable cause;
and

            (c) no such resignation nor any such removal shall become effective
until the Company shall have appointed at least one nationally recognized
broker-dealer as successor Remarketing Agent and such successor Remarketing
Agent shall have entered into a remarketing agreement with the Company, in which
it shall have agreed to conduct the Remarketing in accordance with the
Remarketing Procedures in all material respects.

In any such case, the Company will use its reasonable efforts to appoint a
successor Remarketing Agent and enter into such a remarketing agreement with
such person as soon as reasonably practicable. The provisions of Sections 3, 7
and 8 shall survive the resignation or removal of any Remarketing Agent pursuant
to this Agreement.

            Section 9. Dealing in the Remarketed Senior Notes.

            The Remarketing Agent, when acting as a Remarketing Agent or in its
individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold and deal in any of the Remarketed Senior Notes. The Remarketing Agent
may exercise any vote or join in any action which any beneficial owner of
Remarketed Senior Notes may be entitled to exercise or take pursuant to the
Indenture with like effect as if it did not act in any capacity hereunder. The
Remarketing Agent, in its individual capacity, either as principal or agent, may
also engage in or have an interest in any financial or other transaction with
the Company as freely as if it did not act in any capacity hereunder.

            Section 10. Remarketing Agent's Performance; Duty of Care.

            The duties and obligations of the Remarketing Agent shall be
determined solely by the express provisions of this Agreement, the Indenture,
the Pledge Agreement and the Warrant Agreement. No implied covenants or
obligations of or against the Remarketing Agent shall be read into this
Agreement, the Indenture, the Pledge Agreement or the Warrant Agreement. In the
absence of bad faith on the part of the Remarketing Agent, the Remarketing Agent
may conclusively rely upon any document furnished to it, as to the truth of the
statements expressed in any of such documents. The Remarketing Agent shall be
protected in acting upon any document or communication reasonably believed by it
to have been signed, presented or made by the proper party or parties except as
otherwise set forth herein. The Remarketing Agent, acting under this Agreement,
shall incur no liability to the Company or to any holder of Remarketed Senior
Notes in its individual capacity or as Remarketing Agent for any action or
failure to act, on its part in connection with a Remarketing or otherwise,
except if such liability is

<PAGE>
                                                                              18


judicially determined to have resulted from its failure to comply with the
material terms of this Agreement or the negligence or willful misconduct on its
part.

            Section 11. Termination.

            This Agreement shall terminate as to the Remarketing Agent on the
effective date of the resignation or removal of the Remarketing Agent pursuant
to Section 8. In addition, this Agreement may be terminated (A) by the Company
by notifying the Remarketing Agent at any time before the time when the
Remarketed Senior Notes are first generally offered by the Remarketing Agent to
dealers by letter or telegram, or (B) by the Remarketing Agent by notifying the
Company at or prior to 10:00 a.m. (New York City time) five business days prior
to the Remarketing Date by letter or telegram if:

            (a) in the judgment of the Remarketing Agent the sale and delivery
of the Senior Notes is rendered impracticable or inadvisable because: (1)
additional material governmental restrictions, not in force and effect on the
date hereof, shall have been imposed upon trading in securities generally or
minimum or maximum prices shall have been generally established on the New York
Stock Exchange or on the American Stock Exchange, or trading in securities
generally shall have been suspended on either such Exchange or a general banking
moratorium shall have been established by Federal or New York authorities; (2)
any event shall have occurred or shall exist which makes untrue or incorrect in
any material respect any statement or information contained in the Registration
Statement or Prospectus or which is not reflected in the Registration Statement
or Prospectus but should be reflected therein in order to make the statements or
information contained therein not misleading in any material respect, and such
untrue or incorrect statement or information is not corrected in an amendment or
supplement to the Registration Statement or Prospectus, or (3) a war involving
the United States or other national calamity shall have occurred or shall have
accelerated, to such an extent, as in the judgment of the Remarketing Agent, to
make it, in the judgment of the Remarketing Agent, impracticable or inadvisable
to proceed with the Remarketing on the terms and in the manner contemplated in
the Prospectus or in the Remarketing Materials; or

            (b) any of the conditions described in Section 6 are not satisfied.

            If this Agreement is terminated pursuant to any of the provisions
hereof, except as otherwise provided herein, the Company shall not be under any
liability to the Remarketing Agent and the Remarketing Agent shall not be under
any liability to the Company, except that (a) if this Agreement is terminated by
the Remarketing Agent because of any failure or refusal on the part of the
Company to comply with the terms or to fulfill any of the conditions of this
Agreement, the Company will reimburse the Remarketing Agent for all of its
out-of-pocket expenses (including the reasonable fees and disbursements of its
counsel) reasonably incurred by it, and (b) if the Remarketing Agent failed or
refused to purchase the Remarketed Senior Notes hereunder, without some reason
sufficient hereunder to justify the cancellation or termination of if
obligations hereunder, the Remarketing Agent shall not be relieved of liability
to the Company for damages occasioned by its default.

            Section 12. Notices.

<PAGE>
                                       19


            All statements, requests, notices and agreements hereunder shall be
in writing, and:

            (a) if to the Company, to 3 High Ridge Road, Stamford, CT 06095,
Attention: Scott N. Schneider (Tel: 203-614-5600), with a copy to Winston &
Strawn, 200 Park Avenue, New York, NY 10166, Attention: David F. Kroenlein
(Tel: 212-294-6700); and

            (b) if to the Remarketing Agent, to Morgan Stanley & Co.
Incorporated, at 1585 Broadway, New York, NY 10036, Attention: Equity Capital
Markets Syndicate Desk, with a copy to Simpson Thacher & Bartlett, 425
Lexington Avenue, New York, NY 10017, Attention: Vincent Pagano, Jr.
(Tel: 212-455-2000); and

            (c) if to the Warrant Agent, to The Chase Manhattan Bank, 450
West 33rd Street, New York, NY 10001, Attention: Institutional Trust Services.

Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.

            Section 13. Persons Entitled to Benefit of Agreement.

            This Agreement shall inure to the benefit of and be binding upon the
Remarketing Agent, the Company and their respective successors. This Agreement
and the terms and provisions hereof are for the sole benefit of only those
persons, except that (a) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also be deemed to be
for the benefit of the Remarketing Agent and the person or persons, if any, who
control the Remarketing Agent within the meaning of Section 15 of the Act and
(b) the indemnity agreement of the Remarketing Agent contained in Section 7(b)
of this Agreement shall be deemed to be for the benefit of the Company's
directors, officers and Trustee who sign the Registration Statement and any
person controlling the Company within the meaning of Section 15 of the Act.
Nothing contained in this Agreement is intended or shall be construed to give
any person, other than the persons referred to herein, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.

            Section 14. Survival.

            The respective indemnities, representations, warranties and
agreements of the Company and the Remarketing Agent contained in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement, shall
survive the Remarketing and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.

            Section 15. Governing Law.

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

            Section 16. Counterparts.

            This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original but all such counterparts shall together constitute one
and the same instrument.

<PAGE>
                                                                              20


            Section 17. Headings.

            The headings herein are inserted for convenience of reference only
and are not intended to be part of, or to affect the meaning or interpretation
of, this Agreement.


<PAGE>
                                                                              21


            If the foregoing correctly sets forth the agreement between the
Company, the Remarketing Agent and the Warrant Agent, please indicate your
acceptance in the space provided for that purpose below.

                                    Very truly yours,



                                    CITIZENS COMMUNICATIONS COMPANY


                                    By:     /s/ Donald B. Armour
                                       -----------------------------------------
                                       Name: Donald B. Armour
                                       Title: Vice President, Finance and
                                              Treasurer

Accepted:

MORGAN STANLEY & CO. INCORPORATED

 By:     /s/ Constantine N. Darras
    --------------------------------------
    Name: Constantine N. Darras
    Title: Vice President


THE CHASE MANHATTAN BANK, as Warrant Agent

By:     /s/ James D. Heaney
   ---------------------------------------
   Name:  James D. Heaney
   Title: Vice President


<PAGE>

                                                                       Exhibit A
                                                        to Remarketing Agreement


                   Form of Supplemental Remarketing Agreement

            Supplemental Remarketing Agreement dated __________, ____ among
Citizens Communications Company, a Delaware corporation (the "Company"), Morgan
Stanley & Co. Incorporated (the "Remarketing Agent") and The Chase Manhattan
Bank, as Warrant Agent and attorney-in-fact for the Holders of the Equity Units
(as such terms are defined in the Warrant Agreement referred to in Schedule I
hereto).

            NOW, THEREFORE, for and in consideration of the covenants herein
made, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

            1. Definitions. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the Remarketing Agreement
dated as of June ___, 2001 (the "Remarketing Agreement") between the Company and
Morgan Stanley & Co. Incorporated or, if not defined in the Remarketing
Agreement, the meanings assigned to them in the Warrant Agreement (as defined in
Schedule I hereto).

            2. Registration Statement and Prospectus. The Company has filed with
the Commission, and there has become effective, a registration statement on Form
S-3, including a prospectus, relating to the Senior Notes (as such term is
defined on Schedule I hereto). Such Registration Statement, as amended, and
including the information deemed to be a part thereof pursuant to Rule 430A
under the Act, and the documents incorporated or deemed to be incorporated by
reference therein, are hereinafter called, collectively, the "Registration
Statement"; [the related preliminary prospectus dated __________, including the
documents incorporated or deemed to be incorporated by reference therein, [and
preliminary prospectus supplement dated __________] are hereinafter called,
[collectively] the "preliminary prospectus";] and the related prospectus dated
__________, including the documents incorporated or deemed to be incorporated by
reference therein, [and prospectus supplement dated __________] are hereinafter
called, [collectively,] the "Prospectus." The Company has provided copies of the
Registration Statement [,the preliminary prospectus] and the Prospectus to the
Remarketing Agent, and hereby consents to the use of the [preliminary
prospectus] and the Prospectus in connection with the remarketing of the Senior
Notes. [IN THE EVENT THAT A REGISTRATION STATEMENT IS NOT REQUIRED, INSERT THE
FOLLOWING: The Company has provided to the Remarketing Agent, for use in
connection with remarketing of the Senior Notes (as such term is defined on
Schedule I hereto), a [preliminary remarketing memorandum and] remarketing
memorandum and [describe other materials, if any]. Such remarketing memorandum
(including the documents incorporated or deemed to be incorporated by reference
therein, [and] [describe other materials] are hereinafter called, collectively,
the "Prospectus," [and such preliminary marketing memorandum (including the
documents incorporated or deemed to be incorporated by reference therein) is
hereinafter called a "preliminary prospectus")]. The Company hereby consents to
the use of the Prospectus [and the


                                      A-1
<PAGE>

preliminary prospectus] in connection with the remarketing of the Senior Notes.]
All references in this Agreement to amendments or supplements to the
Registration Statement [the preliminary prospectus] or the Prospectus shall be
deemed to mean and include the filing of any document under the Exchange Act,
which is incorporated or deemed to be incorporated by reference in the
Registration Statement [,the preliminary prospectus] or the Prospectus, as the
case may be.

            3.  Provisions Incorporated by Reference.

            (a) Subject to Section 3(b) hereof, the provisions of the
Underwriting Agreement (other than [Section __, Section __, Section __, Section
__, Section __ and Section __] thereof) are incorporated herein by reference,
mutatis mutandis, and the Company hereby makes the representations and
warranties, and agrees to comply with the covenants and obligations, set forth
in the provisions of the Underwriting Agreement incorporated by reference
herein, as modified by the provisions of Section 3(b) hereof.

            (b) With respect to the provisions of the Underwriting Agreement
incorporated herein, for the purposes hereof, (i) all references therein to the
"Underwriter" or "Underwriters" shall be deemed to refer to the Remarketing
Agent and all references to the "Representative" or the "Representatives" shall
be deemed to refer to Morgan Stanley & Co. Incorporated ("Morgan Stanley"); (ii)
all references therein to the "Units" or "Firm Units" shall be deemed to refer
to the Senior Notes as defined herein; (iii) all references therein to the "Time
of Delivery" shall be deemed to refer to the Remarketing Closing Date specified
in Schedule I hereto; (iv) all references therein to the "Registration
Statement", [the "Preliminary Prospectus"] or the "final prospectus" shall be
deemed to refer to the Registration Statement[, the preliminary prospectus] and
the Prospectus, respectively, as defined herein; (v) all references therein to
this "Agreement," the "Underwriting Agreement," "hereof "herein" and all
references of similar import, shall be deemed to mean and refer to this
Supplemental Remarketing Agreement; (vi) all references therein to "the date
hereof," "the date of this Agreement" and all similar references shall be deemed
to refer to the date of this Supplemental Remarketing Agreement; (vii) all
references therein to any "settlement date" shall be disregarded; and (viii)
[other changes].]

            4. Remarketing. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth or incorporated by
reference herein and in the Remarketing Agreement, the Remarketing Agent agrees
to use its reasonable efforts to remarket, in the manner set forth in Section
2(b) of the Remarketing Agreement, the aggregate principal amount of Senior
Notes set forth in Schedule I hereto at a purchase price not less than 100% of
the [Minimum Initial Remarketing Price] [the aggregate principal amount of the
Senior Notes]. In connection therewith, the registered holder or holders thereof
agree, in the manner specified in Section 5 hereof, to pay to the Remarketing
Agent a Remarketing Fee equal to an amount not exceeding 25 basis points (.25%)
of [the Minimum Initial Remarketing Price] [such aggregate principal amount,]
payable by deduction from any amount received in connection from such [Initial]
[Final] Remarketing in excess of the [Minimum Initial Remarketing Price] [the
aggregate principal amount of the Senior Notes]. Pursuant to the Indenture, the
right of each holder of Senior Notes to have Senior Notes tendered for purchase
shall be limited to the extent set forth in the last sentence of Section 2(d) of
the Remarketing Agreement (which is incorporated by reference herein). As more
fully provided in Section 2(e) of the Remarketing Agreement (which is
incorporated by reference herein), the Remarketing Agent is not obligated


                                      A-2
<PAGE>

to purchase any Senior Notes in the remarketing or otherwise, and neither the
Company nor the Remarketing Agent shall be obligated in any case to provide
funds to make payment upon tender of Senior Notes for remarketing.

            5. Delivery and Payment. Delivery of payment for the Remarketed
Senior Notes by the purchasers thereof identified by the Remarketing Agent and
payment of the Remarketing Fee shall be made on the Remarketing Closing Date at
the location and time specified in Schedule I hereto (or such later date not
later than five Business Days after such date as the Remarketing Agent shall
designate), which date and time may be postponed by agreement between the
Remarketing Agent and the Company. Delivery of the Remarketed Senior Notes and
payment of the Remarketing Fee shall be made to the Remarketing Agent against
payment by the respective purchasers of the Remarketed Senior Notes of the
consideration therefor as specified herein, which consideration shall be paid to
the Collateral Agent for the account of the persons entitled thereto by
certified or official bank check or checks drawn on or by a New York Clearing
House bank and payable in immediately available funds or in immediately
available funds by wire transfer to an account or accounts designated by the
Collateral Agent.

            If the Senior Notes are not represented by a Global Security held by
or on behalf of The Depository Trust Company, certificates for the Senior Notes
shall be registered in such names and denominations as the Remarketing Agent may
request not less than one full Business Day in advance of the Remarketing
Closing Date, and the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the registered holder or holders thereof agree to
have such certificates available for inspection, packaging and checking by the
Remarketing Agent in New York, New York not later than 1:00 p.m. on the Business
Day prior to the Remarketing Closing Date.

            6. Notices. Unless otherwise specified, any notices, requests,
consents or other communications given or made hereunder or pursuant hereto
shall be made in writing or transmitted by any standard form of
telecommunication, including telephone or telecopy, and confirmed in writing.
All written notices and confirmations of notices by telecommunication shall be
deemed to have been validly given or made when delivered or mailed, by
registered or certified mail, return receipt requested and postage prepaid. All
such notices, requests, consents or other communications shall be addressed as
follows: if to the Company, to _____________________, with a copy to Winston &
Strawn, 200 Park Avenue, New York, NY 10166, Attention: _____________; if to the
Remarketing Agent, to Morgan Stanley & Co. Incorporated, at 1585 Broadway, New
York, NY 10036, Attention: __________, with a copy to Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, NY 10017, Attention: Vincent Pagano,
Jr.; and if to the Warrant Agent, to The Chase Manhattan Bank, 450 West 33rd
Street, New York, NY 10001, Attention: Institutional Trust Services, or to such
other address as any of the above shall specify to the other in writing.

            7. Conditions to Obligations of Remarketing Agent. Anything herein
to the contrary notwithstanding, the parties hereto agree that the obligations
of the Remarketing Agent under this Agreement are subject to the satisfaction,
on the Remarketing Closing Date, of the conditions incorporated by reference
herein from Section 5 of the Underwriting Agreement as modified by Section 6
hereof (including, without limitation, the delivery of opinions of counsel,
officers' certificates and accountants' comfort letters as reasonably requested
by the Remarketing


                                      A-3
<PAGE>

Agent and in form and substance reasonably satisfactory to the Remarketing
Agent, the accuracy as of the Remarketing Closing Date of the representations
and warranties of the Company included and incorporated by reference herein and
the performance by the Company of its obligations under the Remarketing
Agreement and this Agreement as and when required hereby and thereby). In
addition, anything herein to the contrary notwithstanding, this Agreement may be
terminated by the Remarketing Agent, by notice to the Company at any time prior
to the time of settlement on the Remarketing Closing Date, if any of the events
or conditions set forth in Section ____ of the Underwriting Agreement.

            8.  Indemnity and Contribution. Anything herein to the contrary
notwithstanding, the Remarketing Agent shall be entitled to indemnity and
contribution on the terms and conditions set forth in the Remarketing
Agreement.

            If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company, the Warrant Agent and the Remarketing Agent.

                                    Very truly yours,

                                    CITIZENS COMMUNICATIONS COMPANY


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

CONFIRMED AND ACCEPTED:

MORGAN STANLEY & CO. INCORPORATED



By: _____________________________________
           Authorized Signatory

[Add other Remarketing Agents, if any]

By: _____________________________________
    Name:
    Title:



                                      A-4
<PAGE>


THE CHASE MANHATTAN BANK, as Warrant Agent


By: _____________________________________
    Name:
    Title:




                                      A-5
<PAGE>

                                   SCHEDULE I

      o     Senior Notes subject to the remarketing: 6 3/4% Senior Notes due
            2006 of Citizens Communications Company (the "Senior Notes").

      o     Warrant Agreement, dated as of June 19, 2001 (the "Warrant
            Agreement", also referred to as the "Purchase Contract Agreement")
            by and between Citizens Communications Company, a Delaware
            corporation, and The Chase Manhattan Bank, a New York banking
            corporation, as warrant agent.

      o     Pledge Agreement dated as of June 19, 2001 (the "Pledge Agreement")
            by and between Citizens Communications Company, a Delaware
            corporation, The Bank of New York, a New York banking corporation,
            as collateral agent, securities intermediary and custodial agent and
            The Chase Manhattan Bank, a New York banking corporation, as warrant
            agent.

      o     Minimum Initial Remarketing Price: Aggregate price equal to 100% the
            Aggregate Principal Amount of Senior Notes

      o     Underwriting Agreement, dated June 13, 2001 (the "Underwriting
            Agreement") among Citizens Communications Company, a Delaware
            corporation, Morgan Stanley & Co. Incorporated and J.P. Morgan
            Securities Inc., as representatives of the several underwriters
            named therein.

      o     Remarketing Closing Date, Time and Location: __________________

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.5
<SEQUENCE>8
<FILENAME>a2052437zex-4_5.txt
<DESCRIPTION>EXHIBIT 4.5
<TEXT>

<PAGE>

                                                                     EXHIBIT 4.5


                          FORM OF SENIOR NOTE DUE 2006

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

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE CUSTODIAN MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.9 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 4.1 OF THE SECOND SUPPLEMENTAL
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE, AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY.]*

                         Citizens Communications Company

                                                          SENIOR NOTE DUE 2006

NO. SN2006-_____                                         CUSIP No. 17453B AC 5


ORIGINAL ISSUE DATE: ____________________

$___________________

CITIZENS COMMUNICATIONS COMPANY, a corporation duly organized and existing under
the laws of the State of Delaware (hereinafter referred to as the "Company") for
value received, hereby promises to pay, to [Cede & Co.]* [The Chase Manhattan
Bank, as Warrant Agent, under the Warrant Agreement, dated as of June 19, 2001
(the "Warrant Agreement"), between the Company and The Chase Manhattan Bank, as
Warrant Agent]** or registered assigns, the principal amount that is listed on
the Schedule of Increases or Decreases attached hereto (the

- ----------
*Insert for Global Note only
**Insert for Definitive Note only


<PAGE>

"Schedule of Increases or Decreases"), on August 17, 2006, and to pay interest
on the amount listed on the Schedule of Increases or Decreases from June 19,
2001, quarterly, on February 17, May 17, August 17 and November 17 in each year,
commencing August 17, 2001, initially at the rate of 6-3/4% per annum through
and including the day immediately preceding the Reset Effective Date, and at the
Reset Rate thereafter until the principal hereof shall have been paid or duly
made available for payment and, to the extent permitted by law, to pay interest,
compounded quarterly, on any overdue principal and premium, if any, through and
including the day immediately preceding the Reset Effective Date, and at the
Reset Rate thereafter until August 17, 2006. Interest will be paid to the Person
in whose name this Note is registered at the close of business on the regular
record date for such interest, which shall be the day (whether or not a Business
Day), next preceding such interest payment date. Any such interest not so
punctually paid will forthwith cease to be payable to the holder on such regular
record date and may either be paid to the Person in whose name this Note or one
or more predecessor Notes is registered at the close of business on a special
record date for the payment of such defaulted interest to be fixed by the
Trustee, notice whereof shall be given to holders of Notes not less than 10 days
prior to such special record date, or be paid at any time in any other lawful
manner, all as more fully provided in the Indenture.

            Payment of the principal of (and premium, if any) and interest on
this Note will be made at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public or private debt; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
register maintained by the Company.

            This Note is, to the extent provided in the Indenture, unsecured and
will rank in right of payment on a parity with all other unsecured senior
obligations of the Company.

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

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


                                      -2-
<PAGE>



            IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.

Dated: June ___, 2001               CITIZENS COMMUNICATIONS COMPANY



                                    By:______________________________
                                    Name:
                                    Title:




                                    (SEAL)


<PAGE>

                        CERTIFICATE OF AUTHENTICATION OF
                                     TRUSTEE

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

                                    By:   THE CHASE MANHATTAN BANK, as
                                          Trustee

                                          By:   ____________________________
                                                Authorized Officer





            Dated: June ____, 2001



<PAGE>



                                [REVERSE OF NOTE]

                         CITIZENS COMMUNICATIONS COMPANY

                              Senior Note Due 2006

            This security is one of a duly authorized issue of securities of the
Company (herein called the "Notes") issued and to be issued in one or more
series under the Indenture, dated as of May 23, 2001, as amended and
supplemented by the Second Supplemental Indenture, dated as of June 19, 2001 (as
so amended and supplemented, the "Indenture"), between the Company and The Chase
Manhattan Bank, as Trustee (the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the holders of the Notes and of the terms upon which the Notes are,
and are to be, authenticated and delivered. This security is one of the series
designated on the face hereof, limited in aggregate principal amount of up to
$460,000,000.

            Principal of the Notes is payable on August 17, 2006 (the "Stated
Maturity"), subject to the provisions of the Indenture respecting acceleration.
The Notes will not be redeemable prior to their Stated Maturity except upon the
occurrence of a Tax Event as described below.

            If a Tax Event occurs and is continuing, the Company may, at its
option and upon not less than 30 nor more than 60 days' notice to the Holders of
the Securities, redeem the Notes in whole (but not in part) within 90 days
following the occurrence of such Tax Event at the Redemption Price. The
Redemption Price shall be paid prior to 12:00 noon, New York City time, on the
Tax Event Redemption Date, by check or wire transfer in immediately available
funds at such place and to such account as may be designated by each such
Holder.

            The Notes shall bear interest initially at a rate of 6-3/4% per
annum through and including the day immediately preceding the Reset Effective
Date, and at the Reset Rate thereafter until the principal hereof shall have
been paid or duly made available for payment and, to the extent permitted by
law, to pay interest, compounded quarterly, on any overdue principal and
premium, if any, through and including the day immediately preceding the Reset
Effective Date, and at the Reset Rate thereafter until August 17, 2006.

            The Notes shall not be entitled to any sinking fund.

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

            The Indenture restricts the ability of the Company to make certain
restricted payments or to merge or consolidate with another company or sell,
lease or convey all or


<PAGE>

substantially all of the Company's assets. These covenants are subject to the
covenant defeasance procedures outlined in the Indenture.

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

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

            As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note registrable in the Security
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company in any place where the principal of (and premium, if
any) and interest on this Note are payable, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

            The Notes are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to limitations therein set forth, Notes are exchangeable
for a like aggregate principal amount of Notes of a different authorized
denomination, as requested by the holder surrendering the same.

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

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


                                      -2-
<PAGE>

            All terms used in this Note which are defined in the Indenture or
the Warrant Agreement (as defined in the Indenture), shall have the meanings
assigned to them in the Indenture or the Warrant Agreement, as the case may be.

                               ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM-- as tenants in common        UNIF GIFT MIN ACT-- ______Custodian______
                                                          (Cust)         (Minor)

TEN ENT-- as tenants by the entireties        under Uniform Gifts to Minors
                                               Act____________________
                                                         (State)
JT TEN-- as joint tenants with rights
         of survivorship and not as
         tenants in common
Additional abbreviations may also be used though not on the above list.

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

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto (please
insert Social Security or other identifying number of assignee)

- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE
OF ASSIGNEE

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

- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing

- --------------------------------------------------------------------------------
agent to transfer said Security on the books of the Corporation, with full power
of substitution in the premises.

Dated:
                                         ---------------------------------------

                                         ---------------------------------------
                                         NOTICE: The signature to this
                                         assignment must correspond with the
                                         name as written upon the face of the
                                         within instrument in every particular
                                         without alteration or enlargement, or
                                         any change whatever.

                                                     Signature Guarantee:


                               SIGNATURE GUARANTEE

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Security Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Security
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.


                                      -3-
<PAGE>

                         [TO BE ATTACHED TO GLOBAL NOTES
                               AND PLEDGED NOTES]

                       SCHEDULE OF INCREASES OR DECREASES

  THE INITIAL PRINCIPAL AMOUNT OF THIS SENIOR NOTE DUE 2006 IS $_________. THE
                             FOLLOWING INCREASES OR
                        DECREASES IN THE [GLOBAL NOTE]*
                       [PLEDGED NOTE]* * HAVE BEEN MADE:

<TABLE>
<CAPTION>

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

                    AMOUNT OF       AMOUNT OF       PRINCIPAL
                   DECREASE IN     INCREASE IN      AMOUNT OF
                    PRINCIPAL       PRINCIPAL      SENIOR NOTE
                    AMOUNT OF       AMOUNT OF       DUE 2006
                   SENIOR NOTE     SENIOR NOTE    EVIDENCED BY
                    DUE 2006        DUE 2006       THE [GLOBAL
                  EVIDENCED BY    EVIDENCED BY       NOTE]*
                   THE [GLOBAL     THE [GLOBAL      [PLEDGED      SIGNATURE OF
                     NOTE]*          NOTE]*          NOTE]**       AUTHORIZED
                    [PLEDGED        [PLEDGED     FOLLOWING SUCH    OFFICER OF
                     NOTE]**         NOTE]**       DECREASE OR     TRUSTEE OR
      DATE                                          INCREASE        CUSTODIAN

- ---------------------------------------------------------------------------------
<S>               <C>            <C>             <C>              <C>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

- ---------------------------------------------------------------------------------
</TABLE>

- ----------
* Insert for Global Note only
** Insert for Definitive Note only

<PAGE>

                                 [ASSIGNMENT]**

FOR VALUE RECEIVED, the undersigned hereby assigns and transfers unto The Bank
of New York, as Collateral Agent, $460,000,000 in principal amount of the Senior
Notes due 2006 of Citizens Communications Company (the "Company") and all rights
thereunder, hereby irrevocably constituting and appointing
________________________________ attorney to transfer said Senior Notes due 2006
on the books of the Company, with full power of substitution in the premises.

Dated:                              The Chase Manhattan Bank, as Warrant Agent

                                    By: ____________________________
                                    Name:
                                    Title

                                          NOTICE: The signature to this
                                          assignment must correspond with the
                                          name as written upon the face of the
                                          within instrument in every particular
                                          without alteration or enlargement, or
                                          any change whatever.

                                                         Signature Guarantee:


                               SIGNATURE GUARANTEE

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirement of the registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.





- --------
** Insert for Definitive Note only
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>9
<FILENAME>a2052437zex-5_1.txt
<DESCRIPTION>EXHIBIT 5.1
<TEXT>

<PAGE>

                                                                     Exhibit 5.1


                                  June 19, 2001



Citizens Communications Company
3 High Ridge Park
Stamford, Connecticut  06905

Ladies and Gentlemen:

                  We have acted as special counsel to Citizens Communications
Company, a Delaware corporation (the "Company"), in connection with the sale by
the Company of:

                         (A) 18,400,000 6-3/4% equity units of the Company (the
             "Equity Units"). Each Equity Unit consists of (i) a stock warrant
             (each, a "Warrant" and collectively, the "Warrants") of the Company
             under which the holder is obligated to purchase from the Company on
             August 17, 2004, for an amount in cash equal to the stated amount
             per Equity Unit of $25, a number of shares of common stock, par
             value $0.25 per share, of the Company (the "Common Stock") and
             (ii) a senior note (each, a "Senior Note" and collectively, the
             "Senior Notes") maturing on August 17, 2006 and having an
             initial interest rate of 6-3/4% per annum payable quarterly in
             arrears on February 17, May 17, August 17, and November 17,
             beginning August 17, 2001, pursuant to the prospectus supplement
             dated June 13, 2001 to the prospectus dated May 9, 2001 forming
             part of the Registration Statement of the Company on Form S-3,
             File No. 333-58044, as amended by Amendment No. 1 thereto (as
             amended, the "Registration Statement"), filed with the Securities
             and Exchange Commission (the "Commission"); and

                         (B) 25,156,250 shares of Common Stock pursuant to the
             prospectus supplement dated June 13, 2001 to the prospectus dated
             May 9, 2001 forming part of the Registration Statement, filed with
             the Commission (such shares are referred to as the "New Common
             Stock").

                  This opinion letter is furnished in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of
1933, as amended.

                  In connection with this opinion letter, we have examined
originals or copies, certified or otherwise identified to our satisfaction, of:
(i) the Registration Statement; (ii) the
<PAGE>

Citizens Communications Company
June 19, 2001
Page 2


Restated Certificate of Incorporation of the Company as in effect on the date
hereof; (iii) the By-Laws of the Company as in effect on the date hereof; (iv)
resolutions adopted by the Board of Directors of the Company authorizing, among
other things, the filing of the Registration Statement and the issuance and sale
of the Equity Units and the component securities thereof and the issuance and
sale of the Common Stock; (v) the Warrant Agreement, dated as of June 19, 2001
(the "Warrant Agreement"), between the Company and The Chase Manhattan Bank, as
warrant agent (the "Warrant Agent"); (vi) the Senior Indenture, dated as of May
23, 2001, between the Company and The Chase Manhattan Bank, as indenture
trustee, as amended and supplemented by the Second Supplemental Indenture to the
Senior Indenture, dated as of June 19, 2001 (such indenture, as so amended and
supplemented, the "Indenture"), between the Company and The Chase Manhattan
Bank, as indenture trustee, relating to the Senior Notes; (vii) the Underwriting
Agreements dated June 13, 2001 among the Company and the underwriters named
therein; and (viii) the forms of the Equity Units, the Senior Notes, the
Treasury Equity Securities (as defined in the Warrant Agreement) and
certificates for Common Stock and specimens thereof. The Warrant Agreement and
the Indenture are collectively referred to in this opinion letter as the
"Transaction Documents." We have also examined originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company and
such agreements, certificates of pubic officials, certificates of officers or
other representatives of the Company and others, and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.

                  In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company, we have
assumed that such parties have the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and the validity and binding effect thereof. As to any
facts material to the opinions expressed herein that were not independently
established or verified, we have relied upon statements and representations of
officers and other representatives of the Company and others.

                  We are members of the Bar of the State of New York and the
foregoing opinions are limited to the laws of the State of New York customarily
applicable to transactions of the type contemplated by the Transaction
Documents, the Federal laws of the United States and the General Corporation Law
of the State of Delaware.

                  Based upon our examination as described above, and subject to
the assumptions and qualifications stated herein, we are of the opinion that:
<PAGE>

Citizens Communications Company
June 19, 2001
Page 3


                           1.       The Senior Notes were legally issued and
                                    constitute binding obligations of the
                                    Company, enforceable against the Company in
                                    accordance with their terms and are entitled
                                    to the benefits of the Indenture.

                           2.       The Warrants and the Equity Units constitute
                                    and, when substituted and exchanged for
                                    Equity Units in accordance with the terms of
                                    the Transaction Documents, the Treasury
                                    Equity Units will constitute, binding
                                    obligations of the Company, enforceable
                                    against the Company in accordance with their
                                    terms. The Warrants and the Equity Units
                                    are, and the Treasury Equity Units, when
                                    substituted and exchanged for Equity Units
                                    in accordance with the terms of the
                                    Transaction Documents will be, legally
                                    issued, fully paid and non-assessable.

                           3.       The shares of Common Stock to be issued and
                                    sold by the Company upon settlement of the
                                    Warrants have been duly and validly
                                    authorized and reserved for issuance, and
                                    such shares of Common Stock, when issued and
                                    delivered in accordance with the provisions
                                    of the Warrant Agreement, will be legally
                                    issued, fully paid and non-assessable.

                           4.       The shares of New Common Stock were duly and
                                    validly authorized, have been legally issued
                                    and are fully paid and non-assessable.

                  Our opinions in paragraphs 1 and 2 above as to enforceability
may be limited by (a) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally, (b) an implied covenant of good
faith and fair dealing and (c) general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in equity).

                  We hereby consent to the filing of this opinion letter with
the Commission as an exhibit to a Current Report of the Company on Form 8-K. We
also consent to the reference to our firm under the caption "Legal Matters" in
the Registration Statement. In giving this consent, we do not thereby admit that
we are included in 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 Commission.

                                                     Very truly yours,

                                                     /s/  Winston & Strawn
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
