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<SEC-DOCUMENT>/in/edgar/work/20000811/0000916641-00-001109/0000916641-00-001109.txt : 20000921
<SEC-HEADER>0000916641-00-001109.hdr.sgml : 20000921
ACCESSION NUMBER:		0000916641-00-001109
CONFORMED SUBMISSION TYPE:	S-3
PUBLIC DOCUMENT COUNT:		8
FILED AS OF DATE:		20000811

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			UNIVERSAL CORP /VA/
		CENTRAL INDEX KEY:			0000102037
		STANDARD INDUSTRIAL CLASSIFICATION:	 [5150
]		IRS NUMBER:				540414210
		STATE OF INCORPORATION:			VA
		FISCAL YEAR END:			0630
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		S-3
			SEC ACT:		
			SEC FILE NUMBER:	333-43522
			FILM NUMBER:		692796
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		1501 NORTH HAMILTON STREET
				STREET 2:		PO BOX 25099
				CITY:			RICHMOND
				STATE:			VA
				ZIP:			23230
				BUSINESS PHONE:		8043599311
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		PO BOX 25099
					CITY:			RICHMOND
					STATE:			VA
					ZIP:			23260
</MAIL-ADDRESS>

					FORMER COMPANY:	
						FORMER CONFORMED NAME:	UNIVERSAL LEAF TOBACCO CO INC
						DATE OF NAME CHANGE:	19880314
</FORMER-COMPANY>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>REGISTRATION STATEMENT
<TEXT>

<PAGE>

    As filed with the Securities and Exchange Commission on August 11, 2000
                                                      Registration No. 333-

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

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               ----------------
                                    Form S-3
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933

                               ----------------
                             Universal Corporation
             (Exact name of Registrant as specified in its charter)

                               ----------------
<TABLE>
 <S>                            <C>                           <C>
   Commonwealth of Virginia                 5150                       54-0414210
 (State or other jurisdiction   (Primary Standard Industrial        (I.R.S. Employer
     of incorporation or         Classification Code Number)       Identification No.)
        organization)
</TABLE>

                            1501 N. Hamilton Street
                            Richmond, Virginia 23230
                                 (804) 359-9311
  (Address, including zip code, and telephone number, including area code, of
                   Registrant's principal executive offices)

                               ----------------
                             George C. Freeman, III
                              Assistant Secretary
    Universal Corporation, 1501 N. Hamilton Street, Richmond, Virginia 23230
                                 (804) 359-9311
 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)

                                with copies to:
<TABLE>
<S>                                            <C>
         Robert H. Craft, Jr., Esq.                         Bart Friedman, Esq.
             Sullivan & Cromwell                          Cahill Gordon & Reindel
       1701 Pennsylvania Avenue, N.W.                          80 Pine Street
           Washington, D.C. 20006                         New York, New York 10005
               (202) 956-7500                                  (212) 701-3000
</TABLE>

                               ----------------
   Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
   If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
   If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
   If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
   If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
   If delivery of this prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]

                               ----------------
                        CALCULATION OF REGISTRATION FEE

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                       Proposed Maximum
 Title of Each Class of               Proposed Maximum    Aggregate
    Securities to be     Amount to be  Offering Price      Offering         Amount of
       Registered         Registered    per Unit(1)        Price(1)     Registration Fee
- ----------------------------------------------------------------------------------------
<S>                      <C>          <C>              <C>              <C>
Debt Securities........  $400,000,000     100%(2)      $400,000,000(2)      $105,600
- ----------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(1) Estimated solely for purposes of calculating the registration fee.
(2) Plus accrued interest, if any.

                               ----------------
   The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may be     +
+changed. These securities may not be sold until the registration statement    +
+filed with the Securities and Exchange Commission is effective. This          +
+preliminary prospectus is not an offer to sell nor is it soliciting an offer  +
+to buy these securities in any jurisdiction where the offer or sale is not    +
+permitted.                                                                    +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                  SUBJECT TO COMPLETION DATED AUGUST 11, 2000

PROSPECTUS

                                  $400,000,000

                        [LOGO OF UNIVERSAL CORPORATION]

                                Debt Securities

  Universal Corporation from time to time may offer to sell debt securities
either individually or in units. The total amount of the securities will have
an initial aggregate offering price of up to $400,000,000, or the equivalent
amount in other currencies, currency units or composite currencies, although we
may increase this amount in the future.

  The debt securities will be unsecured and will rank senior in right of
payment to all of Universal Corporation's subordinated debt.

  Universal Corporation may offer and sell these securities to or through one
or more underwriters, dealers and/or agents on a continuous or delayed basis.
The names of such underwriters, dealers and/or agents and any applicable
commissions or discounts will be described in a supplement to this prospectus.

  This prospectus describes some of the general terms that may apply to these
securities and the general manner in which they may be offered. The specific
terms of any securities to be offered, and the specific manner in which they
may be offered, will be described in a supplement to this prospectus.

  Investing in the debt securities involves risks. See "Risk Factors" beginning
on page 6.

  Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.

                           Prospectus dated   , 2000.
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                        <C>
AVAILABLE INFORMATION.....................................................   3

PROSPECTUS SUMMARY........................................................   4

RISK FACTORS..............................................................   6

RATIO OF EARNINGS TO FIXED CHARGES........................................   6

USE OF PROCEEDS...........................................................   7

DESCRIPTION OF DEBT SECURITIES WE MAY OFFER...............................   7

LEGAL OWNERSHIP AND BOOK-ENTRY ISSUANCE...................................  25

CONSIDERATIONS RELATING TO SECURITIES ISSUED IN BEARER FORM...............  30

CONSIDERATIONS RELATING TO INDEXED SECURITIES.............................  34

CONSIDERATIONS RELATING TO SECURITIES LINKED TO A FOREIGN CURRENCY........  36

UNITED STATES TAXATION....................................................  38

PLAN OF DISTRIBUTION......................................................  50

VALIDITY OF THE SECURITIES................................................  52

EXPERTS...................................................................  52

CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM
 ACT OF 1995..............................................................  52
</TABLE>

                                       2
<PAGE>

                             AVAILABLE INFORMATION

   Universal Corporation is required to file annual, quarterly and current
reports, proxy statements and other information with the SEC. You may read and
copy any documents filed by us at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. Our filings with the SEC are
also available to the public through the SEC's Internet site at
http://www.sec.gov and through the New York Stock Exchange, 20 Broad Street,
New York, New York 10005, on which our common stock is listed.

   We have filed a registration statement on Form S-3 with the SEC relating to
the securities covered by this prospectus. This prospectus is a part of that
registration statement and does not contain all of the information in the
registration statement. Whenever a reference is made in this prospectus to a
contract or other document of Universal Corporation, please be aware that the
reference is not necessarily complete and that you should refer to the exhibits
that are a part of the registration statement for a copy of the contract or
other document. You may review a copy of the registration statement at the
SEC's public reference room in Washington, D.C., as well as through the SEC's
Internet site.

   The SEC's rules allow us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document. Any information referred to in this way is
considered part of this prospectus from the date of filing those documents. Any
reports filed with the SEC after the date of this prospectus and before the
date that the offering of the securities by means of this prospectus is
terminated will automatically update and, where applicable, supersede any
information contained in this prospectus or incorporated by reference in this
prospectus.

   Universal Corporation incorporates by reference into this prospectus the
following documents or information filed with the SEC:

     (1) our Annual Report on Form 10-K for the fiscal year ended June
  30,1999;

     (2) our Quarterly Reports on Form 10-Q for the quarters ended September
  30, 1999, December 31, 1999 and March 31, 2000;

     (3) our Current Reports on Form 8-K, dated August 5, 1999, September 20,
  1999, October 26, 1999, December 2, 1999, February 3, 2000, February 11,
  2000, February 24, 2000, March 17, 2000, March 29, 2000, May 4, 2000, July
  25, 2000 and August 10, 2000 (as amended August 11, 2000); and

     (4) All documents filed by Universal Corporation pursuant to Sections
  13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the
  date of this prospectus and prior to the termination of this offering.

   We will provide without charge to each person, including any beneficial
owner, to whom this prospectus is delivered, upon his or her written or oral
request, a copy of any or all documents (excluding exhibits unless they are
specifically incorporated by reference into such documents) referred to above
that have been or may be incorporated by reference into this prospectus.
Requests for these copies should be directed to Karen M.L. Whelan, Vice
President and Treasurer, Universal Corporation, 1501 North Hamilton Street,
Richmond, Virginia 23230, telephone (804) 359-9311.

                                       3
<PAGE>

                               PROSPECTUS SUMMARY

   This summary highlights information contained elsewhere in this prospectus
or incorporated by reference into this prospectus as further described above
under "Available Information". This summary does not contain all the
information that you should consider before investing in the securities being
offered by this prospectus. You should read the entire prospectus, the
documents incorporated by reference into this prospectus and the prospectus
supplement relating to the securities that you propose to buy carefully,
especially any description of investment risks that we may include in the
prospectus supplement.

                             Universal Corporation

   We are, through our subsidiaries, the world's largest independent leaf
tobacco merchant, as well as the leading lumber and building products
distributor in Holland. In addition, we are engaged in a number of value-added
agri-product enterprises. Since our founding in 1918, tobacco operations have
been our principal focus. For the fiscal year ended June 30, 1999, our tobacco
operations accounted for 74% of revenues and 85% of operating profits. During
that period, our agri-products operations and our lumber and building products
operations each accounted for 13% of revenues, and 6% and 9% of operating
profits, respectively.

   Universal Corporation was incorporated under the laws of the Commonwealth of
Virginia in 1918. We operate in over 33 countries and employ over 30,000
people. Our principal executive offices are located at 1501 North Hamilton
Street, Richmond, Virginia 23230, telephone (804) 359-9311.

                         The Securities We Are Offering

Debt Securities

   Our debt securities will be senior in right of payment. For any particular
debt series we offer, the applicable prospectus supplement will describe the
specific designation; the aggregate principal or face amount and the purchase
price; the stated maturity; the redemption terms, if any; the rate or manner of
calculating the rate and the payment dates for interest, if any; the amount or
manner of calculating the amount payable at maturity and whether that amount
may be paid by delivering cash, securities or other property; and any other
specific terms. We will issue the debt securities under an indenture between us
and The Chase Manhattan Bank (formerly known as Chemical Bank), as trustee.

Book-Entry, Registered Form

   We will issue the securities in book-entry form, unless we specify otherwise
in the applicable prospectus supplement, through one or more depositaries, such
as The Depository Trust Company, Euroclear or Clearstream, Luxembourg, as
described in the applicable prospectus supplement. Each sale of a security in
book-entry form will settle in immediately available funds through the
depositary, unless otherwise stated. Unless the applicable prospectus
supplement says otherwise, we will issue the securities only in registered
form, without coupons.

Payment Currencies

   Amounts payable in respect of the securities, including the purchase price,
will be payable in United States dollars unless the applicable prospectus
supplement says otherwise.

                                       4
<PAGE>


Listing

   If any securities are to be listed or quoted on a securities exchange or
quotation system, the applicable prospectus supplement will say so.

Manner of Offering

   When we issue the securities, we may offer them for sale to or through
underwriters, dealers and agents or directly to purchasers. The applicable
prospectus supplement will include any required information about the firms we
use and the discounts or commissions we may pay them for their services.

                                       5
<PAGE>

                                  RISK FACTORS

   Our financial results are affected by a number of risk factors that directly
or indirectly affect the tobacco and non-tobacco operations of our business.
Some of the factors that may affect our results of operations include:

Tobacco Business

<TABLE>
<CAPTION>
General                       Governmental                  Financial Factors

<S>                           <C>                           <C>
Competition; Reliance on      Government Efforts to Reduce  Extensions of Credit
Significant Customers         Tobacco Consumption

Market Balance                Political Uncertainties in    Fluctuations in Foreign
                              Foreign Tobacco Operations    Currency

Methods of Purchasing         United States Trade Policies  Exchange Rates
Tobacco

Timing of Customer Shipments  Tax Matters                   Interest Rates

                              Health Issues; Public
                              Sentiment; Industry
                              Litigation
</TABLE>

Non-tobacco Business

<TABLE>
<CAPTION>
Lumber and Building Products  Agri-Products

<S>                           <C>
Translation of Foreign        Crop Risks
Currencies

Weather and Other Seasonal    Market Balance
Factors

Local Economies               Governmental Factors

Prices of Lumber Products
and Other Industry Factors
</TABLE>

   For a more complete description of these factors, you should refer to our
Annual Report on Form 10-K for the fiscal year ended June 30, 1999 under the
heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Factors That May Affect Future Results" and our
Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K which are
listed above under "Available Information," all of which are incorporated by
reference into this prospectus.

                       RATIO OF EARNINGS TO FIXED CHARGES

   Universal Corporation's consolidated ratios of earnings to fixed charges are
incorporated by reference to our (i) Quarterly Report on Form 10-Q for the
quarter ended March 31, 2000 or (ii) subsequent to the date of this prospectus,
our most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as
the case may be. See "Available Information" above for information about how to
obtain a copy of these reports.

                                       6
<PAGE>

                                USE OF PROCEEDS

   Except as may be set forth in a prospectus supplement, we intend to use the
net proceeds from the sale of debt securities for general corporate purposes,
which may include the repayment of indebtedness, capital expenditures, possible
acquisitions and working capital. Pending such use, the net proceeds may be
temporarily invested.

                  DESCRIPTION OF DEBT SECURITIES WE MAY OFFER

    Please note that in this section entitled "Description of Debt Securities
 We May Offer", references to Universal Corporation, "we", "our" and "us"
 refer only to Universal Corporation and not to its consolidated
 subsidiaries. Also, in this section, references to "holders" mean those who
 own debt securities registered in their own names, on the books that we or
 the trustee maintain for this purpose, and not those who own beneficial
 interests in debt securities registered in street name or in debt securities
 issued in book-entry form through one or more depositaries. Owners of
 beneficial interests in the debt securities should read the section entitled
 "Legal Ownership and Book-Entry Issuance".


Debt Securities Will Be Senior, Unsecured Obligations of Universal Corporation

   We will issue senior debt securities. The debt securities will not be
secured by any property or assets of Universal Corporation or its subsidiaries.
Thus, by owning a debt security, you are one of our unsecured creditors.

   The debt securities and, in the case of debt securities in bearer form, any
coupons to these securities, will constitute part of our senior debt, will be
issued under the indenture and will rank equally and ratably with all of our
other unsecured and senior debt.

   When we use the terms "debt security" or "debt securities" in this
description, we mean the senior debt securities being offered by this
prospectus and the applicable prospectus supplement.

The Indenture

   The debt securities are governed by a document called an indenture. The
indenture is a contract between us and The Chase Manhattan Bank (formerly known
as Chemical Bank), which will initially act as trustee.

   The trustee has two main roles:

  . First, the trustee can enforce your rights against us if we default.
    There are some limitations on the extent to which the trustee can act on
    your behalf, which we describe later under "--Default, Remedies and
    Waiver of Default".

  . Second, the trustee performs administrative duties for us, such as
    sending you interest payments and notices.

See "--Our Relationship With the Trustee" below for more information about the
trustee.

We May Issue Many Series of Debt Securities

   We may issue as many distinct series of debt securities under the indenture
as we wish. This section summarizes terms of the securities that apply
generally to all series. In addition to issuing debt securities with terms
different from those of debt securities previously issued under the indenture,
we may also "reopen" a previous issue of a series of debt securities and issue
additional debt securities of that series. Most of the

                                       7
<PAGE>

financial and other specific terms of your series will be described in the
prospectus supplement to be attached to the front of this prospectus. Those
terms may vary from the terms described here.

    As you read this section, please remember that the specific terms of your
 debt security as described in your prospectus supplement will supplement
 and, if applicable, may modify or replace the general terms described in
 this section. If there are any differences between your prospectus
 supplement and this prospectus, your prospectus supplement will control.
 Thus, the statements we make in this section may not apply to your debt
 security.


   When we refer to a series of debt securities, we mean a series issued under
the indenture. When we refer to your prospectus supplement, we mean the
prospectus supplement describing the specific terms of the debt security you
purchase. The terms used in your prospectus supplement will have the meanings
described in this prospectus, unless otherwise specified.

Amounts That We May Issue

   The indenture does not limit the aggregate amount of debt securities that we
may issue or the number of series or the aggregate amount of any particular
series. We may issue debt securities and other securities in amounts that
exceed the total amount specified on the cover of this prospectus, at any time
without your consent and without notifying you.

   The indenture and the debt securities do not limit our ability to incur
other indebtedness or to issue other securities. Also, we are not subject to
financial or similar restrictions by the terms of the debt securities, except
as described under "--Restriction on Liens" and "--Restrictions on Sale and
Leaseback Transactions" below.

Principal Amount, Stated Maturity and Maturity

   The principal amount of a debt security means the principal amount payable
at its stated maturity, unless that amount is not determinable, in which case
the principal amount of a debt security is its face amount. Any debt securities
owned by us or any of our affiliates are not deemed to be outstanding.

   The term "stated maturity" with respect to your debt security means the day
on which the principal amount of your debt security is scheduled to become due.
The principal may become due sooner, by reason of redemption or acceleration
after a default or otherwise in accordance with the terms of the debt security.
The day on which the principal actually becomes due, whether at the stated
maturity or earlier, is called the maturity date.

   We also use the terms "stated maturity" and "maturity" to refer to the days
when other payments become due. For example, we may refer to a regular interest
payment date when an installment of interest is scheduled to become due as the
"stated maturity" of that installment.

We Are a Holding Company

   Because our assets consist principally of interests in the subsidiaries
through which we conduct our businesses, our cash flow and our consequent
ability to service our debt, including the debt securities, are largely
dependent upon the cash flow and earnings of our subsidiaries, including
certain dividends we receive from some of these subsidiaries. Since we also
guarantee many of the obligations of our subsidiaries, any liability we may
incur for our subsidiaries' obligations could reduce our assets that are
available to satisfy our direct creditors, including investors in the debt
securities. Additionally, our right to participate as an equity holder in any
distribution of assets of any of our subsidiaries upon the subsidiary's
liquidation or otherwise, and thus the ability of our security holders to
benefit from the distribution, is junior to creditors of the subsidiary, except
to the extent that any claims we may have as a creditor of the subsidiary are
recognized.

                                       8
<PAGE>

This Section Is Only a Summary

   The indenture and its associated documents, including your debt security,
contain the full legal text of the matters described in this section and your
prospectus supplement. We have filed a copy of the indenture with the SEC as an
exhibit to our registration statement. See "Available Information" above for
information on how to obtain a copy.

   This section and your prospectus supplement summarize material terms of the
indenture and your debt security. They do not, however, describe every aspect
of the indenture and your debt security. For example, in this section and your
prospectus supplement, we use terms that have been given special meaning in the
indenture, but we describe the meaning for only the more important of those
terms.

Governing Law

   The indenture and the debt securities will be governed by New York law.

Currency of Debt Securities

   Amounts that become due and payable on your debt security may be payable in
a currency, composite currency, basket of currencies or currency unit or units
specified in your prospectus supplement. We refer to this currency, composite
currency, basket of currencies or currency unit or units as a "specified
currency". The specified currency for your debt security may be Euro, British
pounds Sterling, Swiss Francs, Japanese yen, U.S. dollars or other specified
currency as specified in your prospectus supplement. Some debt securities may
have different specified currencies for principal and interest. You will have
to pay for your debt securities by delivering the requisite amount of the
specified currency for the principal to an underwriter or dealer that we name
in the prospectus supplement applicable to your debt security, unless other
arrangements have been made between you and us or you and that dealer. We will
make payments on your debt securities in the specified currency, except as
described below in "--Payment Mechanics for Debt Securities in Registered
Form". See "Considerations Relating to Securities Linked to a Foreign Currency"
for more information about risks of investing in debt securities of this kind.

Form of Debt Securities

   We will issue each debt security in book-entry form only, unless we specify
otherwise in the applicable prospectus supplement. Debt securities in book-
entry form will be represented by a global security registered in the name of a
depositary, which will be the holder of all the debt securities represented by
the global security. Those who own beneficial interests in a global debt
security will do so through participants in the depositary's securities
clearance system, and the rights of these indirect owners will be governed
solely by the applicable procedures of the depositary and its participants. We
describe book-entry securities below under "Legal Ownership and Book-Entry
Issuance".

   In addition, we will generally issue each debt security in registered form,
without coupons, unless we specify otherwise in the prospectus supplement
applicable to your debt security. If we issue a debt security in bearer form,
the provisions described below under "Considerations Relating to Securities
Issued in Bearer Form" would apply to that security. As we note in that
section, some of the features of the debt securities that we describe in this
prospectus may not apply to bearer debt securities.

Types of Debt Securities

   We may issue any of the following three types of senior debt securities:

 Fixed Rate Debt Securities

   A debt security of this type will bear interest at a fixed rate described in
the applicable prospectus supplement. This type includes zero coupon debt
securities, which bear no interest and are instead issued at a

                                       9
<PAGE>

price lower than the principal amount. See "--Original Issue Discount Debt
Securities" below for more information about zero coupon and other original
issue discount debt securities.

   Each fixed rate debt security, except any zero coupon debt security, will
bear interest from its original issue date or from the most recent date to
which interest on the debt security has been paid or made available for
payment. Interest will accrue on the principal of a fixed rate debt security at
the fixed yearly rate stated in the applicable prospectus supplement, until the
principal is paid or made available for payment. Each payment of interest due
on an interest payment date or the date of maturity will include interest
accrued from and including the last date to which interest has been paid, or
made available for payment, or from the issue date if none has been paid, or
made available for payment, to but excluding the interest payment date or the
date of maturity. We will compute interest on fixed rate debt securities on the
basis of a 360-day year of twelve 30-day months. We will pay interest on each
interest payment date and at maturity as described below under "--Payment
Mechanics for Debt Securities in Registered Form".

 Floating Rate Debt Securities

   A debt security of this type will bear interest at rates that are determined
by reference to an interest rate formula. In some cases, the rates may also be
adjusted by adding or subtracting a spread or multiplying by a spread
multiplier and may be subject to a minimum rate or a maximum rate. If your debt
security is a floating rate debt security, the formula and any adjustments that
apply to the interest rate will be specified in the prospectus supplement
applicable to your debt security.

   Each floating rate debt security will bear interest from its original issue
date or from the most recent date to which interest on the debt security has
been paid or made available for payment. Interest will accrue on the principal
of a floating rate debt security at the yearly rate determined according to the
interest rate formula stated in the applicable prospectus supplement, until the
principal is paid or made available for payment. We will pay interest on each
interest payment date and at maturity as described below under "--Payment
Mechanics for Debt Securities in Registered Form".

   Calculation of Interest. Calculations relating to floating rate debt
securities will be made by the calculation agent, an institution that we
appoint as our agent for this purpose. The prospectus supplement for a
particular floating rate debt security will name the institution that we have
appointed to act as the calculation agent for that debt security as of its
original issue date. We may appoint a different institution to serve as
calculation agent from time to time after the original issue date of the debt
security without your consent and without notifying you of the change.

   For each floating rate debt security, the calculation agent will determine,
on the corresponding interest calculation or determination date, as described
in the applicable prospectus supplement, the interest rate that takes effect on
each interest reset date. In addition, the calculation agent will calculate the
amount of interest that has accrued during each interest period, i.e., the
period from and including the original issue date, or the last date to which
interest has been paid or made available for payment, to but excluding the
payment date. For each interest period, the calculation agent will calculate
the amount of accrued interest by multiplying the face amount of the floating
rate debt security by an accrued interest factor for the interest period. This
factor will equal the sum of the interest factors calculated for each day
during the interest period. The interest factor for each day will be expressed
as a decimal and will be calculated by dividing the interest rate, also
expressed as a decimal, applicable to that day by 360 or by the actual number
of days in the year, as specified in the applicable prospectus supplement.

   Upon the request of the holder of any floating rate debt security, the
calculation agent will provide for that debt security the interest rate then in
effect and, if determined, the interest rate that will become effective on the
next interest reset date. The calculation agent's determination of any interest
rate, and its calculation of the amount of interest for any interest period,
will be final and binding in the absence of manifest error.

                                       10
<PAGE>

   All percentages resulting from any calculation relating to a debt security
will be rounded upward or downward, as appropriate, to the next higher or lower
one hundred-thousandth of a percentage point, e.g., 9.876541% (or .09876541)
being rounded down to 9.87654% (or .0987654) and 9.876545% (or .09876545) being
rounded up to 9.87655% (or .0987655). All amounts used in or resulting from any
calculation relating to a floating rate debt security will be rounded upward or
downward, as appropriate, to the nearest cent, in the case of U.S. dollars, or
to the nearest corresponding hundredth of a unit, in the case of a currency
other than U.S. dollars, with one-half cent or one-half of a corresponding
hundredth of a unit or more being rounded upward.

   In determining the interest rate that applies to a floating rate debt
security during a particular interest period, the calculation agent may obtain
rate quotes from various banks or dealers active in the relevant market, as
described in the applicable prospectus supplement. Those reference banks and
dealers may include the calculation agent itself and its affiliates, as well as
any underwriter, dealer or agent participating in the distribution of the
relevant floating rate debt securities and its affiliates.

 Indexed Debt Securities

   A debt security of this type provides that the principal amount payable at
its maturity, and/or the amount of interest payable on an interest payment
date, will be determined by reference to

  . securities of one or more issuers;

  . one or more currencies;

  . one or more commodities;

  . any other financial, economic or other measure or instrument, including
    the occurrence or non-occurrence of any event or circumstance; and/or

  . one or more indices or baskets of the items described above.

   If you are a holder of an indexed debt security, you may receive a principal
amount at maturity that is greater than or less than the face amount of your
debt security depending upon the value of the applicable index at maturity. The
value of the applicable index will fluctuate over time.

   An indexed debt security may provide either for cash settlement or for
physical settlement by delivery of the underlying property or another property
of the type listed above. An indexed debt security may also provide that the
form of settlement may be determined at our option or at the holder's option.
Some indexed debt securities may be exchangeable, at our option or the holder's
option, for securities of an issuer other than Universal Corporation.

   If you purchase an indexed debt security, the prospectus supplement
applicable to your debt security will include information about the relevant
index, about how amounts that are to become payable will be determined by
reference to the price or value of that index and the terms on which the
security may be settled physically or in cash. The prospectus supplement will
also identify the calculation agent who will calculate the amounts payable with
respect to the indexed debt security and may exercise significant discretion in
doing so. See "Considerations Relating to Indexed Securities" for more
information about risks of investing in debt securities of this type.

Original Issue Discount Debt Securities

   A fixed rate debt security, a floating rate debt security or an indexed debt
security may be an original issue discount debt security. A debt security of
this type is issued at a price lower than its principal amount and provides
that, upon redemption or acceleration of its maturity, an amount less than its
principal amount will be payable.

                                       11
<PAGE>

Information in the Prospectus Supplement

   Your prospectus supplement will describe the specific terms of your debt
security, which will include some or all of the following:

  . any limit on the total principal amount of the debt securities of the
    same series;

  . the stated maturity;

  . the specified currency or currencies for principal and interest, if not
    U.S. dollars;

  . the price at which we originally issue your debt security, expressed as a
    percentage of the principal amount, and the original issue date;

  . any provisions for "reopening" the offering at a later time to offer debt
    securities having the same terms as your debt security;

  . whether your debt security is a fixed rate debt security, a floating rate
    debt security or an indexed debt security and also whether it is an
    original issue discount debt security;

  . if your debt security is a fixed rate debt security, the annual rate at
    which your debt security will bear interest, if any, and the interest
    payment dates;

  . if your debt security is a floating rate debt security, the interest rate
    basis; any applicable index currency or maturity, spread or spread
    multiplier or initial, maximum or minimum rate; the interest reset,
    determination, calculation and payment dates; the day count used to
    calculate interest payments for any period; and the calculation agent;

  . if your debt security is an indexed debt security, the principal amount,
    if any, we will pay you at maturity, the amount of interest, if any, we
    will pay you on an interest payment date or the formula we will use to
    calculate these amounts, if any, and the terms on which your debt
    security will be exchangeable for or payable in cash, securities or other
    property;

  . if your debt security is also an original issue discount debt security,
    the yield to maturity;

  . if applicable, the circumstances under which your debt security may be
    redeemed at our option or repaid at your option before the stated
    maturity and other relevant terms such as the redemption commencement
    date, repayment date(s), redemption price(s) and redemption period(s);

  . the authorized denominations, if other than $1,000 and integral multiples
    of $1,000;

  . the depositary for your debt security, if other than DTC, and any
    circumstances under which you may request securities in non-global form,
    if we choose not to issue your debt security in book-entry form only;

  . if applicable, the circumstances under which we will pay additional
    amounts on any debt securities held by a person who is not a United
    States person for tax purposes and whether we can redeem the debt
    securities if we have to pay additional amounts;

  . if your debt security will be issued in bearer form, any special
    provisions relating to bearer securities that are not addressed in this
    prospectus;

  . any specific U.S. federal income tax consideration relating to the debt
    securities not addressed in this prospectus;

  . the names and duties of any co-trustees, depositaries, authenticating
    agents, paying agents, transfer agents or registrars for the series of
    debt securities; and

  . any other terms of your debt security that are consistent with the
    provisions of the indenture, which other terms could be different from
    those described in this prospectus.

                                       12
<PAGE>

   The prospectus supplement applicable to your debt security will summarize
specific financial and other terms of the debt security, while this prospectus
describes terms that apply generally to all the debt securities. Consequently,
the terms described in the prospectus supplement applicable to your debt
security will supplement those described in this prospectus and, if the terms
described there are inconsistent with those described here, the terms described
there will be controlling. The terms used in the prospectus supplement
applicable to your debt security have the meanings described in this
prospectus, unless otherwise specified.

Redemption and Repayment

   Unless otherwise indicated in the prospectus supplement applicable to your
debt security, your debt security will not be entitled to the benefit of any
sinking fund. This means, we will not deposit money on a regular basis into any
separate custodial account to repay your debt securities. In addition, we will
not be entitled to redeem your debt security before its stated maturity unless
the prospectus supplement applicable to your debt security specifies a
redemption commencement date. You will not be entitled to require us to buy
your debt security from you before its stated maturity unless the prospectus
supplement applicable to your debt security specifies one or more repayment
dates.

   If the prospectus supplement applicable to your debt security specifies a
redemption commencement date or a repayment date, it will also specify one or
more redemption prices or repayment prices, which may be expressed as a
percentage of the principal amount of your debt security. It may also specify
one or more redemption periods during which the redemption prices relating to a
redemption of debt securities during those periods will apply.

   If the prospectus supplement applicable to your debt security specifies a
redemption commencement date, your debt security will be redeemable at our
option at any time on or after that date. If we redeem your debt security, we
will do so at the specified redemption price, together with interest accrued to
the redemption date. If different prices are specified for different redemption
periods, the price we pay will be the price that applies to the redemption
period during which your debt security is redeemed.

   If the prospectus supplement applicable to your debt security specifies a
repayment date, your debt security will be repayable at your option on the
specified repayment date at the specified repayment price, together with
interest accrued to the repayment date.

   If we exercise an option to redeem any debt security, we will give to the
trustee and you written notice of the redemption date and the principal amount
of the debt security to be redeemed, not less than 30 days nor more than 60
days before the scheduled redemption date. We will give the notice in the
manner described below in "--Notices".

   If a debt security represented by a global debt security is subject to
repayment at your option, the depositary or its nominee, as the holder, will be
the only person that can exercise the right to repayment. Any indirect owners
who own beneficial interests in the global debt security and wish to exercise a
repayment right must give proper and timely instructions to their banks or
brokers through which they hold their interests, requesting that they notify
the depositary to exercise the repayment right on their behalf. Different firms
have different deadlines for accepting instructions from their customers, and
you should take care to act promptly enough to ensure that your request is
given effect by the depositary before the applicable deadline for exercise.

    Street name and other indirect owners should contact their banks or
 brokers for information about how to exercise a repayment right in a timely
 manner.


   We or our affiliates may purchase debt securities from investors who are
willing to sell from time to time, either in the open market at prevailing
prices or in private transactions at negotiated prices. Debt securities that we
or they purchase may, at our discretion, be held, resold or canceled.

                                       13
<PAGE>

Mergers and Similar Transactions

   We are generally permitted to merge or consolidate with another corporation.
We are also permitted to sell substantially all of our assets to another
corporation or other entity. With regard to any series of debt securities,
however, we may not take any of these actions unless all the following
conditions are met:

  . If the successor entity in the transaction is not Universal Corporation,
    the successor entity must be organized as a corporation, organized and
    existing under the laws of the United States and must expressly assume
    our obligations under the debt securities of that series and the
    indenture.

  . Immediately after the transaction, no default under the debt securities
    of that series has occurred and is continuing. For this purpose, "default
    under the debt securities of that series" means an event of default with
    respect to that series or any event that would be an event of default
    with respect to that series if the requirements for giving us default
    notice and for our default having to continue for a specific period of
    time were disregarded. We describe these matters below under "--Default,
    Remedies and Waiver of Default".

  . If, as a result of such transaction, Universal Corporation assets or
    property would become encumbered in a manner not permitted under the
    indenture, then the successor entity must take steps to secure the debt
    securities at least equally or ratably with all other indebtedness
    secured thereby.

  . After the transaction, Universal Corporation must deliver to the trustee
    a legal opinion and an officer's certificate certifying compliance with
    the provisions of the indenture.

   If the conditions described above are satisfied with respect to the debt
securities of any series, we will not need to obtain the approval of the
holders of those debt securities in order to merge or consolidate or to sell
all or substantially all our assets. Also, these conditions will apply only if
we wish to merge or consolidate with another entity or sell all or
substantially all our assets. We will not need to satisfy these conditions if
we enter into other types of transactions, including any transaction in which
we acquire the stock or assets of another entity, any transaction that involves
a change of control of Universal Corporation but in which we do not merge or
consolidate and any transaction in which we sell less than substantially all of
our assets.

Restriction on Liens

   In the indenture, we promise, with respect to each series of debt
securities, that we will not (nor will we permit our most important operating
subsidiaries, including Universal Leaf Tobacco Company, Incorporated, to)
create or allow any mortgage, lien or encumbrance of any kind upon any of the
capital stock or certain important property of these subsidiaries, unless we
have concurrently secured all outstanding debt securities issued under the
indenture equally and ratably with the obligations that we have secured by
those mortgages, liens or encumbrances. There are, however, some exceptions to
this restriction that are fully set forth in the indenture and that apply,
among other things, to some pre-existing liens, liens between our subsidiaries,
liens incurred to enable certain acquisitions, construction, improvement or
repairs on property, some liens on assets in favor of federal, state or foreign
governmental entities, some statutory or court ordered liens, some tax liens,
some liens securing obligations incurred in the ordinary course of business for
sums not yet due and liens created to refinance or extend obligations secured
by any of the liens described above.

Restrictions on Sale and Leaseback Transactions

   In the indenture, we also promise, with respect to each series of debt
securities, that we will not (nor will we permit our most important operating
subsidiaries, including Universal Leaf Tobacco Company, Incorporated, to) sell
or transfer certain important property more than 120 days after such property
is put into full operation, and to thereafter lease back that property for a
term of more than three years to use for substantially the same purpose as the
property being sold or transferred. There are, however, some exceptions

                                       14
<PAGE>

to this restriction that are fully set forth in the indenture and that apply,
among other things, to (i) some inter-company sale and leaseback transactions,
(ii) situations where a lien would be permitted under the provisions of "--
Restrictions on Liens" above in an amount equal to the value of such sale and
leaseback transaction and (iii) sale and leaseback transactions, where within
180 days, we or the subsidiary applies an amount equal to the greater of the
fair value of the property or the actual proceeds from the sale of such
property towards the purchase or acquisition of additional assets by one of the
important subsidiaries or to the voluntary retirement of certain company or
subsidiary debt.

Full Defeasance and Covenant Defeasance

   Unless we say otherwise in the applicable prospectus supplement, the
provisions for full defeasance and covenant defeasance described below apply to
each debt security as indicated in the applicable prospectus supplement. In
general, we expect these provisions to apply to each debt security that has a
specified currency of U.S. dollars and is not a floating rate or indexed debt
security.

   Full Defeasance. We can legally release ourselves from all payment and other
obligations on any debt securities. This is called full defeasance. For us to
do so, we must not already be in default under the indenture, nor can such
default be imminent, and each of the following must occur:

  . We must deposit in trust for the benefit of all holders of those debt
    securities a combination of money and U.S. government or U.S. government
    agency notes or bonds that will generate enough cash to make interest,
    principal and any other payments on those debt securities on their
    various due dates;

  . There must be a change in U.S. federal tax law or an Internal Revenue
    Service ruling that lets us make the above deposit without causing the
    holders to be taxed on those debt securities any differently than if we
    did not make the deposit and just repaid those debt securities ourselves.
    Under current federal tax law, the deposit and our legal release from
    your debt security would be treated as though we took back your debt
    security and gave you your share of the cash and notes or bonds deposited
    in trust. In that event, you could recognize gain or loss on your debt
    security; and

  . We must deliver to the trustee a legal opinion of our counsel confirming
    the tax law change described above.

   If we ever fully defease your debt security, you will have to rely solely on
the trust deposit for payments on your debt security. You could not look to us
for payment in the event of any shortfall.

   Covenant Defeasance. Under current U.S. federal tax law, we can make the
same type of deposit described above and be released from the restriction on
liens described under "--Restriction on Liens" above and any other restrictive
covenants relating to your debt security that may be described in the
prospectus supplement applicable to your debt security. This is called covenant
defeasance. In that event, you would lose the protection of those restrictive
covenants. In order to achieve covenant defeasance for any debt securities, we
must not already be in default under the indenture, nor can such default be
imminent, and we must do both of the following:

  . We must deposit in trust for the benefit of the holders of those debt
    securities a combination of money and U.S. government or U.S. government
    agency notes or bonds that will generate enough cash to make interest,
    principal and any other payments on those debt securities on their
    various due dates; and

  . We must deliver to the trustee a legal opinion of our counsel and an
    officer's certificate confirming that under the current U.S. federal
    income tax law we may make the above deposit without causing the holders
    to be taxed on those debt securities any differently than if we did not
    make the deposit and just repaid those debt securities ourselves.

   If we accomplish covenant defeasance with regard to your debt security,
   the following provisions of the applicable indenture and your debt
   security would no longer apply:

                                       15
<PAGE>

  . Any covenants that the prospectus supplement applicable to your debt
    security may state are applicable to your debt security; and

  . The events of default resulting from a breach of covenants, described
    below in the fourth bullet point under "--Default, Remedies and Waiver of
    Default--Events of Default".

   If we accomplish covenant defeasance on your debt security, you can still
look to us for repayment of your debt security in the event of any shortfall in
the trust deposit. You should note, however, that if one of the remaining
events of default occurred, such as our bankruptcy, and your debt security
became immediately due and payable, there may be a shortfall. Depending on the
event causing the default, you may not be able to obtain payment of the
shortfall.

Default, Remedies and Waiver of Default

   You will have special rights if an event of default with respect to your
debt security occurs and is not cured, as described in this subsection.

 Events of Default

   When we refer to an event of default with respect to any series of debt
securities, we mean any of the following:

  . We fail to pay the principal or any premium on any debt security of that
    series on the due date;

  . We do not pay any interest on any debt security of that series when due
    or within 30 days after the due date;

  . We do not deposit a sinking fund payment with regard to any debt security
    of that series on the due date, but only if the payment is required under
    provisions described in the applicable prospectus supplement;

  . We remain in breach of any other covenant we make in the indenture for
    the benefit of the relevant series, for 60 days after we receive a notice
    of default stating that we are in breach. The notice must be sent by the
    trustee or the holders of not less than 10% in principal amount of the
    relevant series of debt securities;

  . We file for bankruptcy, or other events of bankruptcy, insolvency or
    reorganization relating to us occur under U.S. federal or state law; or

  . If the prospectus supplement applicable to your debt security states that
    any additional event of default applies to the series, that event of
    default occurs.

 Remedies If an Event of Default Occurs

   If an event of default has occurred with respect to any series of debt
securities and has not been cured or waived, the trustee or the holders of not
less than 25% in aggregate principal amount of the outstanding securities of
that series, or, if any such securities are original issue discount securities,
such lesser amount as may be described in an applicable prospectus supplement
or prospectus supplements, may declare the entire principal amount of the debt
securities of that series to be due immediately. If the event of default occurs
because of events in bankruptcy, insolvency or reorganization relating to us,
the entire principal amount of the debt securities of that series will be
accelerated after the trustee or any holder provides us with written notice.

   Each of the situations described above is called an acceleration of the
maturity of the affected series of debt securities. If the maturity of any
series is accelerated and a judgment for payment has not yet been obtained, the
holders of a majority in principal amount of the debt securities of that series
may cancel the acceleration for the entire series.

                                       16
<PAGE>

   If an event of default occurs, the trustee will have special duties. In that
situation, the trustee will be obligated to use those of its rights and powers
under the indenture, and to use the same degree of care and skill in doing so,
that a prudent person would use in that situation in conducting his or her own
affairs.

   Except as described in the prior paragraph, the trustee is not required to
take any action under the indenture at the request of any holders unless the
holders offer the trustee reasonable protection from expenses and liability.
This is called an indemnity. If the trustee is provided with an indemnity
reasonably satisfactory to it, the holders of a majority in principal amount of
all debt securities of the relevant series may direct the time, method and
place of conducting any lawsuit or other formal legal action seeking any remedy
available to that trustee. These majority holders may also direct the trustee
in performing any other action under the indenture with respect to the debt
securities of that series.

   Before you bypass the trustee and bring your own lawsuit or other formal
legal action or take other steps to enforce your rights or protect your
interests relating to any debt security, the following must occur:

  . The holder of your debt security must give the trustee written notice
    that an event of default has occurred, and the event of default must not
    have been cured or waived.

  . The holders of not less than 25% in principal amount of all debt
    securities of your series must make a written request that the trustee
    take action because of the default, and they or other holders must offer
    to the trustee indemnity reasonably satisfactory to the trustee against
    the cost and other liabilities of taking that action.

  . The trustee must not have taken action for 60 days after the above steps
    have been taken.

  . During those 60 days, the holders of a majority in principal amount of
    the debt securities of your series must not have given the trustee
    directions that are inconsistent with the written request of the holders
    of not less than 25% in principal amount of the debt securities of your
    series.

   You are entitled at any time, however, to bring a lawsuit for the payment of
money due on your debt security on or after its due date.

 Waiver of Default

   The holders of not less than a majority in principal amount of the debt
securities of any series may waive a default for all debt securities of that
series. If this happens, the default will be treated as if it has not occurred.
However, no one can waive a payment default on your debt security without your
approval.

    Book-entry and other indirect owners should consult their banks or
 brokers for information on how to give notice or direction to or make a
 request of the trustee and how to declare or cancel an acceleration of the
 maturity. Book-entry and other indirect owners are described under "Legal
 Ownership and Book-Entry Issuance".


Modification of the Indenture and Waiver of Covenants

   We are permitted to make certain changes to the indenture and the debt
securities of any series issued under the indenture. These changes are
described below.

 Changes Requiring Each Holder's Approval

   Some changes cannot be made without the approval of each holder of a debt
security affected by the change under the indenture. Here is a list of those
types of changes:

  . change the stated maturity for any principal or interest payment on a
    debt security;

  . reduce the principal amount, the amount payable on acceleration of the
    maturity after a default, the interest rate or the redemption price for a
    debt security;

                                       17
<PAGE>

  . change any of our obligations to pay additional amounts;

  . impair any right a holder may have to require repayment of its debt
    security;

  . change the currency of any payment on a debt security other than as
    permitted by the debt security;

  . change any of our obligations to maintain an office or agency in the
    places and for the purposes required by the indenture;

  . impair a holder's right to sue for payment of any amount due on its debt
    security;

  . reduce the percentage in principal amount of the debt securities of any
    one or more affected series, taken together, the approval of whose
    holders is needed to change the indenture or those debt securities;

  . reduce the requirements contained in the indenture for quorum or voting;

  . reduce the percentage in principal amount of the debt securities of any
    one or more affected series, taken separately or together, as the case
    may be, the consent of whose holders is needed to waive our compliance
    with the indenture or to waive defaults; and

  . change the provisions of the indenture dealing with modification and
    waiver in any other respect, except to increase any required percentage
    referred to above or to add to the provisions that cannot be changed or
    waived without approval.

 Changes Not Requiring Approval

   Some changes do not require any approval by holders of the debt securities
of an affected series. These changes are limited to clarifications and changes
that would not adversely affect the debt securities of that series in any
material respect. Nor do we need any approval to make changes that benefit
holders of the debt securities, or affect only debt securities to be issued
under the indenture after the changes take effect.

   We may also make changes or obtain waivers that do not adversely affect a
particular debt security, even if they affect other debt securities. In those
cases, we do not need to obtain the approval of the holder of that debt
security; we need only obtain any required approvals from the holders of the
affected debt securities.

 Changes Requiring Majority Approval

   Any other change to the indenture and the debt securities issued under the
indenture would require the following approval:

  . If the change affects only the debt securities of a particular series, it
    must be approved by the holders of a majority in principal amount of the
    debt securities of that series.

  . If the change affects the debt securities of more than one series of debt
    securities issued under the indenture, it must be approved by the holders
    of a majority in principal amount of all series affected by the change,
    with the debt securities of all the affected series voting together as
    one class for this purpose.

In each case, the required approval must be given by written consent.

   The same majority approval would be required for us to obtain a waiver of
any of our covenants in the indenture. Our covenants include the promises we
make about merging and putting liens on our interests in our subsidiaries,
which we describe above under "--Mergers and Similar Transactions" and "--
Restrictions on Liens". If the holders approve a waiver of a covenant, we will
not have to comply with it. The holders, however, cannot approve a waiver of
any provision in a particular debt security, or in the indenture as it affects
that debt security, that we cannot change without the approval of the holder of
that debt security as described above in "--Changes Requiring Each Holder's
Approval", unless that holder approves the waiver.

                                       18
<PAGE>

    Book-entry and other indirect owners should consult their banks or
 brokers for information on how approval may be granted or denied if we seek
 to change the indenture or any debt securities or request a waiver.


Special Rules for Action by Holders

   When holders take any action under the indenture, such as giving a notice of
default, declaring an acceleration, approving any change or waiver or giving
the trustee an instruction, we will apply the following rules.

 Only Outstanding Debt Securities Are Eligible

   Only holders of outstanding debt securities of the applicable series will be
eligible to participate in any action by holders of debt securities of that
series. Also, we will count only outstanding debt securities in determining
whether the various percentage requirements for taking action have been met.
For these purposes, a debt security will not be "outstanding" in the following
circumstances:

  . if it has been surrendered for cancellation;

  . if we have deposited or set aside, in trust for its holder, money for its
    payment or redemption;

  . if we have fully defeased it as described above under "--Defeasance and
    Covenant Defeasance--Full Defeasance"; or

  . if we or one of our affiliates is the beneficial owner.

 Eligible Principal Amount of Some Debt Securities

   In some situations, we may follow special rules in calculating the principal
amount of a debt security that is to be treated as outstanding for the purposes
described above. This may happen, for example, if the principal amount is
payable in a foreign currency, increases over time or is not to be fixed until
maturity.

   For any debt security of the kind described below, we will decide how much
principal amount to attribute to the debt security as follows:

  . For an original issue discount debt security, we will use the principal
    amount that would be due and payable on the action date if the maturity
    of the debt security were accelerated to that date because of a default;

  . For a debt security whose principal amount is not known, we will use any
    amount that we indicate in the applicable prospectus supplement for that
    debt security. The principal amount of a debt security may not be known,
    for example, because it is based on an index that changes from time to
    time and the principal amount is not to be determined until a later date;
    or

  . For debt securities with a principal amount denominated in one or more
    foreign currencies or currency units, we will use the U.S. dollar
    equivalent, which will be determined as of the date of original issuance
    of the debt security.

 Determining Record Dates for Action by Holders

   We will generally be entitled to set any day as a record date for the
purpose of determining the holders that are entitled to take action under the
indenture. In certain limited circumstances, only the trustee will be entitled
to set a record date for action by holders. If we or the trustee set a record
date for an approval or other action to be taken by holders, that vote or
action may be taken only by persons or entities who are holders on the record
date and must be taken during the period that we specify for this purpose, or
that the trustee specifies if it sets the record date. We or the trustee, as
applicable, may shorten or lengthen this period from time to time.

                                       19
<PAGE>

Form, Exchange and Transfer of Debt Securities in Registered Form

   If any debt securities cease to be issued in registered global form, they
will be issued:

  . only in fully registered form;

  . without interest coupons; and

  . unless we indicate otherwise in the prospectus supplement applicable to
    your debt security, in denominations of $1,000 and integral multiples of
    $1,000.

   Holders may exchange their debt securities for debt securities of smaller
denominations or combined into fewer debt securities of larger denominations,
as long as the total principal amount is not changed.

   Holders may exchange or transfer their debt securities at the office of the
trustee. They may also replace lost, stolen, destroyed or mutilated debt
securities at that office. We have appointed the trustee to act as our agent
for registering debt securities in the names of holders and transferring and
replacing debt securities. We may appoint another entity to perform these
functions or perform them ourselves.

   Holders will not be required to pay a service charge to transfer or exchange
their debt securities, but they may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. The transfer or
exchange, and any replacement, will be made only if our transfer agent is
satisfied with the holder's proof of legal ownership. The transfer agent may
require an indemnity before replacing any debt securities.

   If we have designated additional transfer agents for your debt security,
they will be named in the prospectus supplement applicable to your debt
security. We may appoint additional transfer agents or cancel the appointment
of any particular transfer agent. We may also approve a change in the office
through which any transfer agent acts.

   If the debt securities of any series are redeemable and we redeem less than
all those debt securities, we may block the transfer or exchange of those debt
securities during the period beginning 15 days before the day we mail the
notice of redemption and ending on the day of that mailing, in order to freeze
the list of holders to prepare the mailing. We may also refuse to register
transfers of or exchange any debt security selected for redemption, except that
we will continue to permit transfers and exchanges of the unredeemed portion of
any debt security being partially redeemed.

   If a debt security is issued as a registered global debt security, only the
depositary, Euroclear and Clearstream, Luxembourg, as applicable, will be
entitled to transfer and exchange the debt security as described in this
subsection, since it or they will be the sole holder of the debt security.

   The rules for exchange described above apply to exchange of debt securities
for other debt securities of the same series and kind. If a debt security is
exchangeable for a different kind of security, such as one that we have not
issued, the rules governing that type of exchange will be described in the
applicable prospectus supplement.

Payment Mechanics for Debt Securities in Registered Form

 Who Receives Payment?

   If interest is due on a debt security on an interest payment date, we will
pay the interest to the person in whose name the debt security is registered at
the close of business on the regular record date relating to the interest
payment date as described under "--Payment and Record Dates for Interest"
below. If interest is due at maturity but on a day that is not an interest
payment date, we will pay the interest to the person entitled to receive the
principal of the debt security. If principal or another amount besides interest
is due on a debt security at maturity, we will pay the amount to the holder of
the debt security against surrender of the debt

                                       20
<PAGE>

security at a proper place of payment or, in the case of a global debt
security, in accordance with the applicable policies of the depositary,
Euroclear and Clearstream, Luxembourg, as applicable.

 Payment and Record Dates for Interest

   Unless we specify otherwise in the applicable prospectus supplement,
interest on any fixed rate debt security will be payable semiannually on dates
to be specified in the applicable prospectus supplement, and at maturity, and
the regular record date relating to an interest payment date for any fixed rate
debt security will also be specified in the applicable prospectus supplement.
The regular record date relating to an interest payment date for any floating
rate debt security will be the 15th calendar day before that interest payment
date. These record dates will apply regardless of whether a particular record
date is a "business day", as defined below. For the purpose of determining the
holder at the close of business on a regular record date when business is not
being conducted, the close of business will mean 5:00 P.M., New York City time,
on that day.

   Business Day. The term "business day" means, for any debt security, a day
that meets all the following applicable requirements:

  . for all debt securities, is a Monday, Tuesday, Wednesday, Thursday or
    Friday that is not a day on which banking institutions in New York City
    generally are authorized or obligated by law, regulation or executive
    order to close;

  . if the debt security is a floating rate debt security whose interest rate
    is based on LIBOR, is also a day on which dealings in the relevant index
    currency specified in the applicable prospectus supplement are transacted
    in the London interbank market;

  . if the debt security has a specified currency other than U.S. dollars or
    euros, is also a day on which banking institutions are not authorized or
    obligated by law, regulation or executive order to close in the principal
    financial center of the country issuing the specified currency. By
    "principal financial center," we mean the capital city of the country
    issuing the specified currency in respect of which payment on the debt
    security is to be made (or, with respect to the calculation of LIBOR,
    issuing the specified index currency). However, with respect to U.S.
    Dollars, Australian Dollars, Deutsche Marks, Dutch Guilders, Italian Lire
    and Swiss Francs, the principal financial center will be the City of New
    York, Sydney, Frankfurt, Amsterdam, Milan and Luxembourg, respectively;

  . if the debt security either is a floating rate debt security whose
    interest rate is based on EURIBOR or has a specified currency of euros,
    is also a day on which the Trans-European Automated Real-Time Gross
    Settlement Express Transfer (TARGET) System, or any successor system, is
    open for business.

 How We Will Make Payments Due in U.S. Dollars

   We will follow the practice described in this subsection when paying amounts
due in U.S. dollars. Payments of amounts due in other currencies will be made
as described in the next subsection.

   Payments on Global Debt Securities. We will make payments on a global debt
security in accordance with the applicable policies of the depositary as in
effect from time to time. Under those policies, we will make payments directly
to the depositary, or its nominee, and not to any indirect owners who own
beneficial interests in the global debt security. An indirect owner's right to
receive those payments will be governed by the rules and practices of the
depositary and its participants, as described in the section entitled "Legal
Ownership and Book-Entry Issuance--What Is a Global Security?".

   Payments on Non-Global Debt Securities. We will make payments on a debt
security in non-global, registered form as follows. We will pay interest that
is due on an interest payment date by check mailed on the interest payment date
to the holder at his or her address shown on the trustee's records as of the
close of business on the regular record date. We will make all other payments
by check to the paying agent described below, against surrender of the debt
security. All payments by check will be made in next-day funds--i.e., funds
that become available on the day after the check is cashed.

                                       21
<PAGE>

   Alternatively, if a non-global debt security has a face amount of at least
$1,000,000 and the holder asks us to do so, we will pay any amount that becomes
due on the debt security by wire transfer of immediately available funds to an
account at a bank in New York City, on the due date. To request wire payment,
the holder must give the paying agent appropriate wire transfer instructions at
least five business days before the requested wire payment is due. In the case
of any interest payment due on an interest payment date, the instructions must
be given by the person or entity who is the holder on the relevant regular
record date. In the case of any other payment, payment will be made only after
the debt security is surrendered to the paying agent. Any wire instructions,
once properly given, will remain in effect unless and until new instructions
are given in the manner described above.

    Book-entry and other indirect owners should consult their banks or
 brokers for information on how they will receive payments on their debt
 securities.


 How We Will Make Payments Due in Other Currencies

   We will follow the practice described in this subsection when paying amounts
that are due in a specified currency other than U.S. dollars.

   Payments on Global Debt Securities. We will make payments on a global debt
security in accordance with the applicable policies of the depositary,
Euroclear and Clearstream, Luxembourg, as applicable, as in effect from time to
time. Unless we specify otherwise in the applicable prospectus supplement, The
Depository Trust Company, New York, New York, known as DTC, will be the
depositary for all debt securities in global form. We understand that these
policies, as currently in effect at DTC, are as follows.

   Unless otherwise indicated in the prospectus supplement applicable to your
debt security, if you are an indirect owner of global debt securities
denominated in a specified currency other than U.S. dollars and if you elect to
receive payments in that other currency, you must notify the participant
through which your interest in the global debt security is held of your
election:

  . on or before the applicable regular record date, in the case of a payment
    of interest; or

  . on or before the 16th day before the stated maturity, or any redemption
    or repayment date, in the case of payment of principal or any premium.

   Your participant must, in turn, notify DTC of your election on or before the
third DTC business day after that regular record date, in the case of a payment
of interest, and on or before the 12th DTC business day prior to the stated
maturity, or on the redemption or repayment date if your debt security is
redeemed or repaid earlier, in the case of a payment of principal or any
premium.

   DTC, in turn, will notify the paying agent of your election in accordance
with DTC's procedures.

   If complete instructions are received by the participant and forwarded by
the participant to DTC, and by DTC to the paying agent, on or before the dates
noted above, the paying agent, in accordance with DTC's instructions, will make
the payments to you or your participant by wire transfer of immediately
available funds to an account maintained by the payee with a bank located in
the country issuing the specified currency or in another jurisdiction
acceptable to us and the paying agent.

   If the foregoing steps are not properly completed, we expect DTC to inform
the paying agent that payment is to be made in U.S. dollars. In that case, we
or our agent will convert the payment to U.S. dollars in the manner described
below under "--Conversion to U.S. Dollars". We expect that we or our agent will
then make the payment in U.S. dollars to DTC, and that DTC in turn will pass it
along to its participants.

    Indirect owners of a global debt security denominated in a currency other
 than U.S. dollars should consult their banks or brokers for information on
 how to request payment in the specified currency.


                                       22
<PAGE>

   Payments on Non-Global Debt Securities. Except as described in the last
paragraph under this heading, we will make payments on debt securities in non-
global form in the applicable specified currency. We will make these payments
by wire transfer of immediately available funds to any account that is
maintained in the applicable specified currency at a bank designated by the
holder and is acceptable to us and the trustee. To designate an account for
wire payment, the holder must give the paying agent appropriate wire
instructions at least five business days before the requested wire payment is
due. In the case of any interest payment due on an interest payment date, the
instructions must be given by the person or entity who is the holder on the
regular record date. In the case of any other payment, the payment will be made
only after the debt security is surrendered to the paying agent. Any
instructions, once properly given, will remain in effect unless and until new
instructions are properly given in the manner described above.

   If a holder fails to give instructions as described above, we will notify
the holder at the address in the trustee's records and will make the payment
within five business days after the holder provides appropriate instructions.
Any late payment made in these circumstances will be treated under the
indenture as if made on the due date, and no interest will accrue on the late
payment from the due date to the date paid.

   Although a payment on a debt security in non-global form may be due in a
specified currency other than U.S. dollars, we will make the payment in U.S.
dollars if the holder asks us to do so. To request U.S. dollar payment, the
holder must provide appropriate written notice to the trustee at least five
business days before the next due date for which payment in U.S. dollars is
requested. In the case of any interest payment due on an interest payment date,
the request must be made by the person or entity who is the holder on the
regular record date. Any request, once properly made, will remain in effect
unless and until revoked by notice properly given in the manner described
above.

    Book-entry and other indirect owners of a debt security with a specified
 currency other than U.S. dollars should contact their banks or brokers for
 information about how to receive payments in the specified currency or in
 U.S. dollars.


   Conversion to U.S. Dollars. When we are asked by a holder to make payments
in U.S. dollars of an amount due in another currency, either on a global debt
security or a non-global debt security as described above, the exchange rate
agent described below will calculate the U.S. dollar amount the holder receives
in the exchange rate agent's discretion.

   A holder that requests payment in U.S. dollars will bear all associated
currency exchange costs, which will be deducted from the payment.

   When the Specified Currency Is Not Available. If we are obligated to make
any payment in a specified currency other than U.S. dollars, and the specified
currency or any successor currency is not available to us due to circumstances
beyond our control--such as the imposition of exchange controls or a disruption
in the currency markets--we will be entitled to satisfy our obligation to make
the payment in that specified currency by making the payment in U.S. dollars,
on the basis of the exchange rate determined by the exchange rate agent
described below, in its discretion.

   The foregoing will apply to any debt security, whether in global or non-
global form, and to any payment, including a payment at maturity. Any payment
made under the circumstances and in a manner described above will not result in
a default under any debt security or the applicable indenture.

   The Euro. The euro may be a specified currency for some debt securities. On
January 1, 1999, the euro became the legal currency for the 11 member states
participating in the European Economic and Monetary Union. During a transition
period from January 1, 1999 to December 31, 2001 and for a maximum of six
months after December 31, 2001, the former national currencies of these 11
member states will continue to be legal tender in their country of issue, at
rates irrevocably fixed on December 31, 1998.

                                       23
<PAGE>

   Exchange Rate Agent. If we issue a debt security in a specified currency
other than U.S. dollars, we will appoint a financial institution to act as the
exchange rate agent and will name the institution initially appointed when the
debt security is originally issued in the applicable prospectus supplement. We
may change the exchange rate agent from time to time after the original issue
date of the debt security without your consent and without notifying you of the
change.

   All determinations made by the exchange rate agent will be in its sole
discretion unless we state in the applicable prospectus supplement that any
determination requires our approval. In the absence of manifest error, those
determinations will be conclusive for all purposes and binding on you and us,
without any liability on the part of the exchange rate agent.

 Payment When Offices Are Closed

   If any payment is due on a debt security on a day that is not a business
day, we will make the payment on the next day that is a business day. Payments
postponed to the next business day in this situation will be treated under the
indenture as if they were made on the original due date. Postponement of this
kind will not result in a default under any debt security or the indenture, and
no interest will accrue on the postponed amount from the original due date to
the next day that is a business day. The term business day has a special
meaning, which we describe above under "--Payment and Record Dates for
Interest".

 Paying Agent

   We may appoint one or more financial institutions to act as our paying
agents, at whose designated offices debt securities in non-global entry form
may be surrendered for payment at their maturity. We call each of those offices
a paying agent. We may add, replace or terminate paying agents from time to
time. We may also choose to act as our own paying agent. Initially, we have
appointed the trustee, at its corporate trust office in New York City, as the
paying agent. We must notify you of changes in the paying agents.

 Unclaimed Payments

   Regardless of who acts as paying agent, all money paid by us to a paying
agent that remains unclaimed at the end of two years after the amount is due to
a holder will be repaid to us. After that two-year period, the holder may look
only to us for payment (less any amount we may be obligated to pay to the state
of Virginia under Virginia state law) and not to the trustee, any other paying
agent or anyone else.

Notices

   Notices to be given to holders of a global debt security will be given only
to the depositary, in accordance with its applicable policies as in effect from
time to time. Notices to be given to holders of debt securities not in global
form will be sent by mail to the respective addresses of the holders as they
appear in the trustee's records, and will be deemed given when mailed. Neither
the failure to give any notice to a particular holder, nor any defect in a
notice given to a particular holder, will affect the sufficiency of any notice
given to another holder.

    Book-entry and other indirect owners should consult their banks or
 brokers for information on how they will receive notices.


Our Relationship With the Trustee

   The Chase Manhattan Bank has provided commercial banking and other services
for us and our affiliates in the past and may do so in the future. Among other
things, The Chase Manhattan Bank serves as trustee or agent with regard to
other debt obligations of Universal Corporation.

                                       24
<PAGE>

                    LEGAL OWNERSHIP AND BOOK-ENTRY ISSUANCE

   In this section, we describe special considerations that will apply to
registered securities issued in book-entry form. First we describe the
difference between legal ownership and indirect ownership of registered
securities. Then we describe special provisions that apply to global
securities.

Who is the Legal Owner of a Registered Security?

   Each debt security in registered form will be represented either by a
certificate issued in definitive form to a particular investor or by one or
more global securities representing the entire issuance of securities. We refer
to those who have debt securities registered in their own names on the books
that we or the trustee maintain for this purpose as the "holders" of those
securities. These persons are the legal holders of the debt securities. We
refer to those who indirectly through others own beneficial interests in debt
securities that are not registered in their own names as indirect owners of
those securities. As we discuss below, indirect owners are not legal holders,
and investors in securities issued in book-entry form or in street name will be
indirect owners.

 Book-Entry Owners

   We will issue each debt security in book-entry form only, unless we specify
otherwise in the applicable prospectus supplement. This means debt securities
will be represented by one or more global securities registered in the name of
a financial institution that holds them as depositary on behalf of other
financial institutions that participate in the depositary's book-entry system.
These participating institutions, in turn, hold beneficial interests in the
debt securities on behalf of themselves or their customers.

   Under the indenture, only the person in whose name a debt security is
registered is recognized as the holder of that security. Consequently, for debt
securities issued in global form, we will recognize only the depositary as the
holder of the securities and we will make all payments on the debt securities,
including deliveries of any property other than cash, to the depositary. The
depositary passes along the payments it receives to its participants, which in
turn pass the payments along to their customers who are the beneficial owners.
The depositary and its participants do so under agreements they have made with
one another or with their customers; they are not obligated to do so under the
terms of the debt securities.

   As a result, investors will not own debt securities directly. Instead, they
will own beneficial interests in a global security, through a bank, broker or
other financial institution that participates in the depositary's book-entry
system or holds an interest through a participant. As long as the debt
securities are issued in global form, investors will be indirect owners, and
not holders, of the securities.

 Street Name Owners

   In the future we may terminate a global security or issue debt securities
initially in non-global form. In these cases, investors may choose to hold
their debt securities in their own names or in street name. Securities held by
an investor in street name would be registered in the name of a bank, broker or
other financial institution that the investor chooses, and the investor would
hold only a beneficial interest in those securities through an account he or
she maintains at that institution.

   For debt securities held in street name, we will recognize only the
intermediary banks, brokers and other financial institutions in whose names the
debt securities are registered as the holders of those securities and we will
make all payments on those securities, including deliveries of any property
other than cash, to them. These institutions pass along the payments they
receive to their customers who are the beneficial owners, but only because they
agree to do so in their customer agreements or because they are legally
required to do so. Investors who hold debt securities in street name will be
indirect owners, not holders, of those securities.

                                       25
<PAGE>

 Legal Holders

   Our obligations, as well as the obligations of the trustee and any other
third parties employed by us or the trustee, run only to the holders of the
debt securities. We do not have obligations to investors who hold beneficial
interests in global securities, in street name or by any other indirect means.
This will be the case whether an investor chooses to be an indirect holder of a
debt security or has no choice because we are issuing the securities only in
global form.

   For example, once we make a payment or give a notice to the holder, we have
no further responsibility for that payment or notice even if that holder is
required, under agreements with depositary participants or customers or by law,
to pass it along to the indirect owners but does not do so. Similarly, if we
want to obtain the approval of the holders for any purpose--e.g., to amend the
indenture for a series of debt securities or to relieve us of the consequences
of a default, or of our obligation to comply with a particular provision of the
indenture--we would seek the approval only from the holders, and not the
indirect owners, of the relevant securities. Whether and how the holders
contact the indirect owners is up to the holders.

   When we refer to "you" in this prospectus, we mean those who invest in the
debt securities being offered by this prospectus, whether they are the holders
or only indirect owners of those securities. When we refer to "your securities"
in this prospectus, we mean the debt securities in which you will hold a direct
or indirect interest.

 Special Considerations for Indirect Owners

   If you hold debt securities through a bank, broker or other financial
institution, either in book-entry form or in street name, you should check with
your own institution to find out:

  . how it handles securities payments and notices;

  . whether it imposes fees or charges;

  . how it would handle a request for the holders' consent, if ever required;

  . whether and how you can instruct it to send you debt securities
    registered in your own name so you can be a holder, if that is permitted
    in the future;

  . how it would exercise rights under the debt securities if there were a
    default or other event triggering the need for holders to act to protect
    their interests; and

  . if the debt securities are in book-entry form, how the depositary's rules
    and procedures will affect these matters.

What Is a Global Security?

   We will issue each debt security in book-entry form only, unless we specify
otherwise in the applicable prospectus supplement. Each debt security issued in
book-entry form will be represented by a global security that we deposit with
and register in the name of one or more financial institutions or their
nominees, which we select. A financial institution that we select for any
security for this purpose is called the "depositary" for that security. A
security will usually have only one depositary but it may have more.

   Each series of debt securities will have one or more of the following as the
depositaries:

  . The Depository Trust Company, New York, New York, which is known as
    "DTC";

  . a financial institution holding the debt securities on behalf of Morgan
    Guaranty Trust Company of New York, acting out of its Brussels, Belgium,
    office, as operator of the Euroclear system, which is known as
    "Euroclear";

                                       26
<PAGE>

  . a financial institution holding the securities on behalf of Clearstream
    Banking, societe anonyme, Luxembourg, which is known as "Clearstream,
    Luxembourg"; and

  . any other clearing system or financial institution named in the
    applicable prospectus supplement.

   The depositaries named above may also be participants in one another's
systems. Thus, for example, if DTC is the depositary for a global security,
investors may hold beneficial interests in that security through Euroclear or
Clearstream, Luxembourg, as DTC participants. The depositary or depositaries
for your securities will be named in your prospectus supplement; if none is
named, the depositary will be DTC.

   A global security may represent one or any other number of individual
securities. Generally, all securities represented by the same global security
will have the same terms. We may, however, issue a global security that
represents multiple securities of the same kind, such as debt securities, that
have different terms and are issued at different times. We call this kind of
global security a master global security. The prospectus supplement applicable
to your debt security will not indicate whether your debt securities are
represented by a master global security.

   A global security may not be transferred to or registered in the name of
anyone other than the depositary or its nominee, unless special termination
situations arise. We describe those situations below under "--Holder's Option
to Obtain a Non-Global Security; Special Situations When a Global Security Will
Be Terminated". As a result of these arrangements, the depositary or its
nominee will be the sole registered owner and holder of all securities
represented by a global security, and investors will be permitted to own only
beneficial interests in a global security. Beneficial interests must be held by
means of an account with a broker, bank or other financial institution that in
turn has an account with the depositary or with another institution that does.
Thus, an investor whose debt security is represented by a global security will
not be a holder of the security, but only an indirect owner of a beneficial
interest in the global security.

   If the prospectus supplement for a particular debt security indicates that
the security will be issued in global form only, then the security will be
represented by a global security at all times unless and until the global
security is terminated. We describe the situations in which this can occur
below under "--Holder's Option to Obtain a Non-Global Security; Special
Situations When a Global Security Will Be Terminated". If termination occurs,
we may issue the securities through another book-entry clearing system or
decide that the securities may no longer be held through any book-entry
clearing system.

 Special Considerations for Global Securities

   As an indirect owner, an investor's rights relating to a global security
will be governed by the account rules of the depositary, those of the
investor's financial institution (e.g., Euroclear and Clearstream, Luxembourg,
if applicable), as well as general laws relating to securities transfers. We do
not recognize this type of investor or any intermediary as a holder of
securities and instead deal only with the depositary that holds the global
security.

   If debt securities are issued only in the form of a global security, an
investor should be aware of the following:

  . An investor cannot cause the debt securities to be registered in his or
    her own name, and cannot obtain non-global certificates for his or her
    interest in the securities, except in the special situations we describe
    below;

  . An investor will be an indirect holder and must look to his or her own
    bank or broker for payments on the debt securities and protection of his
    or her legal rights relating to the securities, as we describe under "--
    Legal Ownership and Book-Entry Issuance" above;

  . An investor may not be able to sell interests in the debt securities to
    some insurance companies and other institutions that are required by law
    to own their securities in non-book-entry form;

                                       27
<PAGE>

  . An investor may not be able to pledge his or her interest in a global
    security in circumstances where certificates representing the securities
    must be delivered to the lender or other beneficiary of the pledge in
    order for the pledge to be effective;

  . The depositary's policies and those of any participant in the
    depositary's system or other intermediary (e.g., Euroclear or
    Clearstream, Luxembourg if DTC is the depositary) through which that
    institution holds security interests, which may change from time to time,
    will govern payments, transfers, exchanges and other matters relating to
    an investor's interest in a global security. Neither we, nor the trustee,
    will have any responsibility for any aspect of the depositary's policies
    or actions or records of ownership interests in a global security.
    Neither we, nor the trustee, supervise the depositary in any way;

  . The depositary will require that those who purchase and sell interests in
    a global security within its book-entry system use immediately available
    funds and your broker or bank may require you to do so as well; and

  . Financial institutions that participate in the depositary's book-entry
    system and through which an investor holds its interest in the global
    securities (including Euroclear and Clearstream, Luxembourg, if you hold
    through them when the depositary is DTC) may also have their own policies
    affecting payments, notices and other matters relating to the debt
    securities. For example, if you hold an interest in a global security
    through Euroclear or Clearstream, Luxembourg, when DTC is the depositary,
    Euroclear or Clearstream, Luxembourg, as applicable, will require those
    who purchase and sell interests in that security through them to use
    immediately available funds and comply with other policies and
    procedures, including deadlines for giving instructions as to
    transactions that are to be effected on a particular day. There may be
    more than one financial intermediary in the chain of ownership for an
    investor. We do not monitor and are not responsible for the policies or
    actions of any of those intermediaries.

   Holder's Option to Obtain a Non-Global Security; Special Situations When a
Global Security Will Be Terminated

   If we issue any series of debt securities in book-entry form but we choose
to give the beneficial owners of that series the right to obtain non-global
securities, any beneficial owner entitled to obtain non-global securities may
do so by following the applicable procedures of the depositary, any transfer
agent or registrar for that series and that owner's bank, broker or other
financial institution through which that owner holds its beneficial interest in
the debt securities.

   In addition, in a few special situations described below, a global security
will be terminated and interests in it will be exchanged for certificates in
non-global form representing the debt securities it represented. After that
exchange, the choice of whether to hold the debt securities directly or in
street name will be up to the investor. Investors must consult their own banks
or brokers to find out how to have their interests in a global security
transferred on termination to their own names, so that they will be holders. We
have described the rights of holders and street name investors above under
"Legal Ownership and Book-Entry Issuance".

   The special situations for termination of a global security are as follows:

  . if the depositary notifies us that it is unwilling, unable or no longer
    qualified to continue as depositary for that global security and we do
    not appoint another institution to act as depositary within 60 days;

  . if we notify the trustee that we wish to terminate that global security;
    or

  . if an event of default has occurred with regard to the debt securities
    and has not been cured or waived.

If a global security is terminated, only the depositary, and neither we nor the
trustee, is responsible for deciding the names of the institutions in whose
names the debt securities represented by the global security will be registered
and, therefore, who will be the holders of those securities.

                                       28
<PAGE>

 Considerations Relating to Euroclear and Clearstream, Luxembourg

   Euroclear and Clearstream, Luxembourg are securities clearance systems in
Europe. Both systems clear and settle securities transactions between their
participants through electronic, book-entry delivery of securities against
payment.

   Euroclear and Clearstream, Luxembourg may be depositaries for a global
security. In addition, if DTC is the depositary for a global security,
Euroclear and Clearstream, Luxembourg may hold interests in the global security
as participants in DTC.

   As long as any global security is held by Euroclear or Clearstream,
Luxembourg, you may hold an interest in the global security only through an
organization that participates, directly or indirectly, in Euroclear or
Clearstream, Luxembourg. If Euroclear or Clearstream, Luxembourg is the
depositary for a global security and there is no depositary in the United
States, you will not be able to hold interests in that global security through
any securities clearance system in the United States.

   Payments, notices and other communications or deliveries relating to the
securities made through Euroclear or Clearstream, Luxembourg must comply with
the rules and procedures of those systems. Those systems could change their
rules and procedures at any time. We have no control over those systems or
their participants and we take no responsibility for their activities.
Transactions between participants in Euroclear or Clearstream, Luxembourg, on
one hand, and participants in DTC, on the other hand, when DTC is the
depositary, would also be subject to DTC's rules and procedures.

 Special Timing Considerations for Transactions in Euroclear and Clearstream,
 Luxembourg

   Investors will be able to make and receive through Euroclear and
Clearstream, Luxembourg payments, notices and other communications and
deliveries involving any debt securities held through those systems only on
days when those systems are open for business. Those systems may not be open
for business on days when banks, brokers and other institutions are open for
business in the United States.

   In addition, because of time-zone differences, U.S. investors who hold their
interests in the debt securities through these systems, and wish to transfer
their interests, or to receive or make a payment or delivery with respect to
their interests, on a particular day may find that the transaction will not be
effected until the next business day in Luxembourg or Brussels, as applicable.
Investors who hold their interests through both DTC and Euroclear or
Clearstream, Luxembourg may need to make special arrangements to finance any
purchases or sales of their interests between the U.S. and European clearing
systems, and those transactions may settle later than would be the case for
transactions within one clearing system.

                                       29
<PAGE>

          CONSIDERATIONS RELATING TO SECURITIES ISSUED IN BEARER FORM

   If we issue debt securities in bearer, rather than registered form, those
securities will be subject to special provisions described in this section.

Temporary and Permanent Bearer Global Securities

   If we issue debt securities in bearer form, all securities of the same
series and kind will initially be represented by a temporary bearer global
security, which we will deposit with a common depositary for Euroclear and
Clearstream, Luxembourg. Euroclear and Clearstream, Luxembourg will credit the
account of each of their subscribers with the amount of debt securities the
subscriber purchases. We will promise to exchange the temporary bearer global
security for a permanent bearer global security, which we will deliver to the
common depositary upon the later of the following two dates:

  . the date that is 40 days after the later of (a) the completion of the
    distribution of the securities as determined by the underwriter, dealer
    or agent and (b) the closing date for the sale of the securities by us;
    we may extend this date as described below under "--Extensions for
    Further Issuances"; and

  . the date on which Euroclear and Clearstream, Luxembourg provide us or our
    agent with the necessary tax certificates described below under "--U.S.
    Tax Certificate Required".

   Unless we say otherwise in the applicable prospectus supplement, owners of
beneficial interests in a permanent bearer global security will be able to
exchange those interests at their option, in whole but not in part, for:

  . non-global securities in bearer form with interest coupons attached, if
    applicable; or

  . non-global securities in registered form without coupons attached.

A beneficial owner will be able to make this exchange by giving us or our
designated agent 60 days' prior written notice in accordance with the terms of
the debt securities.

 Extensions for Further Issuances

   Without the consent of the trustee, any holders or any other person, we may
issue additional debt securities identical to a prior issue from time to time.
If we issue additional securities before the date on which we would otherwise
be required to exchange the temporary bearer global security representing the
prior issue for a permanent bearer global security as described above, that
date will be extended until the 40th day after the completion of the
distribution and the closing, whichever is later, for the additional debt
securities. Extensions of this kind may be repeated if we sell additional
identical securities. As a result of these extensions, those who own beneficial
interests in the global bearer securities may be unable to resell their
interests into the United States or to or for the account or benefit of a U.S.
person until the 40th day after the additional debt securities have been
distributed and sold.

U.S. Tax Certificate Required

   We will not pay or deliver interest or other amounts in respect of any
portion of a temporary bearer global security unless and until Euroclear or
Clearstream, Luxembourg delivers to us or our agent a tax certificate with
regard to the owners of the beneficial interests in that portion of the global
security. Also, we will not exchange any portion of a temporary global bearer
security for a permanent bearer global security unless and until we receive
from Euroclear or Clearstream, Luxembourg a tax certificate with regard to the
owners of the beneficial interests in that portion to be exchanged. In each
case, this tax certificate must state that each of the relevant owners:

  . is not a United States person, as defined below under "--Limitations on
    Issuance of Bearer Securities";

                                       30
<PAGE>

  . is a foreign branch of a United States financial institution purchasing
    for its own account or for resale, or is a United States person who
    acquired the security through a financial institution of this kind and
    who holds the security through that financial institution on the date of
    certification, provided in either case that the financial institution
    provides a certificate to us or the distributor selling the debt security
    to it stating that it agrees to comply with the requirements of Section
    165(j)(3)(A), (B) or (C) of the Internal Revenue Code and the U.S.
    Treasury Regulations under that Section; or

  . is a financial institution holding for purposes of resale during the
    "restricted period", as defined in U.S. Treasury Regulations Section
    1.163-5(c)(2)(i)(D)(7). A financial institution of this kind, whether or
    not it is also described in either of the two preceding bullet points,
    must certify that it has not acquired the debt security for purposes of
    resale directly or indirectly to a United States person or to a person
    within the United States or its possessions.

The tax certificate must be signed by an authorized person satisfactory to us.

    No one who owns an interest in a temporary bearer global security will
 receive payment or delivery of any amount or property in respect of its
 interest, and will not be permitted to exchange its interest for an interest
 in a permanent bearer global security or a security in any other form,
 unless and until we or our agent have received the required tax certificate
 on its behalf.


Special requirements and restrictions imposed by United States federal tax laws
and regulations will apply to bearer debt securities. We describe these below
under "--Limitations on Issuance of Bearer Debt Securities."

Legal Ownership of Bearer Securities

   Securities in bearer form will not be registered in any name. Whoever is the
bearer of the certificate representing a security in bearer form is the legal
owner of that security. Legal title and ownership of bearer securities will
pass by delivery of the certificates representing the securities. Thus, when we
use the term "holder" in this prospectus with regard to bearer securities, we
mean the bearer of those securities.

   The common depositary for Euroclear and Clearstream, Luxembourg will be the
bearer, and thus the holder and legal owner, of both the temporary and
permanent bearer global securities described above. Investors in those debt
securities will own beneficial interests in the securities represented by those
global securities; they will be only indirect owners, not holders or legal
owners, of the securities.

   As long as the common depositary is the bearer of any bearer security in
global form, the common depositary will be considered the sole legal owner and
holder of the debt securities represented by the bearer security in global
form. Ownership of beneficial interests in any bearer security in global form
will be shown on records maintained by Euroclear or Clearstream, Luxembourg, as
applicable, by the common depositary on their behalf and by the direct and
indirect participants in their systems, and ownership interests can be held and
transferred only through those records. We will pay any amounts owing with
respect to a bearer global security only to the common depositary.

   Neither we, the trustee nor any agent will recognize any owner of beneficial
interests as a holder. Nor will we, the trustee or any agent have any
responsibility for the ownership records or practices of Euroclear or
Clearstream, Luxembourg, the common depositary or any direct or indirect
participants in those systems or for any payments, transfers, deliveries,
communications or other transactions within those systems, all of which will be
subject to the rules and procedures of those systems and participants. If you
own a beneficial interest in a global bearer security, you must look only to
Euroclear or Clearstream, Luxembourg, and to their direct and indirect
participants through which you hold your interest, for your ownership rights.
You should read the section entitled "Legal Ownership and Book-Entry Issuance"
for more information about holding interests through Euroclear and Clearstream,
Luxembourg.

                                       31
<PAGE>

Payment and Exchange of Non-Global Bearer Securities

   Payments and deliveries owing on non-global bearer securities will be made,
in the case of interest payments, only to the holder of the relevant coupon
after the coupon is surrendered to the paying agent. In all other cases,
payments will be made only to the holder of the certificate representing the
relevant security after the certificate is surrendered to the paying agent.

   Non-global bearer securities, with all unmatured coupons relating to the
securities, if any, may be exchanged for a like aggregate amount of non-global
bearer or registered securities of like kind. Non-global registered securities
may be exchanged for a like aggregate amount of non-global registered
securities of like kind, as described above in the sections on the different
types of securities we may offer. However, we will not issue bearer securities
in exchange for any registered securities.

   Replacement certificates and coupons for non-global bearer securities will
not be issued in lieu of any lost, stolen or destroyed certificates and coupons
unless we and our transfer agent receive evidence of the loss, theft or
destruction, and an indemnity against liabilities, satisfactory to us and our
agent. Upon redemption or any other settlement before the stated maturity or
expiration, as well as upon any exchange, of a non-global bearer security, the
holder will be required to surrender all unmatured coupons to us or our
designated agent. If any unmatured coupons are not surrendered, we or our agent
may deduct the amount of interest relating to those coupons from the amount
otherwise payable or we or our agent may demand an indemnity against
liabilities satisfactory to us and our agent.

   We may make payments, deliveries and exchanges in respect of bearer
Securities in global form in any manner acceptable to us and the depositary.

Notices

   If we are required to give notice to the holders of bearer securities, we
will do so by publication in a daily newspaper of general circulation in a city
in Western Europe. The term "daily newspaper" means a newspaper that is
published on each day, other than a Saturday, Sunday or holiday, in the
relevant city. If the bearer securities are listed on the Luxembourg Stock
Exchange and its rules so require, that city will be Luxembourg and that
newspaper will be the Luxemburger Wort, unless publication in that newspaper is
impractical. A notice of this kind will be presumed to have been received on
the date it is first published. If we cannot give notice as described in this
paragraph because the publication of any newspaper is suspended or it is
otherwise impractical to publish the notice, then we will give notice in
another form. That alternate form of notice will be deemed to be sufficient
notice to each holder. Neither the failure to give notice to a particular
holder, nor any defect in a notice given to a particular holder, will affect
the sufficiency of any notice given to another holder.

   We may give any required notice with regard to bearer securities in global
form to the common depositary for the securities, in accordance with its
applicable procedures. If these provisions do not require that notice be given
by publication in a newspaper, we may omit giving notice by publication.

Limitations on Issuance of Bearer Securities

   In compliance with United States federal income tax laws and regulations,
bearer securities, including bearer securities in global form, will not be
offered, sold, resold or delivered, directly or indirectly, in the United
States or its possessions or to United States persons, as defined below, except
as otherwise permitted by U.S. Treasury Regulations Section 1.163-
5(c)(2)(i)(D). Any underwriters, dealers or agents participating in the
offerings of bearer securities, directly or indirectly, must agree that they
will not, in connection with the original issuance of any bearer securities, or
under the restricted period applicable under Treasury Regulations cited
earlier, offer, sell, resell or deliver, directly or indirectly, any bearer
debt securities in the United States or its possessions or to United States
persons, other than as permitted by the applicable Treasury Regulations
described above. In addition, any underwriters, dealers or agents must have
procedures reasonably designed to ensure that their employees or agents who are
directly engaged in selling bearer securities are aware of the above
restrictions on the offering, sale, resale or delivery of bearer securities.

                                       32
<PAGE>

   We will make payments on bearer securities only outside the United States
and its possessions except as permitted by the applicable Treasury regulations
described above.

   Bearer securities and any coupons will bear the following legend:

     "Any United States person who holds this obligation will be subject to
  limitations under the United States income tax laws, including the
  limitations provided in sections 165(j)and 1287(a) of the Internal Revenue
  Code."

   The sections referred to in this legend provide that, with exceptions, a
United States person will not be permitted to deduct any loss, and will not be
eligible for capital gain treatment with respect to any gain, realized on the
sale, exchange or redemption of that bearer security or coupon.

   As used in this subsection entitled "--Limitations on Issuance of Bearer
Securities", the term "bearer securities" includes bearer securities that are
part of units. As used in this section entitled "Considerations Relating to
Securities Issued in Bearer Form", "United States person" means:

  . a citizen or resident of the United States for United States federal
    income tax purposes;

  . a corporation or partnership, including an entity treated as a
    corporation or partnership for United States federal income tax purposes,
    created or organized in or under the laws of the United States, any state
    of the United States or the District of Columbia;

  . an estate the income of which is subject to United States federal income
    taxation regardless of its source; or

  . a trust if a court within the United States is able to exercise primary
    supervision of the administration of the trust and one or more United
    States persons have the authority to control all substantial decisions of
    the trust.

"United States" means the United States of America, including the States and
the District of Columbia, and "possessions" of the United States including
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.

                                       33
<PAGE>

                 CONSIDERATIONS RELATING TO INDEXED SECURITIES

   We use the term "indexed securities" to mean debt securities, whose value
is linked to an underlying asset or index, as well as units that include any
debt security, warrant or purchase contract of this kind. Indexed securities
may present a high level of risk, and investors in certain indexed securities
may lose their entire investment. In addition, the treatment of indexed
securities for U.S. federal income tax purposes is often unclear due to the
absence of any authority specifically addressing the issues presented by any
particular indexed security. Thus, if you propose to invest in indexed
securities, you should independently evaluate the federal income tax
consequences of purchasing an indexed security that apply in your particular
circumstances. You should also read "United States Taxation" for a discussion
of U.S. tax matters.

 Investors in Indexed Securities Could Lose Principal or Interest

   The principal amount of an indexed debt security payable at maturity,
and/or the amount of interest payable on an indexed debt security on an
interest payment date, will be determined by reference to the price or value
of one or more securities of one or more issuers, currencies, commodities, any
other financial, economic or other measure or instrument, including the
occurrence or non-occurrence of any event or circumstance, and/or one or more
indices or baskets of any of these items. We refer to each of these as an
"index". The direction and magnitude of the change in the value of the
relevant index will determine the principal amount of an indexed debt security
payable at maturity and/or the amount of interest payable on an indexed debt
security on an interest payment date. The terms of a particular indexed debt
security may or may not include a guaranteed return of a percentage of the
face amount at maturity or a minimum interest rate. Thus, if you purchase an
indexed security, you may lose all or a portion of the principal you invest
and may receive no interest on your investment.

 The Issuer of a Security or Currency that Serves as an Index Could Take
 Actions that May Adversely Affect an Indexed Security

   The issuer of a security that serves as an index or part of an index for an
indexed debt security will have no involvement in the offer and sale of the
indexed security and no obligations to the holder of the indexed security. The
issuer may take actions, such as a merger or sale of assets, without regard to
the interests of the holder. Any of these actions could adversely affect the
value of a debt security indexed to that security or to an index of which that
security is a component.

   If the index for an indexed security includes a non-dollar currency or
other asset denominated in a non-dollar currency, the government that issues
that currency will also have no involvement in the offer and sale of the
indexed security and no obligations to the holder of the indexed security.
That government may take actions that could adversely affect the value of the
security. See "Considerations Relating to Securities Linked to a Foreign
Currency--Government Policy Can Adversely Affect Currency Exchange Rates and
an Investment in a Non-Dollar Security" for more information about these kinds
of government actions.

 An Indexed Security May Be Linked to a Volatile Index, Which Could Hurt Your
 Investment

   Some indices are highly volatile, which means that their value may change
significantly, up or down, over a short period of time. The amount of
principal or interest that can be expected to become payable on an indexed
security may vary substantially from time to time. Because the amounts payable
with respect to an indexed security are generally calculated based on the
value of the relevant index on a specified date or over a limited period of
time, volatility in the index increases the risk that the return on the
indexed security may be adversely affected by a fluctuation in the level of
the relevant index.

   The volatility of an index may be affected by political or economic events,
including governmental actions, or by the activities of participants in the
relevant markets. Any of these events or activities could adversely affect the
value of an indexed security.

                                      34
<PAGE>

 An Index to Which a Security Is Linked Could Be Changed or Become Unavailable

   Some indices compiled by us or our affiliates or third parties may consist
of or refer to several or many different securities, commodities or currencies
or other instruments or measures. The compiler of such an index typically
reserves the right to alter the composition of the index and the manner in
which the value of the index is calculated. An alteration may result in a
decrease in the value of or return on an indexed security that is linked to the
index. The indices for our indexed securities may include published indices of
this kind or customized indices developed by us or our affiliates in connection
with particular issues of indexed securities.

   A published index may become unavailable, or a customized index may become
impossible to calculate in the normal manner, due to events such as war,
natural disasters, cessation of publication of the index or a suspension or
disruption of trading in one or more securities, commodities or currencies or
other instruments or measures on which the index is based. If an index becomes
unavailable or impossible to calculate in the normal manner, the terms of a
particular indexed security may allow us to delay determining the amount
payable as principal or interest on an indexed debt security, or we may use an
alternative method to determine the value of the unavailable index. Alternative
methods of valuation are generally intended to produce a value similar to the
value resulting from reference to the relevant index. However, it is unlikely
that any alternative method of valuation we use will produce a value identical
to the value that the actual index would produce. If we use an alternative
method of valuation for a debt security linked to an index of this kind, the
value of the security, or the rate of return on it, may be lower than it
otherwise would be.

   Some indexed securities are linked to indices that are not commonly used or
that have been developed only recently. The lack of a trading history may make
it difficult to anticipate the volatility or other risks associated with an
indexed security of this kind. In addition, trading in these indices or their
underlying stocks, commodities or currencies or other instruments or measures,
or options or futures contracts on these stocks, commodities or currencies or
other instruments or measures, may be limited, which could increase their
volatility and decrease the value of the related indexed securities or the
rates of return on them.

 Information About Indices May Not Be Indicative of Future Performance

   If we issue an indexed security, we may include historical information about
the relevant index in the applicable prospectus supplement. Any information
about indices that we may provide will be furnished as a matter of information
only, and you should not regard the information as indicative of the range of,
or trends in, fluctuations in the relevant index that may occur in the future.

                                       35
<PAGE>

       CONSIDERATIONS RELATING TO SECURITIES LINKED TO A FOREIGN CURRENCY

   If you intend to invest in a debt security whose principal and/or interest
is payable in a currency other than U.S. dollars, you should consult your own
financial and legal advisors as to the currency risks entailed by your
investment. Securities of this kind are not an appropriate investment for
investors who are unsophisticated with respect to foreign currency
transactions.

   The information in this prospectus is directed primarily to investors who
are U.S. residents. Investors who are not U.S. residents should consult their
own financial and legal advisors about currency-related risks particular to
their investment.

 An Investment in a Non-Dollar Security Involves Currency-Related Risks

   An investment in a debt security with a specified currency other than U.S.
dollars entails significant risks that are not associated with a similar
investment in a security payable solely in U.S. dollars. These risks include
the possibility of significant changes in rates of exchange between the U.S.
dollar and the various non-dollar currencies or composite currencies and the
possibility of the imposition or modification of foreign exchange controls or
other conditions by either the U.S. or non-U.S. governments. These risks
generally depend on factors over which we have no control, such as economic and
political events and the supply of and demand for the relevant currencies in
the global markets.

 Changes in Currency Exchange Rates Can Be Volatile and Unpredictable

   Rates of exchange between the U.S. dollar and many other currencies have
been highly volatile, and this volatility may continue and perhaps spread to
other currencies in the future. Fluctuations in currency exchange rates could
adversely affect an investment in a security denominated in a specified
currency other than U.S. dollars. Depreciation of the specified currency
against the U.S. dollar could result in a decrease in the U.S. dollar-
equivalent value of payments on the security, including the principal payable
at maturity or settlement value payable upon exercise. That in turn could cause
the market value of the security to fall. Depreciation of the specified
currency against the U.S. dollar could result in a loss to the investor on a
U.S. dollar basis.

 Government Policy Can Adversely Affect Currency Exchange Rates and an
 Investment in a Non-Dollar Security

   Currency exchange rates can either float or be fixed by sovereign
governments. From time to time, governments use a variety of techniques, such
as intervention by a country's central bank or imposition of regulatory
controls or taxes, to affect the exchange rate of their currencies. Governments
may also issue a new currency to replace an existing currency or alter the
exchange rate or exchange characteristics by devaluation or revaluation of a
currency. Thus, a special risk in purchasing non-U.S. dollar-denominated
securities is that their U.S. dollar-equivalent yields or payouts could be
significantly and unpredictably affected by governmental actions. Even in the
absence of governmental action directly affecting currency exchange rates,
political or economic developments in the country issuing the specified
currency for a non-dollar security or elsewhere could lead to significant and
sudden changes in the exchange rate between the dollar and the specified
currency. These changes could affect the U.S. dollar-equivalent value of the
security as participants in the global currency markets move to buy or sell the
specified currency or U.S. dollars in reaction to these developments.

   Governments have imposed from time to time and may in the future impose
exchange controls or other conditions with respect to the exchange or transfer
of a specified currency that could affect exchange rates as well as the
availability of a specified currency for a security at its maturity or on any
other payment date. In addition, the ability of a holder to move currency
freely out of the country in which payment in the currency is received or to
convert the currency at a freely determined market rate could be limited by
governmental actions.

                                       36
<PAGE>

 Non-Dollar Securities Will Permit Us to Make Payments in Dollars or Delay
 Payment If We Are Unable to Obtain the Specified Currency

   Securities payable in a currency other than U.S. dollars will provide that,
if the other currency is subject to convertibility, transferability, market
disruption or other conditions affecting its availability at or about the time
when a payment on the securities comes due because of circumstances beyond our
control, we will be entitled to make the payment in U.S. dollars or delay
making the payment. These circumstances could include the imposition of
exchange controls or our inability to obtain the other currency because of a
disruption in the currency markets. If we made payment in U.S. dollars, the
exchange rate we would use would be determined in the manner described under
"Description of Debt Securities We May Offer--Payment Mechanics for Debt
Securities in Registered Form--How We Will Make Payments Due in Other
Currencies--When the Specified Currency Is Not Available". A determination of
this kind may be based on limited information and would involve significant
discretion on the part of our foreign exchange rate agent. As a result, the
value of the payment in dollars an investor would receive on the payment date
may be less than the value of the payment the investor would have received in
the other currency if it had been available and may be zero. In addition, a
government may impose extraordinary taxes on transfers of a currency. If that
happens, we will be entitled to deduct these taxes from any payment on
securities payable in that currency.

 We Will Not Adjust Non-Dollar Securities to Compensate for Changes in
 Currency Exchange Rates

   Except as described above, we will not make any adjustment or change in the
terms of a debt security payable in a currency other than U.S. dollars in the
event of any change in exchange rates for that currency, whether in the event
of any devaluation, revaluation or imposition of exchange or other regulatory
controls or taxes or in the event of other developments affecting that
currency, the U.S. dollar or any other currency. Consequently, investors in
non-dollar debt securities will bear the risk that their investment may be
adversely affected by these types of events.

 In a Lawsuit for Payment on a Non-Dollar Security, an Investor May Bear
 Currency Exchange Risk

   Our debt securities will be governed by New York law. Under Section 27 of
the New York Judiciary Law, a state court in the State of New York rendering a
judgment on a security denominated in a currency other than U.S. dollars would
be required to render the judgment in the specified currency; however, the
judgment would be converted into U.S. dollars at the exchange rate prevailing
on the date of entry of the judgment. Consequently, in a lawsuit for payment
on a security denominated in a currency other than U.S. dollars, investors
would bear currency exchange risk until judgment is entered, which could be a
long time.

   In courts outside of New York, investors may not be able to obtain judgment
in a specified currency other than U.S. dollars. For example, a judgment for
money in an action based on a non-dollar security in many other U.S. federal
or state courts ordinarily would be enforced in the United States only in U.S.
dollars. The date used to determine the rate of conversion of the currency in
which any particular security is denominated into U.S. dollars will depend
upon various factors, including which court renders the judgment.

 Information About Exchange Rates May Not Be Indicative of Future Performance

   If we issue a debt security denominated in a specified currency other than
U.S. dollars, we may include in the applicable prospectus supplement a
currency supplement that provides information about historical exchange rates
for the specified currency. Any information about exchange rates that we may
provide will be furnished as a matter of information only, and you should not
regard the information as indicative of the range of, or trends in,
fluctuations in currency exchange rates that may occur in the future. That
rate will likely differ from the exchange rate used under the terms that apply
to a particular debt security.

                                      37
<PAGE>

                             UNITED STATES TAXATION

   This section describes the material United States federal income tax
consequences of owning the debt securities we are offering. It is the opinion
of Sullivan & Cromwell, special tax counsel to Universal Corporation. It
applies to you only if you acquire debt securities in the offering or offerings
contemplated by this prospectus and you hold your debt securities as capital
assets for tax purposes. This section does not apply to you if you are a member
of a class of holders subject to special rules, such as:

  . a dealer in securities or currencies,

  . a trader in securities that elects to use a mark-to-market method of
    accounting for your securities holdings,

  . a bank,

  . a life insurance company,

  . a tax-exempt organization,

  . a person that owns debt securities that are a hedge or that are hedged
    against interest rate or currency risks,

  . a person that owns debt securities as part of a straddle or conversion
    transaction for tax purposes, or

  . a person whose functional currency for tax purposes is not the U.S.
    dollar.

This section deals only with debt securities that are due to mature 30 years or
less from the date on which they are issued. The United States federal income
tax consequences of owning debt securities that are due to mature more than 30
years from their date of issue will be discussed in an applicable prospectus
supplement or pricing supplement. This section is based on the Internal Revenue
Code of 1986, as amended, its legislative history, existing and proposed
regulations under the Internal Revenue Code, published rulings and court
decisions, all as currently in effect. These laws are subject to change,
possibly on a retroactive basis.

    Please consult your own tax advisor concerning the consequences of owning
 these debt securities in your particular circumstances under the Code and
 the laws of any other taxing jurisdiction.


United States Holders

   This subsection describes the tax consequences to a United States holder.
You are a United States holder if you are a beneficial owner of a debt security
and you are:

  . a citizen or resident of the United States,

  . a domestic corporation,

  . an estate whose income is subject to United States federal income tax
    regardless of its source, or

  . a trust if a United States court can exercise primary supervision over
    the trust's administration and one or more United States persons are
    authorized to control all substantial decisions of the trust.

If you are not a United States holder, this section does not apply to you and
you should refer to "United States Alien Holders" below.

 Payments of Interest

   Except as described below in the case of interest on a discount debt
security that is not qualified stated interest each as defined below under "--
Original Issue Discount--General", you will be taxed on any

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interest on your debt security, whether payable in U.S. dollars or a foreign
currency, including a composite currency or basket of currencies other than
U.S. dollars, as ordinary income at the time you receive the interest or when
it accrues, depending on your method of accounting for tax purposes.

   Cash Basis Taxpayers. If you are a taxpayer that uses the cash receipts and
disbursements method of accounting for tax purposes and you receive an interest
payment that is denominated in, or determined by reference to, a foreign
currency, you must recognize income equal to the U.S. dollar value of the
interest payment, based on the exchange rate in effect on the date of receipt,
regardless of whether you actually convert the payment into U.S. dollars.

   Accrual Basis Taxpayers. If you are a taxpayer that uses an accrual method
of accounting for tax purposes, you may determine the amount of income that you
recognize with respect to an interest payment denominated in, or determined by
reference to, a foreign currency by using one of two methods. Under the first
method, you will determine the amount of income accrued based on the average
exchange rate in effect during the interest accrual period or, with respect to
an accrual period that spans two taxable years, that part of the period within
the taxable year.

   If you elect the second method, you would determine the amount of income
accrued on the basis of the exchange rate in effect on the last day of the
accrual period, or, in the case of an accrual period that spans two taxable
years, the exchange rate in effect on the last day of the part of the period
within the taxable year. Additionally, under this second method, if you receive
a payment of interest within five business days of the last day of your accrual
period or taxable year, you may instead translate the interest accrued into
U.S. dollars at the exchange rate in effect on the day that you actually
receive the interest payment. If you elect the second method it will apply to
all debt instruments that you hold at the beginning of the first taxable year
to which the election applies and to all debt instruments that you subsequently
acquire. You may not revoke this election without the consent of the Internal
Revenue Service.

   When you actually receive an interest payment, including a payment
attributable to accrued but unpaid interest upon the sale or retirement of your
debt security, denominated in, or determined by reference to, a foreign
currency for which you accrued an amount of income, you will recognize ordinary
income or loss measured by the difference, if any, between the exchange rate
that you used to accrue interest income and the exchange rate in effect on the
date of receipt, regardless of whether you actually convert the payment into
U.S. dollars.

 Original Issue Discount

   General. If you own a debt security, other than a short-term debt security
with a term of one year or less, it will be treated as a discount debt security
issued at an original issue discount if the amount by which the debt security's
stated redemption price at maturity exceeds its issue price is more than a de
minimis amount. Generally, a debt security's issue price will be the first
price at which a substantial amount of debt securities included in the issue of
which the debt security is a part is sold to persons other than bond houses,
brokers, or similar persons or organizations acting in the capacity of
underwriters, placement agents or wholesalers. A debt security's stated
redemption price at maturity is the total of all payments provided by the debt
security that are not payments of qualified stated interest. Generally, an
interest payment on a debt security is qualified stated interest if it is one
of a series of stated interest payments on a debt security that are
unconditionally payable at least annually at a single fixed rate, with certain
exceptions for lower rates paid during some periods, applied to the outstanding
principal amount of the debt security. There are special rules for variable
rate debt securities that are discussed under "--Variable Rate Debt
Securities".

   In general, your debt security is not a discount debt security if the amount
by which its stated redemption price at maturity exceeds its issue price is
less than the de minimis amount of 1/4 of 1 percent of its stated redemption
price at maturity multiplied by the number of complete years to its maturity.
Your debt security will have de minimis original issue discount if the amount
of the excess is less than the de minimis amount. If

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your debt security has de minimis original issue discount, you must include the
de minimis amount in income as stated principal payments are made on the debt
security, unless you make the election described below under "--Election to
Treat All Interest as Original Issue Discount". You can determine the
includible amount with respect to each such payment by multiplying the total
amount of your debt security's de minimis original issue discount by a fraction
equal to:

  . the amount of the principal payment made divided by:

  . the stated principal amount of the debt security.

   Generally, if your discount debt security matures more than one year from
its date of issue, you must include original issue discount in income before
you receive cash attributable to that income. The amount of OID that you must
include in income is calculated using a constant-yield method, and generally
you will include increasingly greater amounts of OID in income over the life of
your debt security. More specifically, you can calculate the amount of OID that
you must include in income by adding the daily portions of OID with respect to
your discount debt security for each day during the taxable year or portion of
the taxable year that you hold your discount debt security. You can determine
the daily portion by allocating to each day in any accrual period a pro rata
portion of the OID allocable to that accrual period. You may select an accrual
period of any length with respect to your discount debt security and you may
vary the length of each accrual period over the term of your discount debt
security. However, no accrual period may be longer than one year and each
scheduled payment of interest or principal on the discount debt security must
occur on either the first or final day of an accrual period.

   You can determine the amount of OID allocable to an accrual period by:

  . multiplying your discount debt security's adjusted issue price at the
    beginning of the accrual period by your debt security's yield to
    maturity, and then

  . subtracting from this figure the sum of the payments of qualified stated
    interest on your debt security allocable to the accrual period.

You must determine the discount debt security's yield to maturity on the basis
of compounding at the close of each accrual period and adjusting for the length
of each accrual period. Further, you determine your discount debt security's
adjusted issue price at the beginning of any accrual period by:

  . adding your discount debt security's issue price and any accrued OID for
    each prior accrual period, and then

  . subtracting any payments previously made on your discount debt security
    that were not qualified stated interest payments.

If an interval between payments of qualified stated interest on your discount
debt security contains more than one accrual period, then, when you determine
the amount of OID allocable to an accrual period, you must allocate the amount
of qualified stated interest payable at the end of the interval, including any
qualified stated interest that is payable on the first day of the accrual
period immediately following the interval, pro rata to each accrual period in
the interval based on their relative lengths. In addition, you must increase
the adjusted issue price at the beginning of each accrual period in the
interval by the amount of any qualified stated interest that has accrued prior
to the first day of the accrual period but that is not payable until the end of
the interval. You may compute the amount of OID allocable to an initial short
accrual period by using any reasonable method if all other accrual periods,
other than a final short accrual period, are of equal length.

   The amount of OID allocable to the final accrual period is equal to the
difference between:

  . the amount payable at the maturity of your debt security, other than any
    payment of qualified stated interest, and

  . your debt security's adjusted issue price as of the beginning of the
    final accrual period.

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   Acquisition Premium. If you purchase your debt security for an amount that
is less than or equal to the sum of all amounts, other than qualified stated
interest, payable on your debt security after the purchase date but is greater
than the amount of your debt security's adjusted issue price, as determined
above under "--General", the excess is acquisition premium. If you do not make
the election described below under "--Election to Treat All Interest as
Original Issue Discount", then you must reduce the daily portions of OID by an
amount equal to:

  . the excess of your adjusted basis in the debt security immediately after
    purchase over the adjusted issue price of the debt security divided by:

  . the excess of the sum of all amounts payable, other than qualified stated
    interest, on the debt security after the purchase date over the debt
    security's adjusted issue price.

   Market Discount. You will be treated as if you purchased your debt security,
other than a short-term debt security, at a market discount, and your debt
security will be a market discount debt security if:

  . you purchase your debt security for less than its issue price as
    determined above under "--General" and

  . the difference between the debt security's stated redemption price at
    maturity or, in the case of a discount debt security, the debt security's
    revised issue price, and the price you paid for your debt security is
    equal to or greater than of 1 percent of your debt security's stated
    redemption price at maturity or revised issue price, respectively,
    multiplied by the number of complete years to the debt security's
    maturity. To determine the revised issue price of your debt security for
    these purposes, you generally add any OID that has accrued on your debt
    security to its issue price.

   If your debt security's stated redemption price at maturity or, in the case
of a discount debt security, its revised issue price, does not exceed the price
you paid for the debt security by 1/4 of 1 percent multiplied by the number of
complete years to the debt security's maturity, the excess constitutes de
minimis market discount, and the rules discussed below are not applicable to
you.

   You must treat any gain you recognize on the maturity or disposition of your
market discount debt security as ordinary income to the extent of the accrued
market discount on your debt security. Alternatively, you may elect to include
market discount in income currently over the life of your debt security. If you
make this election, it will apply to all debt instruments with market discount
that you acquire on or after the first day of the first taxable year to which
the election applies. You may not revoke this election without the consent of
the Internal Revenue Service. If you own a market discount debt security and do
not make this election, you will generally be required to defer deductions for
interest on borrowings allocable to your debt security in an amount not
exceeding the accrued market discount on your debt security until the maturity
or disposition of your debt security.

   You will accrue market discount on your market discount debt security on a
straight-line basis unless you elect to accrue market discount using a
constant-yield method. If you make this election, it will apply only to the
debt security with respect to which it is made and you may not revoke it.

   If you are an accrual-basis taxpayer, you should be aware that legislation
has been proposed that would require you to include market discount in income
currently over the life of your debt security, subject to certain limitations.
We do not yet know whether any such proposal will be enacted or when it will
become effective if enacted.

   Pre-Issuance Accrued Interest. An election may be made to decrease the issue
price of your debt security by the amount of pre-issuance accrued interest if:

  . a portion of the initial purchase price of your debt security is
    attributable to pre-issuance accrued interest,

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  . the first stated interest payment on your debt security is to be made
    within one year of your debt security's issue date, and

  . the payment will equal or exceed the amount of pre-issuance accrued
    interest.

   If this election is made, a portion of the first stated interest payment
will be treated as a return of the excluded pre-issuance accrued interest and
not as an amount payable on your debt security.

   Debt Securities Subject to Contingencies Including Optional Redemption. Your
debt security is subject to a contingency if it provides for an alternative
payment schedule or schedules applicable upon the occurrence of a contingency
or contingencies, other than a remote or incidental contingency, whether such
contingency relates to payments of interest or of principal. In such a case,
you must determine the yield and maturity of your debt security by assuming
that the payments will be made according to the payment schedule most likely to
occur if:

  . the timing and amounts of the payments that comprise each payment
    schedule are known as of the issue date and

  . one of such schedules is significantly more likely than not to occur. If
    there is no single payment schedule that is significantly more likely
    than not to occur, other than because of a mandatory sinking fund, you
    must include income on your debt security in accordance with the general
    rules that govern contingent payment obligations. These rules will be
    discussed in the applicable prospectus supplement or pricing supplement.

   Notwithstanding the general rules for determining yield and maturity, if
your debt security is subject to contingencies, and either you or we have an
unconditional option or options that, if exercised, would require payments to
be made on the debt security under an alternative payment schedule or
schedules, then:

  . in the case of an option or options that we may exercise, we will be
    deemed to exercise or not exercise an option or combination of options in
    the manner that minimizes the yield on your debt security and

  . in the case of an option or options that you may exercise, you will be
    deemed to exercise or not exercise an option or combination of options in
    the manner that maximizes the yield on your debt security.

If both you and we hold options described in the preceding sentence, those
rules will apply to each option in the order in which they may be exercised.
You may determine the yield on your debt security for the purposes of those
calculations by using any date on which your debt security may be redeemed or
repurchased as the maturity date and the amount payable on the date that you
chose in accordance with the terms of your debt security as the principal
amount payable at maturity.

   If a contingency, including the exercise of an option, actually occurs or
does not occur contrary to an assumption made according to the above rules
then, except to the extent that a portion of your debt security is repaid as a
result of this change in circumstances and solely to determine the amount and
accrual of OID, you must redetermine the yield and maturity of your debt
security by treating your debt security as having been retired and reissued on
the date of the change in circumstances for an amount equal to your debt
security's adjusted issue price on that date.

   Election to Treat All Interest as Original Issue Discount. You may elect to
include in gross income all interest that accrues on your debt security using
the constant-yield method described above under "--General", with the
modifications described below. For purposes of this election, interest will
include stated interest, OID, de minimis original issue discount, market
discount, de minimis market discount and unstated interest, as adjusted by any
amortizable bond premium, described below under "--Debt Securities Purchased at
a Premium", or acquisition premium.

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   If you make this election for your debt security, then, when you apply the
constant-yield method:

  . the issue price of your debt security will equal your cost,

  . the issue date of your debt security will be the date you acquired it,
    and

  . no payments on your debt security will be treated as payments of
    qualified stated interest.

Generally, this election will apply only to the debt security for which you
make it; however, if the debt security has amortizable bond premium, you will
be deemed to have made an election to apply amortizable bond premium against
interest for all debt instruments with amortizable bond premium, other than
debt instruments the interest on which is excludible from gross income, that
you hold as of the beginning of the taxable year to which the election applies
or any taxable year thereafter. Additionally, if you make this election for a
market discount debt security, you will be treated as having made the election
discussed above under "Market Discount" to include market discount in income
currently over the life of all debt instruments that you currently own or later
acquire. You may not revoke any election to apply the constant-yield method to
all interest on a debt security or the deemed elections with respect to
amortizable bond premium or market discount debt securities without the consent
of the Internal Revenue Service.

 Variable Rate Debt Securities

   Your debt security will be a variable rate debt security if:

  . your debt security's issue price does not exceed the total noncontingent
    principal payments by more than the lesser of:

   1.  .015 multiplied by the product of the total noncontingent principal
       payments and the number of complete years to maturity from the issue
       date, or

   2.  15 percent of the total noncontingent principal payments; and

  . your debt security provides for stated interest, compounded or paid at
    least annually, only at:

   1.  one or more qualified floating rates,

   2.  a single fixed rate and one or more qualified floating rates,

   3.  a single objective rate, or

   4.  a single fixed rate and a single objective rate that is a qualified
       inverse floating rate.

Your debt security will have a variable rate that is a qualified floating rate
if:

  . variations in the value of the rate can reasonably be expected to measure
    contemporaneous variations in the cost of newly borrowed funds in the
    currency in which your debt security is denominated; or

  . the rate is equal to such a rate multiplied by either:

   1.  a fixed multiple that is greater than 0.65 but not more than 1.35 or

   2.  a fixed multiple greater than 0.65 but not more than 1.35, increased
       or decreased by a fixed rate; and

  . the value of the rate on any date during the term of your debt security
    is set no earlier than three months prior to the first day on which that
    value is in effect and no later than one year following that first day.

   If your debt security provides for two or more qualified floating rates that
are within 0.25 percentage points of each other on the issue date or can
reasonably be expected to have approximately the same values throughout the
term of the debt security, the qualified floating rates together constitute a
single qualified floating rate.

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   Your debt security will not have a qualified floating rate, however, if the
rate is subject to certain restrictions (including caps, floors, governors, or
other similar restrictions) unless such restrictions are fixed throughout the
term of the debt security or are not reasonably expected to significantly
affect the yield on the debt security.

   Your debt security will have a variable rate that is a single objective rate
if:

  . the rate is not a qualified floating rate,

  . the rate is determined using a single, fixed formula that is based on
    objective financial or economic information that is not within the
    control of or unique to the circumstances of the issuer or a related
    party, and

  . the value of the rate on any date during the term of your debt security
    is set no earlier than three months prior to the first day on which that
    value is in effect and no later than one year following that first day.

   Your debt security will not have a variable rate that is an objective rate,
however, if it is reasonably expected that the average value of the rate during
the first half of your debt security's term will be either significantly less
than or significantly greater than the average value of the rate during the
final half of your debt security's term.

   An objective rate as described above is a qualified inverse floating rate
if:

  . the rate is equal to a fixed rate minus a qualified floating rate and

  . the variations in the rate can reasonably be expected to inversely
    reflect contemporaneous variations in the cost of newly borrowed funds.

   Your debt security will also have a single qualified floating rate or an
objective rate if interest on your debt security is stated at a fixed rate for
an initial period of one year or less followed by either a qualified floating
rate or an objective rate for a subsequent period, and either:

  . the fixed rate and the qualified floating rate or objective rate have
    values on the issue date of the debt security that do not differ by more
    than 0.25 percentage points or

  . the value of the qualified floating rate or objective rate is intended to
    approximate the fixed rate.

   In general, if your variable rate debt security provides for stated interest
at a single qualified floating rate or objective rate, or one of those rates
after a single fixed rate for an initial period, all stated interest on your
debt security is qualified stated interest. In this case, the amount of OID, if
any, is determined by using, in the case of a qualified floating rate or
qualified inverse floating rate, the value as of the issue date of the
qualified floating rate or qualified inverse floating rate, or, for any other
objective rate, a fixed rate that reflects the yield reasonably expected for
your debt security.

   If your variable rate debt security does not provide for stated interest at
a single qualified floating rate or a single objective rate, and also does not
provide for interest payable at a fixed rate other than a single fixed rate for
an initial period, you generally must determine the interest and OID accruals
on your debt security by:

  . determining a fixed rate substitute for each variable rate provided under
    your variable rate debt security,

  . constructing the equivalent fixed rate debt instrument, using the fixed
    rate substitute described above,

  . determining the amount of qualified stated interest and OID with respect
    to the equivalent fixed rate debt instrument, and

  . adjusting for actual variable rates during the applicable accrual period.

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When you determine the fixed rate substitute for each variable rate provided
under the variable rate debt security, you generally will use the value of each
variable rate as of the issue date or, for an objective rate that is not a
qualified inverse floating rate, a rate that reflects the reasonably expected
yield on your debt security.

   If your variable rate debt security provides for stated interest either at
one or more qualified floating rates or at a qualified inverse floating rate,
and also provides for stated interest at a single fixed rate other than at a
single fixed rate for an initial period, you generally must determine interest
and OID accruals by using the method described in the previous paragraph.
However, your variable rate debt security will be treated, for purposes of the
first three steps of the determination, as if your debt security had provided
for a qualified floating rate, or a qualified inverse floating rate, rather
than the fixed rate. The qualified floating rate, or qualified inverse floating
rate, that replaces the fixed rate must be such that the fair market value of
your variable rate debt security as of the issue date approximates the fair
market value of an otherwise identical debt instrument that provides for the
qualified floating rate, or qualified inverse floating rate, rather than the
fixed rate.

 Short-Term Debt Securities

   In general, if you are an individual or other cash basis United States
holder of a short-term debt security, you are not required to accrue OID, as
specially defined below for the purposes of this paragraph, for United States
federal income tax purposes unless you elect to do so. However, you may be
required to include any stated interest in income as you receive it. If you are
an accrual basis taxpayer, a taxpayer in a special class, including, but not
limited to, a regulated investment company, common trust fund, or a certain
type of pass-through entity, or a cash basis taxpayer who so elects, you will
be required to accrue OID on short-term debt securities on either a straight-
line basis or under the constant-yield method, based on daily compounding. If
you are not required and do not elect to include OID in income currently, any
gain you realize on the sale or retirement of your short-term debt security
will be ordinary income to the extent of the accrued OID, which will be
determined on a straight-line basis unless you make an election to accrue the
OID under the constant-yield method, through the date of sale or retirement.
However, if you are not required and do not elect to accrue OID on your short-
term debt securities, you will be required to defer deductions for interest on
borrowings allocable to your short-term debt securities in an amount not
exceeding the deferred income until the deferred income is realized.

   When you determine the amount of OID subject to these rules, you must
include all interest payments on your short-term debt security, including
stated interest, in your short-term debt security's stated redemption price at
maturity.

 Foreign Currency Discount Debt Securities

   If your discount debt security is denominated in, or determined by reference
to, a foreign currency, you must determine OID for any accrual period on your
discount debt security in the foreign currency and then translate the amount of
OID into U.S. dollars in the same manner as stated interest accrued by an
accrual basis United States holder, as described under "--United States
Holders". You may recognize ordinary income or loss when you receive an amount
attributable to OID in connection with a payment of interest or the sale or
retirement of your debt security.

 Debt Securities Purchased at a Premium

   If you purchase your debt security for an amount in excess of its principal
amount, you may elect to treat the excess as amortizable bond premium. If you
make this election, you will reduce the amount required to be included in your
income each year with respect to interest on your debt security by the amount
of amortizable bond premium allocable to that year, based on your debt
security's yield to maturity. If your debt security is denominated in, or
determined by reference to, a foreign currency, you will compute your
amortizable bond premium in units of the foreign currency and your amortizable
bond premium will reduce your interest income in units of the foreign currency.
Gain or loss recognized that is attributable to changes in exchange rates

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<PAGE>

between the time your amortized bond premium offsets interest income and the
time of the acquisition of your debt security is generally taxable as ordinary
income or loss. If you make an election to amortize bond premium, it will apply
to all debt instruments, other than debt instruments the interest on which is
excludible from gross income, that you hold at the beginning of the first
taxable year to which the election applies or that you thereafter acquire, and
you may not revoke it without the consent of the Internal Revenue Service. See
also "--Original Issue Discount--Election to Treat All Interest as Original
Issue Discount".

 Purchase, Sale and Retirement of the Debt Securities

   Your tax basis in your debt security will generally be the U.S. dollar cost,
as defined below, of your debt security, adjusted by:

  . adding any OID or market discount, de minimis original issue discount and
    de minimis market discount previously included in income with respect to
    your debt security, and then

  . subtracting any payments on your debt security that are not qualified
    stated interest payments and any amortizable bond premium applied to
    reduce interest on your debt security.

If you purchase your debt security with foreign currency, the U.S. dollar cost
of your debt security will generally be the U.S. dollar value of the purchase
price on the date of purchase. However, if you are a cash basis taxpayer, or an
accrual basis taxpayer if you so elect, and your debt security is traded on an
established securities market, as defined in the applicable Treasury
regulations, the U.S. dollar cost of your debt security will be the U.S. dollar
value of the purchase price on the settlement date of your purchase.

   You will generally recognize gain or loss on the sale or retirement of your
debt security equal to the difference between the amount you realize on the
sale or retirement and your tax basis in your debt security. If your debt
security is sold or retired for an amount in foreign currency, the amount you
realize will be the U.S. dollar value of such amount on:

  .the date payment is received, if you are a cash basis taxpayer and the
   debt securities are not traded on an established securities market, as
   defined in the applicable Treasury regulations,

  .the date of disposition, if you are an accrual basis taxpayer, or

  .the settlement date for the sale, if you are a cash basis taxpayer, or an
   accrual basis taxpayer that so elects, and the debt securities are traded
   on an established securities market, as defined in the applicable Treasury
   regulations.

You will recognize capital gain or loss when you sell or retire your debt
security, except to the extent:

  . described above under "--Original Issue Discount--Short-Term Debt
    Securities" or "--Market Discount",

  . attributable to accrued but unpaid interest,

  . the rules governing contingent payment obligations apply, or

  . attributable to changes in exchange rates as described below.

Capital gain of a noncorporate United States holder is generally taxed at a
maximum rate of 20% where the property is held more than one year.

   You must treat any portion of the gain or loss that you recognize on the
sale or retirement of a debt security as ordinary income or loss to the extent
attributable to changes in exchange rates. However, you take exchange gain or
loss into account only to the extent of the total gain or loss you realize on
the transaction.

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 Exchange of Amounts in Other Than U.S. Dollars

   If you receive foreign currency as interest on your debt security or on the
sale or retirement of your debt security, your tax basis in the foreign
currency will equal its U.S. dollar value when the interest is received or at
the time of the sale or retirement. If you purchase foreign currency, you
generally will have a tax basis equal to the U.S. dollar value of the foreign
currency on the date of your purchase. If you sell or dispose of a foreign
currency, including if you use it to purchase debt securities or exchange it
for U.S. dollars, any gain or loss recognized generally will be ordinary income
or loss.

 Indexed and Other Debt Securities

   The applicable prospectus supplement or pricing supplement will discuss any
special United States federal income tax rules with respect to debt securities
the payments on which are determined by reference to any index and other debt
securities that are subject to the rules governing contingent payment
obligations which are not subject to the rules governing variable rate debt
securities.

United States Alien Holders

   This subsection describes the tax consequences to a United States alien
holder. You are a United States alien holder if you are the beneficial owner of
a debt security and are, for United States federal income tax purposes:

  . a nonresident alien individual,

  . a foreign corporation,

  . a foreign partnership, or

  . an estate or trust that in either case is not subject to United States
    federal income tax on a net income basis on income or gain from a debt
    security.

If you are a United States holder, this section does not apply to you.

   This discussion assumes that the debt security or coupon is not subject to
the rules of Section 871(h)(4)(A) of the Internal Revenue Code, relating to
interest payments that are determined by reference to the income, profits,
changes in the value of property or other attributes of the debtor or a related
party.

   Under present United States federal income and estate tax law, and subject
to the discussion of backup withholding below, if you are a United States alien
holder of a debt security or coupon:

  . we and other payors will not be required to deduct United States
    withholding tax from payments of principal, premium, if any, and
    interest, including OID, to you if, in the case of interest:

   1. you do not actually or constructively own 10% or more of the total
      combined voting power of all classes of stock of Universal Corporation
      entitled to vote,

   2. you are not a controlled foreign corporation that is related to
      Universal Corporation through stock ownership, and in the case of a
      debt security other than a bearer debt security:

     a. you certify to us or a U.S. payor, under penalties of perjury, that
        you are not a United States holder and provide your name and
        address, or

     b. a non-U.S. securities clearing organization, bank or other
        financial institution that holds customers' securities in the
        ordinary course of its trade or business and holds the debt
        security certifies to us or a U.S. payor, under penalties of
        perjury, that a similar statement has been received from you by it
        or by a similar financial institution between it and you and
        furnishes the payor with a copy thereof,

   3. in the case of a bearer debt security, the debt security is offered,
      sold and delivered in compliance with the restrictions described above
      under "Considerations Relating to Securities Issued in Bearer Form--
      Limitations on Issuance of Bearer Debt Securities" and payments on the
      debt security are made in accordance with the procedures described
      therein, and

                                       47
<PAGE>

  . no deduction for any United States federal withholding tax will be made
    from any gain that you realize on the sale or exchange of your debt
    security or coupon.

   Further, a debt security or coupon held by an individual who at death is not
a citizen or resident of the United States will not be includible in the
individual's gross estate for United States federal estate tax purposes if:

  . the decedent did not actually or constructively own 10% or more of the
    total combined voting power of all classes of stock of Universal
    Corporation entitled to vote at the time of death and

  . the income on the debt security would not have been effectively connected
    with a United States trade or business of the decedent at the same time.

   If you receive a payment after December 31, 2000, recently finalized
Treasury regulations will apply. Under these final withholding regulations,
after December 31, 2000, you may use an alternative method to satisfy the
certification requirement described above. Additionally, if you are a partner
in a foreign partnership, after December 31, 2000, you, in addition to the
foreign partnership, must provide the certification described above and the
partnership must provide certain information. The Internal Revenue Service will
apply a look-through rule in the case of tiered partnerships.

Backup Withholding and Information Reporting

 United States Holders

   In general, if you are a noncorporate United States holder, we and other
payors are required to report to the Internal Revenue Service all payments of
principal, any premium and interest on your debt security, and the accrual of
OID on a discount debt security. In addition, the proceeds of the sale of your
debt security before maturity within the United States will be reported to the
Internal Revenue Service. Additionally, backup withholding at a rate of 31%
will apply to any payments, including payments of OID, if you fail to provide
an accurate taxpayer identification number, or you are notified by the Internal
Revenue Service that you have failed to report all interest and dividends
required to be shown on your federal income tax returns.

 United States Alien Holders

   You are generally exempt from backup withholding and information reporting
with respect to any payments of principal, premium or interest, including OID,
made by us and other payors provided that in the case of debt securities other
than bearer debt securities, you provide the certification described below, and
provided further that the payor does not have actual knowledge that you are a
United States person. We and other payors, however, may report payments of
interest on your debt securities on Internal Revenue Service Form 1042-S.

   In general, payment of the proceeds from the sale of debt securities to or
through a United States office of a broker is subject to both United States
backup withholding and information reporting. If, however, you are a United
States alien holder, you will not be subject to information reporting and
backup withholding if you certify as to your non-United States status, under
penalties of perjury, or otherwise establish an exemption. Payments of the
proceeds from the sale by a United States alien holder of a debt security made
to or through a foreign office of a broker will not be subject to information
reporting or backup withholding. However, information reporting, but not backup
withholding, may apply to a payment made outside the United States of the
proceeds of a sale of a debt security through an office outside the United
States if the broker is:

  . a United States person,

  . a controlled foreign corporation for United States tax purposes,

  . a foreign person 50% or more of whose gross income is effectively
    connected with a United States trade or business for a specified three-
    year period, or


                                       48
<PAGE>

  . with respect to payments made after December 31, 2000, a foreign
    partnership, if at any time during its tax year:

   -- one or more of its partners are "U.S. persons", as defined in U.S.
      Treasury regulations, who in the aggregate hold more than 50% of the
      income or capital interest in the partnership, or

   -- such foreign partnership is engaged in a United States trade or
      business unless the broker has documentary evidence in its records
      that you are a non-U.S. person and does not have actual knowledge that
      you are a U.S. person, or you otherwise establish an exemption.

                                       49
<PAGE>

                              PLAN OF DISTRIBUTION

                  Initial Offering and Sale of Debt Securities

   We may sell the debt securities from time to time in their initial offering
as follows:

  . through agents;

  . to dealers or underwriters;

  . directly to purchasers; or

  . through a combination of any of these methods of sale.

   The debt securities we distribute by any of these methods may be sold to the
public, in one or more transactions, either:

  . at a fixed price or prices, which may be changed;

  . at market prices prevailing at the time of sale;

  . at prices related to prevailing market prices; or

  . at negotiated prices.

   We may solicit offers to purchase debt securities directly from the public
from time to time. We may also designate agents from time to time to solicit
offers to purchase securities from the public on our behalf. The prospectus
supplement relating to any particular offering of debt securities will name any
agents designated to solicit offers, and will include information about any
commissions we may pay the agents, in that offering. Agents may be deemed to be
"underwriters" as that term is defined in the Securities Act.

   From time to time, we may sell debt securities to one or more dealers as
principals. The dealers, who may be deemed to be "underwriters" as that term is
defined in the Securities Act, may then resell those securities to the public.

   We may sell debt securities from time to time to one or more underwriters,
who would purchase the securities as principals for resale to the public,
either on a firm-commitment or best-efforts basis. If we sell debt securities
to underwriters, we will execute an underwriting agreement with them at the
time of sale and will name them in the applicable prospectus supplement. In
connection with those sales, underwriters may be deemed to have received
compensation from us in the form of underwriting discounts or commissions and
may also receive commissions from purchasers of the securities for whom they
may act as agents. Underwriters may resell the securities to or through
dealers, and those dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions from
purchasers for whom they may act as agents. The applicable prospectus
supplement will include information about any underwriting compensation we pay
to underwriters, and any discounts, concessions or commissions underwriters
allow to participating dealers, in connection with an offering of debt
securities.

   We may authorize underwriters, dealers and agents to solicit from third
parties offers to purchase debt securities under contracts providing for
payment and delivery on future dates. The third parties with whom we may enter
into contracts of this kind may include banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and
others. The applicable prospectus supplement will describe the material terms
of these contracts, including any conditions to the purchasers' obligations and
will include information about any commissions we may pay for soliciting these
contracts.

   Underwriters, dealers, agents and other persons may be entitled, under
agreements that they may enter into with us, to indemnification by us against
civil liabilities, including liabilities under the Securities Act of 1933.

   In connection with an offering, the underwriters may purchase and sell
securities in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriters of a greater number of
securities than they are

                                       50
<PAGE>

required to purchase in an offering. Stabilizing transactions consist of
certain bids or purchases made for the purpose of preventing or retarding a
decline in the market price of the securities while an offering is in progress.

   The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the underwriters have repurchased securities
sold by or for the account of that underwriter in stabilizing or short-covering
transactions.

   The underwriters, dealers and agents, as well as their associates, may be
customers of or lenders to, and may engage in transactions with and perform
services for, Universal Corporation.

                                       51
<PAGE>

                           VALIDITY OF THE SECURITIES

   The validity of the securities offered by this prospectus will be passed
upon for Universal Corporation by Sullivan & Cromwell, Washington, D.C. The
opinion of Sullivan & Cromwell was based on certain assumptions about future
actions required to be taken by us and the trustee in connection with the
issuance and sale of each security, about the specific terms of each security
and about other matters that may affect the validity of the securities but
which could not be ascertained on the date of that opinion.

   In connection with particular offerings of the securities in the future, the
validity of those securities may be passed upon for us by Sullivan & Cromwell
or other counsel named in the applicable prospectus supplement. Certain legal
matters will be passed upon for the underwriters by Cahill Gordon & Reindel,
New York, New York or other counsel named in the applicable prospectus
supplement. Sullivan & Cromwell and Cahill Gordon & Reindel will, and such
other counsel may, rely as to matters governed by Virginia law on the opinion
of George C. Freeman, III, Esq., Assistant Secretary of Universal Corporation
or other Virginia counsel to us.

                                    EXPERTS

   Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual report on form 10-K for the year
ended June 30, 1999, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.

                  CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE
                    SECURITIES LITIGATION REFORM ACT OF 1995

   We have included or incorporated by reference in this prospectus statements
that may constitute "forward-looking statements" within the meaning of the safe
harbor provisions of The Private Securities Litigation Reform Act of 1995.
These forward-looking statements are not historical facts but instead represent
only our belief regarding future events, many of which, by their nature, are
inherently uncertain and outside of our control. It is possible that our actual
results may differ, possibly materially, from the anticipated results indicated
in these forward-looking statements.

   Information regarding important factors that could cause actual results to
differ, perhaps materially, from those in our forward-looking statements is
contained under the caption "Item 1: Business -- Certain Factors That May
Affect Our Business" in our annual report on Form 10-K for the fiscal year
ended June 30, 1999, which is incorporated in this prospectus by reference. See
"Available Information" above for information about how to obtain a copy of
this annual report.

                                       52
<PAGE>

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

 No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. You must not rely on
any unauthorized information or representations. This prospectus is an offer to
sell only the shares offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.




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








                                  $400,000,000

                             Universal Corporation

                                Debt Securities

                        [LOGO OF UNIVERSAL CORPORATION]






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

- --------------------------------------------------------------------------------
<PAGE>

                                    PART II

                    INFORMATION NOT REQUIRED IN A PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

   The following is a statement of the expenses (all of which are estimated
other than the SEC registration fee) to be incurred by the Registrant in
connection with the distribution of the securities registered under this
registration statement:

<TABLE>
<CAPTION>
                                                                       Amount
                                                                       To Be
                                                                        Paid
                                                                      --------
<S>                                                                   <C>
SEC registration fee................................................. $105,600
Legal fees and expenses.............................................. $175,000
Fees and expenses of qualification under state securities laws
 (including legal fees).............................................. $  5,000
Accounting fees and expenses......................................... $ 50,000
Printing fees........................................................ $ 35,000
Rating agency fees................................................... $260,000
Trustee's fees and expenses.......................................... $ 23,000
Miscellaneous........................................................ $  6,400
                                                                      --------
  Total.............................................................. $660,000
                                                                      ========
</TABLE>

Item 15. Indemnification of Directors and Officers.

   Article 10 of the Virginia Stock Corporation Act allows, in general, for
indemnification, in certain circumstances, by a corporation of any person
threatened with or made a party to any action, suit or proceeding by reason of
the fact that he or she is, or was, a director, officer, employee or agent of
such corporation. Indemnification is also authorized with respect to a criminal
action or proceeding where the person had no reasonable cause to believe that
his conduct was unlawful. Article 9 of the Virginia Stock Corporation Act
provides limitations on damages payable by officers and directors, except in
cases of willful misconduct or knowing violation of criminal law or any federal
or state securities law.

   Article VIII of the Company's Restated Articles of Incorporation provides
for mandatory indemnification of any director or officer of the Company who is
or was a party to any proceeding by reason of the fact that he is or was a
director or officer of the Company against all liabilities and expenses
incurred in the proceeding, except such liabilities and expenses as are
incurred because of such director's or officer's willful misconduct or knowing
violation of the criminal law.

   The Company's Restated Articles of Incorporation also provide that in every
instance permitted under Virginia corporate law in effect form time to time,
the liability of a director or officer of the Company to the Company or its
shareholders shall not exceed one dollar.

   The Company maintains a standard policy of officers' and directors'
liability insurance.

   In the Underwriting Agreement and the Distribution Agreement, forms of which
are filed as Exhibits 1.1 and 1.2 hereto, the Underwriters and Agents will
agree to indemnify, under certain conditions, the Company, its directors,
certain of its officers and persons who control the Company within the meaning
of the Securities Act of 1933 against certain liabilities.

Item 16. Exhibits and Financial Statement Schedules.

 (a) Exhibits:

   A list of the exhibits included as part of this Registration Statement is
set forth in the Exhibit Index which immediately precedes such exhibits and is
incorporated by reference.

                                      II-1
<PAGE>

 (b) Financial Statement Schedules:

   All schedules have been omitted because they are not applicable or not
required or the required information is included in the financial statements or
notes thereto which are incorporated by reference into this Registration
Statement.

Item 17. Undertakings.

   The undersigned Registrant hereby undertakes:

   (a)(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

       (i) To include any prospectus required by Section 10(a)(3) of the
    Securities Act of 1933;

       (ii) To reflect in the prospectus any fact or events arising after
    the effective date of this registration statement (or the most recent
    post-effective amendment thereof) which, individually or in the
    aggregate, represent a fundamental change in the information set forth
    in this registration statement; notwithstanding the foregoing, any
    increase or decrease in volume of securities offered (if the total
    dollar value of securities offered would not exceed that which was
    registered) and any deviation from the low or high end of the estimated
    maximum offering range may be reflected in the form of prospectus filed
    with the Securities and Exchange Commission pursuant to Rule 424(b) if,
    in the aggregate, the changes in volume and price represent no more
    than 20 percent change in the maximum aggregate offering price set
    forth in the "Calculation of Registration Fee" table in the effective
    registration statement; and

       (iii) To include any material information with respect to the plan
    of distribution not previously disclosed in the registration statement
    or any material change to such information in the registration
    statement;

     (2) That, for the purpose of determining any liability under the
  Securities Act of 1933, each such post-effective amendment shall be deemed
  to be a new registration statement relating to the securities offered
  therein, and the offering of such securities at that time shall be deemed
  to be the initial bona fide offering thereof.

     (3) To remove from registration by means of a post-effective amendment
  any of the securities being registered which remain unsold at the
  termination of the offering.

     (4) That, for purposes of determining any liability under the Securities
  Act of 1933, each filing of the Registrant's annual report pursuant to
  Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
  is incorporated by reference in the registration statement shall be deemed
  to be a new registration statement relating to the securities offered
  therein, and the offering of such securities at that time shall be deemed
  to be the initial bona fide offering thereof.

   (b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted against the Registrant by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.

                                      II-2
<PAGE>

   (c) The undersigned Registrant hereby undertakes to file an application for
the purpose of determining the eligibility of any trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act, if necessary.

                                      II-3
<PAGE>

                                   SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Universal Corporation, certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Richmond, Commonwealth of Virginia,
on August 11, 2000.

                                          Universal Corporation

                                                   /s/ Henry H. Harrell
                                          By: _________________________________
                                                      Henry H. Harrell
                                                Chairman and Chief Executive
                                                           Officer

                               POWER OF ATTORNEY

   KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints each of Henry H. Harrell and Allen B.
King, acting individually, as his attorney-in-fact and agent, with full power
of substitution, for him in any and all capacities, to sign the registration
statement on Form S-3 of Universal Corporation and any and all amendments
thereto under the Securities Act of 1933, including any and all pre-effective
or post-effective amendments, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as he might or could
do in person, and hereby ratifies, approves and confirms all that his said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.

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

<TABLE>
<CAPTION>
                Name                                Title                      Date
                ----                                -----                      ----

<S>                                  <C>                                  <C>
        /s/ Henry H. Harrell         Chairman and Chief Executive Officer August 10, 2000
____________________________________  and Director (Principal Executive
          Henry H. Harrell            Officer)

       /s/ Hartwell H. Roper         Vice President and Chief Financial   August 10, 2000
____________________________________  Officer (Principal Financial
         Hartwell H. Roper            Officer)

      /s/ William J. Coronado        Vice President and Controller        August 10, 2000
____________________________________  (Principal Accounting Officer)
        William J. Coronado

        /s/ William W. Berry         Director                             August 10, 2000
____________________________________
          William W. Berry

       /s/ Ronald E. Carrier         Director                             August 10, 2000
____________________________________
         Ronald E. Carrier

</TABLE>

                                      II-4
<PAGE>

<TABLE>
<CAPTION>
                Name                                Title                      Date
                ----                                -----                      ----

<S>                                  <C>                                  <C>
    /s/ Lawrence S. Eagleburger      Director                             August 10, 2000
____________________________________
      Lawrence S. Eagleburger

                                     Director                             August 10, 2000
____________________________________
         Joseph C. Farrell

     /s/ Charles H. Foster, Jr.      Director                             August 10, 2000
____________________________________
       Charles H. Foster, Jr.

       /s/ Richard G. Holder         Director                             August 10, 2000
____________________________________
         Richard G. Holder

         /s/ Allen B. King           President and Chief Operating        August 10, 2000
____________________________________  Officer and Director
           Allen B. King

      /s/ Eddie N. Moore, Jr.        Director                             August 10, 2000
____________________________________
        Eddie N. Moore, Jr.

      /s/ Jeremiah J. Sheehan        Director                             August 10, 2000
____________________________________
        Jeremiah J. Sheehan

       /s/ Hubert R. Stallard        Director                             August 10, 2000
____________________________________
         Hubert R. Stallard

        /s/ Walter A. Stosch         Director                             August 10, 2000
____________________________________
          Walter A. Stosch

                                     Director                             August 10, 2000
____________________________________
          Eugene P. Trani
</TABLE>

                                      II-5
<PAGE>

<TABLE>
<CAPTION>
     Exhibit No.                           Description
     -----------                           -----------
     <C>         <S>
           1*    Form of Underwriting Agreement (including Form of Terms
                 Agreement and Schedules thereto)

           4*    Indenture dated as of February 1, 1991 between the Company and
                 The Chase Manhattan Bank (formerly known as Chemical Bank), as
                 Trustee (including forms of Debt Securities)

         5.1*    Opinion and consent of Sullivan & Cromwell, as to the validity
                 of the Debt Securities

         5.2*    Opinion and consent of George C. Freeman, III, Esq., as to the
                 validity of the Debt Securities


           8*    Opinion and consent of Sullivan & Cromwell, as to certain tax
                 matters

        23.1*    Consent of Ernst & Young LLP

        23.2*    Consents of Sullivan & Cromwell (included as part of Exhibits
                 5.1 and 8)

        23.3*    Consent of George C. Freeman, III, Esq. (included as part of
                 Exhibit 5.2)

          24*    Powers of Attorney: contained in signature pages

          25*    Form T-1 Statement of Eligibility and Qualification under the
                 Trust Indenture Act of 1939, as amended, of The Chase
                 Manhattan Bank (formerly known as Chemical Bank)
</TABLE>
    --------
    * Filed herewith

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>FORM OF UNDERWRITING AGREEMENT
<TEXT>

<PAGE>

                                                                       Exhibit 1

                        FORM OF UNDERWRITING AGREEMENT

                                                                          [Date]


[Representative[s] of the
         several Underwriters]

Dear Sirs:

     Universal Corporation (the "Company") proposes to issue and sell from time
                                 -------
to time certain of its debt securities (the "Securities") registered under the
                                             ----------
registration statement referred to below. The Securities will be issued under an
Indenture (the "Indenture"), dated as of February 1, 1991, between the Company
                ---------
and The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee, and
will have varying designations, interest rates and times of payment of any
interest, maturities, redemption provisions and other terms, with all such terms
for any particular series of the Securities being determined at the time of the
sale. Particular series of the Securities may be sold to you, and to other firms
on whose behalf you may act as representatives, for resale in accordance with
the terms of offering determined at the time of sale. The firm or firms which
agree to purchase the Securities are hereinafter referred to as the
"Underwriters" of such Securities.
 ------------

     This Agreement shall apply only to Securities in respect of which a Terms
Agreement shall have been executed as referred to herein.

     The Company and the Underwriters agree as follows:

     1.   Purchase and Offering.
          ---------------------

          (a) The obligations of the Underwriters to purchase the Securities
     will be evidenced by an exchange of telegraphic or other written
     communications in substantially the form of Annex A hereto (a "Terms
                                                                    -----
     Agreement") at each time the Company determines to sell the Securities.
     ---------
     Each Terms Agreement shall specify the firms which will be Underwriters
     (who shall become bound by the terms hereof when the Terms Agreement has
     been entered into), the firms designated by such Underwriters to act as
     representatives on behalf of the several Underwriters (the
     "Representatives"), the principal amount to be purchased by each
      ---------------
     Underwriter, the purchase price to be paid by the Underwriters and the
     terms of the Securities not already specified in the Indenture, including,
     but not limited to, interest rates, maturities, redemption provisions and
     sinking fund requirements. Each Terms Agreement shall also specify the date
     of delivery and payment for the Securities and any details of the terms of
     offering which should be reflected in the Prospectus Supplement relating to
     the offering of the Securities. Such Prospectus
<PAGE>

     Supplement shall set forth the terms contained in the Terms Agreement and
     such other information that you and the Company agree at the time the Terms
     Agreement is entered into should be included in the Prospectus Supplement.
     Insofar as any provision of this Agreement is inconsistent with any Terms
     Agreement, the Terms Agreement shall be deemed to control. The obligations
     of the Underwriters to purchase the Securities shall be several and not
     joint. It is understood that the Underwriters propose to offer the
     Securities for sale as set forth in such Prospectus Supplement.

          (b) Payment of the purchase price for the Securities shall be made to
     the Company or its order by wire transfer of immediately available funds or
     in any other manner satisfactory to the Company against delivery of the
     Securities to you for the respective accounts of the Underwriters. Such
     payment and delivery shall be made at 10:00 A.M.* on the date of delivery
     specified in the Terms Agreement (unless another time not later than 10:00
     A.M. on the third business day** on the date of delivery specified in the
     Terms Agreement (unless another time not later than 10:00 A.M. on the third
     business day** thereafter shall be agreed to by you and the Company or
     unless postponed in accordance with the provisions of Section 8 hereof).
     The time and date that such payment and delivery are actually made is
     herein sometimes referred to as the "Closing Date." Unless otherwise
     specified in the applicable Terms Agreement, the Securities shall be
     delivered to you in the form of one or more definitive global (book entry)
     securities in registered form, in temporary or final form, and in such
     names and such principal amounts as, not later than 10:00 A.M. on the
     business day immediately preceding the time of purchase, you shall specify.
     For the purpose of expediting the checking and packaging of the Securities
     by you, the Company agrees to make them available to you for such purpose
     prior to the close of business on the business day immediately preceding
     the time of purchase.

          2. Representations and Warranties of the Company. The Company
             ---------------------------------------------
     represents and warrants to each of the Underwriters as of the date of
     execution of the Terms Agreement and as of the Closing Date that:


          (a) the Company is permitted to use Form S-3 under the Securities Act
     of 1933, as amended (the "Act"), and has filed with the Securities and
                               ---
     Exchange Commission (the "Commission") a registration statement on such
                               ----------
     Form, which has become effective, for the registration under the Act of the
     Securities. Such registration statement, as amended at the date of this
     Agreement, meets the requirements set forth in Rule 415(a)(1)(x) under the
     Act and complies in all other material respects with said Rule. Such
     registration statement, including the exhibits thereto, as amended at the
     date of any Terms Agreement, is hereinafter called the "Registration
                                                             ------------
     Statement" and the prospectus included in the Registration Statement, as
     ---------
     supplemented to reflect the terms of any series of the Securities and the
     plan of distribution thereof, in the form in which it shall be filed

- -----------------------
*    Times mentioned herein are New York City times.

**   As used herein, "business day" shall mean a day on which the New York
                      ------------
     Stock Exchange is open for trading.

                                      -2-
<PAGE>

     with the Commission pursuant to Rule 424(b), is hereinafter called the
     "Prospectus." Any reference herein to the Registration Statement or the
      ----------
     Prospectus shall be deemed to include the documents incorporated by
     reference therein pursuant to Item 12 of Form S-3 which were filed under
     the Securities Exchange Act of 1934 (the "Exchange Act") on or before the
                                               ------------
     date of this Agreement or the date of the Prospectus, as the case may be,
     and any reference herein to the terms "amend," "amendment" or "supplement"
                                            -----    ---------      ----------
     with respect to the Registration Statement or the Prospectus shall be
     deemed to include the filing of any document under the Exchange Act after
     the date of this Agreement or the date of the Prospectus, as the case may
     be, deemed to be incorporated therein by reference;

          (b) as of the date of any Terms Agreement, when the Prospectus is
     first filed pursuant to Rule 424(b) under the Act, when, prior to the
     Closing Date, any amendment to the Registration Statement becomes effective
     (including the filing of any document incorporated by reference in the
     Registration Statement) and at the Closing Date, (i) the Registration
     Statement, as amended as of any such time, and the Prospectus, as amended
     or supplemented as of any such time, and the Indenture will comply in all
     material respects with the applicable requirements of the Act, the Trust
     Indenture Act of 1939 (the "Trust Indenture Act") and the Exchange Act and
                                 -------------------
     the respective rules thereunder and (ii) neither the Registration
     Statement, as amended as of any such time, nor the Prospectus, as amended
     or supplemented as of any such time, will contain any untrue statement of a
     material fact or omit to state any material fact required to be stated
     therein or necessary in order to make the statements therein not
     misleading; provided, however, that the Company makes no warranty or
     representation with respect to any statement contained in the Registration
     Statement or the Prospectus in reliance upon and in conformity with
     information furnished in writing by or on behalf of any Underwriter through
     you to the Company expressly for use in the Registration Statement or the
     Prospectus;

          (c) all of the issued and outstanding shares of capital stock,
     including common stock of the Company, have been duly and validly
     authorized and issued and are fully paid and non-assessable; and the
     Company has been duly incorporated and is validly existing as a corporation
     in good standing under the laws of the Commonwealth of Virginia, with full
     corporate power and authority to own its properties and conduct its
     business as described in the Registration Statement and the Prospectus, to
     execute and deliver this Agreement, the Terms Agreement and the Indenture
     and to issue and sell the Securities as herein and therein contemplated;

          (d) (A) each of the Subsidiaries listed on Schedule A hereto, as such
     Schedule A may be amended by the Company from time to time (each a
     "Material Subsidiary" and collectively the "Material Subsidiaries"), has
      -------------------                        ---------------------
     been duly incorporated and is validly existing as a corporation in good
     standing under the laws of its respective jurisdiction of incorporation
     with full corporate power and authority to own its respective properties
     and to conduct its respective business;

                                      -3-
<PAGE>

     and (B) each of the Subsidiaries that are not Material Subsidiaries has
     been duly incorporated and is validly existing as a corporation in good
     standing under the laws of its respective jurisdiction of incorporation
     with full corporate power and authority to own its respective properties
     and to conduct its respective business in each jurisdiction in which the
     failure to do so, individually or in the aggregate, would have a material
     adverse effect on the operations, business or financial condition of the
     Company and its Subsidiaries, taken as a whole;

          (e) the Company and each of its Material Subsidiaries are duly
     qualified or licensed by each jurisdiction in which they conduct their
     respective businesses and in which the failure, individually or in the
     aggregate, to be so licensed or qualified would have a material adverse
     effect on the operations, business or financial condition of the Company
     and its Subsidiaries taken as a whole, and the Company and its Material
     Subsidiaries are in good standing, in each jurisdiction in which they own
     or lease real property or maintain an office in which the failure to do so,
     individually or in the aggregate, would have a material adverse effect on
     the operations, business or financial condition of the Company and its
     Subsidiaries taken as a whole;

          (f) the Indenture has been duly authorized by all necessary corporate
     action on the part of the Company, executed and delivered by the Company
     and (assuming the Indenture has been duly authorized, executed and
     delivered by the Trustee) constitutes a valid and legally binding
     obligation of the Company enforceable against the Company in accordance
     with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and similar laws of general applicability
     relating to or affecting creditors' rights and to general equity
     principles;

          (g) the Securities have been duly authorized by all necessary
     corporate action on the part of the Company; when issued and delivered
     pursuant to this Agreement, the Terms Agreement and the Indenture against
     payment of the consideration therefor, the Securities will have been duly
     executed and delivered and will constitute valid and legally binding
     obligations of the Company enforceable against the Company in accordance
     with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and similar laws of general applicability
     relating to or affecting creditors' rights and to general equity
     principles;

          (h) this Agreement and the Terms Agreement have been duly authorized,
     executed and delivered by the Company;

          (i) all regulatory consents, authorizations, approvals and filings
     required to be obtained or made by the Company under the laws of the
     Commonwealth of Virginia for the issuance, sale and delivery of the
     Securities by the Company to the Underwriters have been obtained or made;

                                      -4-
<PAGE>

          (j) the execution, delivery and performance of this Agreement, the
     Terms Agreement and the Indenture do not, and the issuance of the
     Securities and the consummation by the Company of the transactions
     contemplated hereby and thereby will not, conflict with, or result in any
     breach of or constitute a default under (nor constitute any event which
     with notice, lapse of time, or both would constitute a breach of, or
     default under), any provisions of the charter or by-laws of the Company, or
     to the Company's knowledge, any of its Subsidiaries, or under any provision
     of any license, indenture, mortgage, deed of trust, bank loan, credit
     agreement or other agreement or instrument to which the Company, or to the
     Company's knowledge, any of its Subsidiaries, is a party or by which any of
     them or their respective properties may be bound or affected, or under any
     law, regulation or rule or any decree, judgment or order applicable to the
     Company, or to the Company's knowledge, any of its Subsidiaries in which
     such conflict, breach or default, individually or in the aggregate, would
     have a material adverse effect on the operations, business or financial
     condition of the Company and its Subsidiaries, taken as a whole;

          (k) to the Company's knowledge, neither the Company nor any of its
     subsidiaries (each a "Subsidiary" and collectively the "Subsidiaries") is
                           ----------                        ------------
     in breach of, or in default under (nor has any event occurred which with
     notice, lapse of time, or both would constitute a breach of, or default
     under), any license, indenture, mortgage, deed of trust, bank loan or any
     other agreement or instrument to which the Company or any of its
     Subsidiaries is a party or by which any of them or their respective
     properties may be bound or affected by or under any decree, judgment or
     order applicable to the Company or any of its Subsidiaries in which such
     breach or default, individually or in the aggregate, would have a material
     adverse effect on the operations, business or financial condition of the
     Company and its Subsidiaries, taken as a whole;

          (l) to the Company's knowledge, there are no actions, suits or
     proceedings pending or threatened against the Company or any of its
     Subsidiaries or any of their respective properties, at law or in equity, or
     before or by any commission, board, body, authority or agency which are
     required to be described in the Prospectus but are not so described;

          (m) to the Company's knowledge, there are no contracts, licenses,
     agreements, leases or documents of a character which are required to be
     filed as exhibits to the Registration Statement or to be summarized or
     described in the Prospectus which have not been so filed, summarized or
     described;

          (n) the Indenture conforms, and the Securities will conform, in all
     material respects to the description thereof contained in the Registration
     Statement and Prospectus;

          (o) to the Company's knowledge, Ernst & Young LLP, whose reports on
     the consolidated financial statements of the Company and its Subsidiaries
     are filed with the Commission in documents incorporated by reference into
     the

                                      -5-
<PAGE>

     Registration Statement and Prospectus are independent public accountants as
     required by the Act and the applicable published rules and regulations
     thereunder;

          (p) the audited consolidated financial statements of the Company and
     its Subsidiaries incorporated by reference in the Registration Statement
     and the Prospectus present fairly the consolidated balance sheet of the
     Company and its Subsidiaries as of the dates indicated and the consolidated
     statements of income and cash flows and changes in shareholders' equity of
     the Company and its Subsidiaries for the periods specified; the financial
     statements of the Company and its Subsidiaries have been prepared in
     conformity with generally accepted accounting principles in the United
     States applied on a consistent basis during the periods involved;

          (q) subsequent to the respective dates as of which information is
     given in the Registration Statement and Prospectus, and except as may be
     otherwise stated in the Registration Statement or Prospectus, there has not
     been (A) any material and unfavorable change, financial or otherwise, in
     the business, properties, business prospects, regulatory environment,
     results of operations or financial condition of the Company and its
     Subsidiaries taken as a whole, (B) any transaction, which is material to
     the Company and its Subsidiaries taken as a whole, entered into by, or
     approved by the Board of Directors of, the Company or any of its
     Subsidiaries or (C) any obligation, contingent or otherwise, directly or
     indirectly incurred by the Company or any of its Subsidiaries which is
     material to the Company and its Subsidiaries taken as a whole except for
     normal trade obligations incurred in the ordinary course of the Company's
     business; and

          (r) the Company is not, and after giving effect to the offering and
     sale of the Securities will not be, an "investment company" or an
     affiliated person of, or "promoter" or "principal underwriter" for, an
     "investment company," as such terms are defined in the Investment Company
     Act of 1940, as amended, and the rules and regulations thereunder.

          (s) except as described in the Registration Statement and the
     Prospectus, (i) the operations of the Company and its Subsidiaries are in
     compliance with all applicable environmental laws, except where the failure
     to comply with any such laws, whether individually or in the aggregate,
     would not have a material adverse effect on the operations, business or
     financial condition of the Company and its Subsidiaries, taken as a whole,
     (ii) the Company and its Subsidiaries have obtained all environmental,
     health and safety permits, licenses and approvals necessary for its
     operation, all such permits, licenses and approvals are in effect and the
     Company and its Subsidiaries are in compliance with the terms and
     conditions thereof, except where the failure to obtain any such permits,
     licenses or approvals, or to comply with the terms and conditions thereof,
     whether individually or in the aggregate, would not have a material adverse
     effect on the operations, business or financial condition of the Company
     and its Subsidiaries, taken as a whole, (iii) with respect to any property
     currently or formerly owned, leased or operated by the Company of any of
     its Subsidiaries, (a) neither the

                                      -6-
<PAGE>

     Company nor any such Subsidiary is subject to any judicial or
     administrative proceeding or any order from or agreement with any
     governmental authority (collectively, "Proceedings"), and (b) the Company
     does not have knowledge of any pending or threatened investigation by any
     governmental authority (collectively, "Investigations") relating to any
     violation or alleged violation of any environmental law, any release or
     threatened release of a hazardous material into the environment, or any
     remedial action that may be necessary in connection with any such violation
     or release, except for such Proceedings or Investigations which, whether
     individually or in the aggregate, are not expected to have a material
     adverse effect on the operations, business or financial condition of the
     Company and its Subsidiaries, taken as a whole, (iv) neither the Company
     nor any such Subsidiary has filed any notice under any environmental law
     indicating past or present treatment, storage, disposal or release of a
     hazardous material into the environment in a manner that is not in
     compliance with, or which could result in liability under, applicable
     environmental laws, except where such non-compliance or liability, whether
     individually or in the aggregate, is not expected to have a material
     adverse effect on the operations, business or financial condition of the
     Company and its Subsidiaries, taken as a whole, and (v) neither the Company
     nor any such Subsidiary has received notice of a claim that it may be
     subject to liability (a "Notice") as a result of a release or threatened
     release of hazardous material, except for such Notice which, whether
     individually or in the aggregate, are not expected to have a material
     adverse effect on the operations, business or financial condition of the
     Company and its Subsidiaries taken as a whole and, to the Company's
     knowledge, there is no reasonable basis for any such claim, action, suit or
     investigation with respect to any environmental law;

          (t) to the Company's knowledge, no labor problem exists with employees
     of the Company or any of its Subsidiaries that would have a material
     adverse effect on the Company and its Subsidiaries taken as a whole.

          3.   Certain Covenants of the Company. The Company hereby agrees:
               -----------------------------------------------------------

          (a) to furnish such information as you may reasonably require and
     otherwise to cooperate with you in qualifying the Securities for offering
     and sale under the securities or blue sky laws of such states as you may
     designate and to maintain such qualifications in effect so long as required
     for the distribution of the Securities, provided that the Company shall not
     be required to qualify as a foreign corporation or to consent to the
     service of process under the laws of any such state (except service of
     process with respect to the offering and sale of the Securities); and to
     promptly advise you of the receipt by the Company of any notification with
     respect to the suspension of the qualification of the Securities for sale
     in any jurisdiction or the initiation or threatening of any proceeding for
     such purpose;

          (b) to make available to you in New York City, as soon as practicable
     after the Registration Statement becomes effective, and thereafter from
     time to time to furnish to the Underwriters, as many copies of the
     Prospectus (or of the Prospectus as amended or supplemented if the Company
     shall have made any

                                      -7-
<PAGE>

     amendments or supplements thereto after the effective date of the
     Registration Statement) as the Underwriters may reasonably request for the
     purposes contemplated by the Act;

          (c) that it will use its best efforts to cause any amendment of the
     Registration Statement to become effective promptly. The Company will not
     file any amendment to the Registration Statement or amendment or supplement
     to the Prospectus relating to any series of the Securities to which the
     Underwriters of such series shall object in writing after a reasonable
     opportunity to review the same. Subject to the foregoing sentence, the
     Company will cause each Prospectus supplement relating to the Securities to
     be filed with the Commission pursuant to the applicable paragraph of Rule
     424 within the time period prescribed and will provide evidence
     satisfactory to the Underwriters of such timely filing. The Company will
     promptly advise the Underwriters of any series of Securities (A) when any
     Prospectus supplement relating to such series shall have been filed with
     the Commission pursuant to Rule 424, (B) when, prior to termination of the
     offering of such series, any amendment to the Registration Statement shall
     have been filed with the Commission or become effective, (C) of any request
     by the Commission for any amendment of the Registration Statement or
     supplement to the Prospectus or for any additional information, (D) of the
     receipt by the Company of any notification of the issuance by the
     Commission of any stop order suspending the effectiveness of the
     Registration Statement or the use of any Prospectus or Prospectus
     supplement or, if the Company has knowledge, of the institution or threat
     of any proceeding for that purpose and (E) of the receipt by the Company of
     any notification with respect to the suspension of the qualifications of
     the Securities for sale in any jurisdiction or, if the Company has
     knowledge, of the initiation or threat of any proceeding for such purpose.
     The Company will make every reasonable effort to prevent the issuance of
     any such stop order or of any order suspending or preventing any such use
     and, if issued, to obtain as soon as possible the withdrawal thereof;

          (d) to advise the Underwriters of a series of Securities promptly of
     the happening of any event known to the Company within the time during
     which a prospectus relating to such series is required to be delivered
     under the Act which, in the judgment of the Company, would require the
     making of any change in the Prospectus then being used, or in the
     information incorporated therein by reference, so that the Prospectus would
     not include an untrue statement of material fact or omit to state a
     material fact necessary to make the statements therein, in the light of the
     circumstances under which they are made, not misleading, and, during such
     time, to prepare and furnish, at the Company's expense, to the Underwriters
     promptly such amendments or supplements to such Prospectus as may be
     necessary to reflect any such change and to furnish you a copy of such
     proposed amendment or supplement before filing any such amendment or
     supplement with the Commission;

          (e) that, as soon as practicable after the date of each Terms
     Agreement, the Company will make generally available to its Security
     holders an

                                      -8-
<PAGE>

     earnings statement of the Company which will satisfy the provisions of
     Section 11(a) of the Act and Rule 158 under the Act;

          (f) to apply the net proceeds from the sale of the Securities in the
     manner set forth under the caption "Use of Proceeds" in the Prospectus
     supplement relating to the Securities or, if none is provided, under such
     caption in the Prospectus;

          (g) to pay all expenses, fees and taxes (other than any transfer taxes
     and fees and disbursements of counsel for the Underwriters except as set
     forth under Section 4 hereof and (iii) and (iv) below) in connection with
     (i) the preparation and filing of the Registration Statement, each
     preliminary Prospectus, the Prospectus, and any amendments or supplements
     thereto, and the printing and furnishing of copies of each thereof to the
     Underwriters and to dealers (including costs of mailing and shipment), (ii)
     the preparation, issuance, execution, authentication and delivery of the
     Securities, (iii) the reproduction and furnishing of copies of this
     Agreement, the Terms Agreement, any Agreement Among Underwriters, any
     dealer agreements, any Statements of Information and Powers of Attorney and
     the Indenture to the Underwriters and to dealers (including costs of
     mailing and shipment), (iv) the qualification of the Securities for
     offering and sale under state laws and the determination of their
     eligibility for investment under state law as aforesaid (including the
     legal fees and filing fees and other disbursements of counsel for the
     Underwriters) and the furnishing of copies of any blue sky surveys or legal
     investment surveys to the Underwriters and to dealers, (v) any fees payable
     to investment rating agencies with respect to the Securities, (vi) any
     filing for review of the underwriting arrangements for the public offering
     of the Shares by the National Association of Securities Dealers, Inc.
     ("NASD") and (vii) the performance of the Company's other obligations
       ----
     hereunder (it is understood, however, that except as provided in this
     subsection 3(g), Section 4 and Section 8 hereof, the Underwriters will pay
     all of their own costs and expenses, including the fees and disbursements
     of their counsel, transfer taxes on resale of any of the Securities by
     them, and any advertising expenses connected with any offers they may
     make);

          (h) that the Company will not, without your prior written consent,
     offer or sell, or publicly announce its intention to offer or sell, (i) any
     debt securities pursuant to a public offering or (ii) any unsecured debt
     securities pursuant to a private placement which contemplates the
     purchasers of such debt securities receiving customary registration rights
     in each case during the period beginning on the date of the Terms Agreement
     and ending on the 30th day following the date of the Terms Agreement. The
     Company has not taken, and will not take, any action which might reasonably
     be expected to cause or result in the stabilization or manipulation of the
     price of any security to facilitate the sale or resale of the Securities.

          4. Reimbursement of Underwriters' Expenses. If the Securities of a
             ---------------------------------------
     series to which a Terms Agreement relates are not delivered for any reason
     other than the

                                      -9-
<PAGE>

     termination of the obligations of the several Underwriters in accordance
     with Section 8 hereof or the default by one or more of the Underwriters in
     its or their respective obligations to purchase Securities pursuant to any
     Terms Agreement, the Company shall reimburse the Underwriters for all of
     their out-of-pocket expenses, including the fees and disbursements of their
     counsel.

          5. Conditions of Underwriters' Obligations. The several obligations of
             ---------------------------------------
     the Underwriters to purchase and pay for the Securities under any Terms
     Agreement are subject to the accuracy of the representations and warranties
     on the part of the Company on the date of such Terms Agreement and at the
     Closing Date, to the accuracy of the statements of officers of the Company
     made pursuant to the provisions hereof, to the performance by the Company
     of its obligations hereunder and to the following conditions:


               (a) The Company shall furnish to you at the Closing Date a
          written opinion from the Secretary and General Counsel of the Company,
          or the Assistant Secretary of the Company, addressed to the
          Underwriters, and dated the Closing Date, with reproduced copies for
          each of the other Underwriters and in form and substance satisfactory
          to Cahill, Gordon & Reindell, counsel for the Underwriters,
          substantially to the effect that:

                    (i) the Company has been duly incorporated and is validly
               existing as a corporation in good standing under the laws of the
               Commonwealth of Virginia, with full corporate power and authority
               to own its properties and conduct its business as described in
               the Registration Statement and the Prospectus, to execute and
               deliver this Agreement, the Terms Agreement and the Indenture and
               to issue and sell the Securities as herein and therein
               contemplated;

                    (ii) (A) each of the Material Subsidiaries has been duly
               incorporated and is validly existing as a corporation in good
               standing under the laws of its respective jurisdiction of
               incorporation with full corporate power and authority to own its
               respective properties and to conduct its respective business; and
               (B) each of the Subsidiaries which are not Material Subsidiaries
               has been duly incorporated and is validly existing as a
               corporation in good standing under the laws of its respective
               jurisdiction of incorporation with full corporate power and
               authority to own its respective properties and to conduct its
               respective business in each jurisdiction in which the failure to
               do so, individually or in the aggregate, would have a material
               adverse effect on the operations, business or financial condition
               of the Company and its Subsidiaries, taken as a whole;

                    (iii) the Company and its Material Subsidiaries are duly
               qualified or licensed by each jurisdiction in which they conduct
               their respective businesses and in which the failure,
               individually or in the aggregate, to be so licensed or qualified
               would have a material adverse effect on the operations, business
               or financial condition of the Company

                                      -10-
<PAGE>

               and its Subsidiaries taken as a whole, and the Company and its
               Material Subsidiaries are duly qualified, and are in good
               standing, in each jurisdiction in which they own or lease real
               property or maintain an office in which the failure to do so,
               individually or in the aggregate, would have a material adverse
               effect on the operations, business or financial condition of the
               Company and its Subsidiaries, taken as a whole;

                    (iv) the Indenture has been duly authorized by all necessary
               corporate action on the part of the Company, executed and
               delivered by the Company and constitutes a valid and legally
               binding obligation of the Company enforceable against the Company
               in accordance with its terms, subject to bankruptcy, insolvency,
               fraudulent transfer, reorganization, moratorium and similar laws
               of general applicability relating to or affecting creditors'
               rights and to general equity principles;

                    (v) the Securities have been duly authorized by all
               necessary corporate action on the part of the Company, executed
               and delivered by the Company and constitute valid and legally
               binding obligations of the Company enforceable against the
               Company in accordance with their terms, subject to bankruptcy,
               insolvency, fraudulent transfer, reorganization, moratorium and
               similar laws of general applicability relating to or affecting
               creditors' rights and to general equity principles;

                    (vi) this Agreement and the Terms Agreement have been duly
               authorized, executed and delivered by the Company;

                    (vii) all regulatory consents, authorizations, approvals and
               filings required to be obtained or made by the Company under the
               laws of the Commonwealth of Virginia for the issuance, sale and
               delivery of the Securities by the Company to the Underwriters
               have been obtained or made;

                    (viii) the execution, delivery and performance of this
               Agreement, the Terms Agreement and the Indenture by the Company
               and the issuance of the Securities and the consummation by the
               Company of the transactions contemplated hereby and thereby do
               not and will not conflict with, or result in any breach of, or
               constitute a default under (nor constitute any event which with
               notice, lapse of time, or both, would constitute a breach of or
               default under), any provisions of the charter or by-laws of the
               Company or, to such counsel's knowledge, any of its Subsidiaries,
               or under any provision of any license, indenture, mortgage, deed
               of trust, bank loan, credit agreement or other agreement or
               instrument to which the Company or, to such counsel's knowledge,
               any of its Subsidiaries, is a party or by which any of them or
               their respective properties may be bound or affected, or under
               any law, regulation or rule or any decree, judgment or order
               applicable to the Company or, to such counsel's knowledge, any of
               its Subsidiaries in which such conflict, breach

                                      -11-
<PAGE>

               or default, individually or in the aggregate, would have a
               material adverse effect on the operations, business or financial
               condition of the Company and its Subsidiaries, taken as a whole;

                    (ix) to such counsel's knowledge, neither the Company nor
               any of its Subsidiaries is in breach of, or in default under (nor
               has any event occurred which with notice, lapse of time, or both
               would constitute a breach of, or default under), any license,
               indenture, mortgage, deed of trust, bank loan or any other
               agreement or instrument to which the Company or any of its
               Subsidiaries is a party or by which any of them or their
               respective properties may be bound or affected by or under any
               law, regulation or rule or any decree, judgment or order
               applicable to the Company or any of its Subsidiaries in which
               such breach or default, individually or in the aggregate, would
               have a material adverse effect on the operations, business or
               financial condition of the Company and its Subsidiaries, taken as
               a whole;

                    (x) to such counsel's knowledge, there are no actions, suits
               or proceedings pending or threatened against the Company or any
               of its Subsidiaries or any of their respective properties, at law
               or in equity or before or by any commission, board, body,
               authority or agency which are required to be described in the
               Prospectus but are not so described; and

                    (xi) to such counsel's knowledge, there are no contracts,
               licenses, agreements, leases or documents of a character which
               are required to be filed as exhibits to the Registration
               Statement or to be summarized or described in the Prospectus
               which have not been so filed, summarized or described.

          In rendering such opinion, such counsel may state that he has assumed
     that the Indenture has been duly authorized, executed and delivered by the
     Trustee, that any Securities then being delivered conform to the forms
     thereof examined by him (or members of the Company?s legal department
     acting under his supervision), that the Trustee?s certificates of
     authentication of any Securities then being delivered have been manually
     signed by one of the Trustee?s authorized signatories and that the
     signatures on all documents examined by him (or members of the Company?s
     legal department acting under his supervision) are genuine (assumptions
     that he has not independently verified); and that a judgment for money in
     an action based in any country denominated in a foreign currency may not be
     enforced in such currency. In addition, such counsel may state that he has
     examined, or has caused members of the Company?s legal department to
     examine, such corporate records, certificates and other documents, and such
     questions of law, as he has considered necessary or appropriate for the
     purposes of such opinion. In addition, such counsel may state that he is
     licensed to practice law only in the Commonwealth of Virginia and that he
     expresses no opinion as to the effect of the laws of any other jurisdiction
     other than the federal laws of the United States of America, and may rely
     (A) as to matters involving the application of laws other than the laws of
     the Commonwealth of Virginia or United States law, to the extent he deems
     it proper and to

                                      -12-
<PAGE>

     the extent specified in such opinion, upon the opinion or opinions of local
     and foreign counsel and (B) as to matters of fact, to the extent he deems
     proper, on certificates of responsible officers of the Company and
     certificates or other written statements of public officials. The opinion
     of the Secretary and General Counsel of the Company, or the Assistant
     Secretary of the Company, as the case may be, shall state that the opinion
     of such local and foreign counsel is in form satisfactory to him and, in
     his opinion, he and the Underwriters are justified in relying thereon.

          (b) The Company shall furnish to you at the Closing Date an opinion of
     Sullivan & Cromwell, counsel for the Company, in each case addressed to the
     Underwriters, and dated the Closing Date, with reproduced copies for each
     of the other Underwriters and in form and substance satisfactory to Cahill,
     Gordon & Reindell, counsel to the Underwriters, substantially to the effect
     that:

               (i) the Company has been duly incorporated and is validly
          existing as a corporation in good standing under the laws of the
          Commonwealth of Virginia, with full corporate power and authority to
          own its properties and conduct its business as described in the
          Registration Statement and the Prospectus, to execute and deliver this
          Agreement, the Terms Agreement and the Indenture and to issue and sell
          the Securities as herein and therein contemplated;

               (ii) the Indenture has been duly authorized by all necessary
          corporate action on the part of the Company, executed and delivered by
          the Company and constitutes a valid and legally binding obligation of
          the Company enforceable against the Company in accordance with its
          terms, subject to bankruptcy, insolvency, fraudulent transfer,
          reorganization, moratorium and similar laws of general applicability
          relating to or affecting creditors' rights and to general equity
          principles;

               (iii) the Securities have been duly authorized by all necessary
          corporate action on the part of the Company, executed and delivered by
          the Company and constitute valid and legally binding obligations of
          the Company enforceable against the Company in accordance with their
          terms, subject to bankruptcy, insolvency, fraudulent transfer,
          reorganization, moratorium and similar laws of general applicability
          relating to or affecting creditors' rights and to general equity
          principles;

               (iv) this Agreement and the Terms Agreement have been duly
          authorized, executed and delivered by the Company;

               (v) the Securities and the Indenture conform in all material
          respects to the description thereof contained in the Registration
          Statement and Prospectus;

                                      -13-
<PAGE>

               (vi) the Registration Statement has become effective under the
          Act and, to such counsel's knowledge, no stop order proceedings with
          respect thereto are pending or threatened under the Act;

               (vii) no approval, authorization, consent or order of or filing
          with any court or governmental agency or body is required on the part
          of the Company in connection with the issuance and sale of the
          Securities as contemplated hereby other than registration of the
          Securities under the Act and qualification of the Indenture under the
          Trust Indenture Act (except such counsel need express no opinion as to
          any necessary qualification under the state securities or blue sky
          laws of the various jurisdictions in which the Shares are being
          offered by the Underwriters).

          In rendering such opinion, such counsel may state that they have
     assumed that the Indenture has been duly authorized, executed and delivered
     by the Trustee, that any Securities then being delivered conform to the
     forms thereof examined by them, that the Trustee?s certificates of
     authentication of any Securities then being delivered have been manually
     signed by one of the Trustee?s authorized signatories and that the
     signatures on all documents examined by them are genuine (assumptions they
     have not independently verified); and that a judgment for money in an
     action based in any country denominated in a foreign currency may not be
     enforced in such currency. In addition, such counsel may state that they
     have examined such corporate records, certificates and other documents, and
     such questions of law, as they have considered necessary or appropriate for
     the purposes of such opinion. In addition, such counsel shall state that
     they have participated in conferences with officers and other
     representatives of the Company, representatives of the independent public
     accountants of the Company and representatives of the Underwriters at which
     the contents of the Registration Statement and Prospectus were discussed
     and, although such counsel has not undertaken to investigate or verify
     independently and does not assume any responsibility for, the accuracy,
     completeness or fairness of the statements contained in the Registration
     Statement or Prospectus or documents incorporated by reference therein,
     each part of the Registration Statement, when such part became effective,
     and the Basic Prospectus, as supplemented by the Prospectus Supplement, as
     of the date of the Prospectus Supplement, appeared on their face to be
     appropriately responsive, in all material respects relevant to the offering
     of the Securities, to the requirements of the Act and the applicable rules
     and regulations of the Commission thereunder; further, nothing has come to
     the attention of such counsel that causes them to believe that, insofar as
     relevant to the offering of the Securities, the Registration Statement or
     any amendment thereto at the time such Registration Statement or amendment
     became effective contained an 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, or that the Prospectus or
     any supplement thereto at the date of such Prospectus or such supplement
     contained an 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, in light of the circumstances under which they were
     made,

                                      -14-
<PAGE>

     not misleading. In connection with the foregoing paragraph, such counsel
     may state that (A) the limitations inherent in the independent verification
     of factual matters and the character of determinations involved in the
     registration process are such that they do not assume any responsibility
     for the accuracy, completeness or fairness of the statements contained in
     the Registration Statement and Prospectus except for those made under the
     captions "Description of Debt Securities We May Offer," and ?"Description
     of Notes We May Offer?" and "United States Taxation" insofar as they relate
     to provisions of documents therein described; (B) they do not express any
     opinion or belief as to the financial statements or other financial data
     contained in the Registration Statement or the Prospectus, or as to the
     statement of the eligibility of the Trustee under the Indenture under which
     the Securities are being issued; and (C) their opinion and statements in
     this paragraph are furnished to the representatives of the Underwriters
     solely for the benefit of the Underwriters. In rendering such opinion
     Sullivan & Cromwell may rely (A) as to matters involving the application of
     laws other than the laws of the United States and the State of New York, to
     the extent it deems it proper and to the extent specified in such opinion,
     upon the opinion of the Secretary and General Counsel of the Company, or
     the Assistant Secretary of the Company, as the case may be, as to matters
     of Virginia law and (B) as to matters of fact, to the extent such counsel
     deems proper, on certificates of responsible officers of the Company and
     certificates or other written statements of public officials. The opinion
     of Sullivan & Cromwell shall state that the opinion of the Secretary and
     General Counsel of the Company, or the Assistant Secretary of the Company,
     as the case may be, is in form satisfactory to Sullivan & Cromwell and, in
     Sullivan & Cromwell's opinion, the Underwriters and they are justified in
     relying thereon.

               (c) You shall have received from the Company's independent public
          accountants letters dated the date of the Terms Agreement and the
          Closing Date, and addressed to the Underwriters (with reproduced
          copies for each of the Underwriters) in the forms heretofore approved
          by you.

               (d) You shall have received at the Closing Date the favorable
          opinion of Cahill, Gordon & Reindell, counsel for the Underwriters,
          dated the Closing Date, in form and substance reasonably satisfactory
          to you.

               (e) Prior to the Closing Date, (i) no stop order with respect to
          the effectiveness of the Registration Statement shall have been issued
          under the Act or proceedings initiated under Section 8(d) or 8(e) of
          the Act; (ii) the Registration Statement and all amendments thereto,
          or modifications thereof, if any, shall 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 statement therein not
          misleading; and (iii) the Prospectus and all amendments or supplements
          thereto, or modifications thereof, if any, shall 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, in
          the light of the circumstances under which they are made, not
          misleading.

                                      -15-
<PAGE>

               (f) Between the time of execution of the Terms Agreement and the
          Closing Date, (i) no material and unfavorable change, financial or
          otherwise (other than as referred to in the Registration Statement and
          Prospectus), in the business, financial condition or business
          prospects of the Company and its Subsidiaries taken as a whole shall
          occur or become known and (ii) no transaction which is material and
          unfavorable to the Company and its Subsidiaries taken as a whole shall
          have been entered into by, or approved by the Board of Directors of,
          the Company or any of its Subsidiaries.

               (g) The Company will, at the Closing Date, deliver to you a
          certificate of one of its executive officers in which such executive
          officer shall state, to the best of his or her knowledge, that the
          representations and warranties of the Company as set forth in this
          Agreement and the conditions set forth in paragraph (e) and paragraph
          (f) have been met and that they are true and correct as of each such
          date.

               (h) The Company shall have furnished to you such other documents
          and certificates as to the accuracy and completeness of any statement
          in the Registration Statement and the Prospectus as of the Closing
          Date, as you may reasonably request.

               (i) The Company shall perform such of its obligations under this
          Agreement and the Terms Agreement as are to be performed by the terms
          hereof at or before the Closing Date.

               (j) At the Closing Date, counsel for the Underwriters shall have
          been furnished with such information, certificates and documents as
          they may reasonably require for the purpose of enabling them to pass
          upon the issuance and sale of the Securities as contemplated herein
          and related proceedings, or in order to evidence the accuracy of any
          of the representations or warranties, or the fulfillment of any of the
          conditions, herein contained; and all opinions and certificates
          mentioned above or elsewhere in this Agreement shall be reasonably
          satisfactory in form and substance to the Representatives and counsel
          for the Underwriters.

          6. Termination of Terms Agreement. The obligations of the several
             ------------------------------
     Underwriters hereunder shall be subject to termination in the absolute
     discretion of you or any group of Underwriters (which may include you)
     which has agreed pursuant to the Terms Agreement to purchase in the
     aggregate at least 50% of the Securities, if, at any time between the time
     of execution of the Terms Agreement and the Closing Date, (a) trading in
     securities generally on the New York Stock Exchange shall have been
     suspended or minimum prices shall have been established on the New York
     Stock Exchange, (b) a downgrading shall have occurred in the rating
     accorded the Company's debt securities by any "nationally recognized
     statistical rating organization," as that term is defined by the Commission
     for purposes of Rule 436(g)(2) of the rules and regulations promulgated
     under the Act or such organization shall have publicly announced that it
     has under surveillance or review, other than with possible positive
     implications, its rating of

                                      -16-
<PAGE>

     any of the Company's debt securities, (c) a banking moratorium shall have
     been declared either by the United States or New York State authorities, or
     (d) the United States shall have declared war in accordance with its
     constitutional processes or there shall have occurred any material outbreak
     or escalation of hostilities or other national or international calamity or
     crisis of such magnitude in its effect on the financial markets of the
     United States as, in your judgment or in the good faith judgment of such
     group of Underwriters, to make it impracticable to market the Securities.

          If you or any group of Underwriters elects to terminate this Agreement
     as provided in this Section 6, the Company and each other Underwriter shall
     be notified promptly by letter or telegram.

          If the sale to the Underwriters of the Securities, as contemplated by
     this Agreement and the Terms Agreement, is not carried out by the
     Underwriters for any reason permitted under this Agreement or if such sale
     is not carried out because the Company shall be unable to comply with any
     of the terms of this Agreement, the Company shall not be under any
     obligation or liability under this Agreement (except to the extent provided
     in Sections 3(g), 4 and 8 hereof), and the Underwriters shall be under no
     obligation or liability to the Company under this Agreement (except to the
     extent provided in Section 8 hereof) or to one another hereunder.

          7. Increase in Underwriters' Commitments. If any Underwriter shall
             -------------------------------------
     default in its obligation to take up and pay for the Securities to be
     purchased by it under any Terms Agreement and if the principal amount of
     Securities which all Underwriters so defaulting shall have agreed but
     failed to take up and pay for does not exceed one-eleventh of the total
     principal amount of Securities agreed to be purchased pursuant to such
     Terms Agreement, the non-defaulting Underwriters shall take up and pay for
     (in addition to the principal amount of Securities they are obligated to
     purchase pursuant to such Terms Agreement) the principal amount of
     Securities agreed to be purchased by all such defaulting Underwriters, as
     hereinafter provided. Such Securities shall be taken up and paid for by
     such non-defaulting Underwriter or Underwriters, as hereinafter provided.
     Such Securities shall be taken up and paid for by such non-defaulting
     Underwriter or Underwriters in such amount or amounts as you may designate
     with the consent of each Underwriter so designated or, in the event no such
     designation is made, such Securities shall be taken up and paid for by all
     non-defaulting Underwriters pro rata in proportion to the principal amount
     of Securities they have agreed to purchase under such Terms Agreement.

          Without relieving any defaulting Underwriter from its obligations
     hereunder, the Company agrees with the non-defaulting Underwriters that it
     will not sell any Securities under any Terms Agreement unless all of the
     Securities under such Terms Agreement are purchased by the Underwriters (or
     by substituted Underwriters selected by you with the approval of the
     Company or selected by the Company with your approval).

          If a new Underwriter or Underwriters are substituted by the
     Underwriters or by the Company for a defaulting Underwriter or Underwriters
     in accordance with the foregoing provision, the Company or you shall have
     the right to postpone the time of

                                      -17-
<PAGE>

     purchase for a period not exceeding five business days in order that any
     necessary changes in the Registration Statement and Prospectus and other
     documents may be effected.

          The term Underwriter as used in this Agreement shall refer to and
     include any Underwriter substituted under this Section 7.

               8.   Indemnity by the Company and the Underwriters.
                    ---------------------------------------------

               (a) The Company agrees to indemnify, defend and hold harmless
          each Underwriter and any person who controls any Underwriter within
          the meaning of Section 15 of the Act or Section 20 of the Exchange
          Act, from and against any loss, expense, liability or claim (including
          the reasonable cost of investigation) which, jointly or severally, any
          such Underwriter or any such controlling person may incur under the
          Act, the Exchange Act or otherwise insofar as such loss, expense,
          liability or claim arises out of or is based upon any untrue statement
          or alleged untrue statement of a material fact contained in the
          Registration Statement (or in the Registration Statement as amended by
          any post-effective amendment thereof by the Company) or in a
          Prospectus (the term Prospectus for the purpose of this Section 8
          being deemed to include any Preliminary Prospectus, the Prospectus and
          the Prospectus as amended or supplemented by the Company), or arises
          out of or is based upon any omission or alleged omission to state a
          material fact required to be stated in either such Registration
          Statement or Prospectus or necessary to make the statements made
          therein not misleading, except insofar as any such loss, expense,
          liability, or claim arises out of or is based upon any untrue
          statement or alleged untrue statement of a material fact contained in
          and in conformity with information furnished in writing by any
          Underwriter through you to the Company expressly for use in such
          Registration Statement or such Prospectus or arises out of or is based
          upon any omission or alleged omission to state a material fact in
          connection with such information required to be stated in either such
          Registration Statement or Prospectus or necessary to make such
          information not misleading; provided, however, that the indemnity
          agreement contained in this subsection (a) with respect to any
          Preliminary Prospectus or amended Preliminary Prospectus shall not
          inure to the benefit of any Underwriter (or to the benefit of any
          person controlling such Underwriter) from whom the person asserting
          any such loss, expense, liability or claim purchased the Securities
          which is the subject thereof if the Prospectus corrected any such
          alleged untrue statement or omission and if such Underwriter failed to
          send or give a copy of the Prospectus to such person at or prior to
          the written confirmation of the sale of such Securities to such
          person.

               If any action is brought against an Underwriter or controlling
          person in respect of which indemnity may be sought against the Company
          pursuant to the foregoing paragraph, such Underwriter shall promptly
          notify the Company in writing of the institution of such action and
          the Company shall assume the defense of such action, including the
          employment of counsel and payment of expenses. Such Underwriter or
          such controlling person shall have the right to

                                      -18-
<PAGE>

          employ its or their own counsel in any such case, but the fees and
          expenses of such counsel shall be at the expense of such Underwriter
          or of such controlling person unless the employment of such counsel
          shall have been authorized in writing by the Company in connection
          with the defense of such action or the Company shall not have employed
          counsel to have charge of the defense of such action or such
          indemnified party or parties shall have reasonably concluded that
          there may be defenses available to it or them which are different from
          or additional to those available to the Company (in which case the
          Company shall not have the right to direct the defense of such action
          on behalf of the indemnified party or parties), in any of which events
          such fees and expenses shall be borne by the Company and paid as
          incurred (it being understood, however, that the Company shall not be
          liable for the expenses of more than one separate counsel in any one
          action or series of related actions in the same jurisdiction
          representing the indemnified parties who are parties to such action).
          Anything in this paragraph to the contrary notwithstanding, the
          Company shall not be liable for any settlement of any such claim or
          action effected without its written consent.

               (b) Each Underwriter severally agrees to indemnify, defend and
          hold harmless the Company, its directors and officers, and any person
          who controls the Company within the meaning of Section 15 of the Act
          or Section 20 of the Exchange Act from and against any loss, expense,
          liability or claim (including the reasonable cost of investigation)
          which, jointly or severally, the Company or any such person may incur
          under the Act or otherwise, insofar as such loss, expense, liability
          or claim arises out of or is based upon any untrue statement or
          alleged untrue statement of a material fact contained in and in
          conformity with information furnished in writing by or on behalf of
          such Underwriter through you to the Company expressly for use in the
          Registration Statement (or in the Registration Statement as amended by
          post-effective amendment thereof by the Company) or in a Prospectus,
          or arises out of or is based upon any omission or alleged omission to
          state a material fact in connection with such information required to
          be stated either in such Registration Statement or Prospectus or
          necessary to make such information not misleading.

               If any action is brought against the Company or any such person
          in respect of which indemnity may be sought against any Underwriter
          pursuant to the foregoing paragraph, the Company or such person shall
          promptly notify such Underwriter in writing of the institution of such
          action and such Underwriter shall assume the defense of such action,
          including the employment of counsel and payment of expenses. The
          Company or such person shall have the right to employ its own counsel
          in any such case, but the fees and expenses of such counsel shall be
          at the expense of the Company or such person unless the employment of
          such counsel shall have been authorized in writing by such Underwriter
          in connection with the defense of such action or such Underwriter
          shall not have employed counsel to have charge of the defense or such
          action or such indemnified party or parties shall have reasonably
          concluded that there may be defenses available to it or them which are
          different from or additional to those available to such Underwriter
          (in which case such Underwriter shall not have the

                                      -19-
<PAGE>

          right to direct the defense of such action on behalf of the
          indemnified party or parties), in any of which events such fees and
          expenses shall be borne by such Underwriter and paid as incurred (it
          being understood, however, that such Underwriter shall not be liable
          for the expenses of more than one separate counsel in any one action
          or series of related actions in the same jurisdiction representing the
          indemnified parties who are parties to such action). Anything in this
          paragraph to the contrary notwithstanding, no Underwriter shall be
          liable for any settlement of any such claim or action effected without
          the written consent of such Underwriter.

               (c) If the indemnification provided for in this Section 8 is
          unavailable to an indemnified party under subsections (a) andor (b) of
          this Section 8 in respect of any losses, expenses, liabilities or
          claims referred to therein, then each applicable indemnifying party,
          in lieu of indemnifying such indemnified party, shall contribute to
          the amount paid or payable by such indemnified party as a result of
          such losses, expenses, liabilities or claims (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 Securities or (ii) if the allocation provided by
          clause (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 (i) above but also the relative fault of the
          Company on the one hand and of the Underwriters on the other in
          connection with the statements or omissions which resulted in such
          losses, expenses, liabilities or claims, as well as any other relevant
          equitable considerations. The relative benefits received by the
          Company on the one hand and the Underwriters on the other shall be
          deemed to be in the same proportion as the total proceeds from the
          offering (net of underwriting discounts and commissions but before
          deducting expenses) received by the Company bear to the total
          underwriting discounts and commissions received by the Underwriters.
          The relative fault of the Company on the one hand and of the
          Underwriters on the other shall be determined by reference to, among
          other things, whether the untrue statement or alleged untrue statement
          of a material fact or omission or alleged omission 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
          amount paid or payable by a party as a result of the losses, expenses,
          liabilities and claims referred to above shall be deemed to include
          any legal or other fees or expenses reasonably incurred by such party
          in connection with investigating or defending any claim or action.

               (d) The Company and the Underwriters agree that it would not be
          just and equitable if contribution pursuant to this Section 8 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 subsection (c) above. Notwithstanding the provisions of
          this Section 8, no Underwriter shall be required to contribute any
          amount in excess of the amount by which the total price at which the
          Securities underwritten by such Underwriter and distributed to the
          public were offered to the

                                      -20-
<PAGE>

          public exceeds the amount of any damages which such Underwriter has
          otherwise been required to pay by reason of such untrue statement 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
          Underwriter's obligations to contribute pursuant to this Section 8 are
          several in proportion to their respective underwriting commitments and
          not joint.

               (e) The indemnity and contribution agreements contained in this
          Section 8 and the covenants, warranties and representations of the
          Company contained in this Agreement and the Terms Agreement shall
          remain in full force and effect regardless of any investigation made
          by or on behalf of any Underwriter, or any person who controls any
          Underwriter within the meaning of Section 15 of the Act or Section 20
          of the Exchange Act, or by or on behalf of the Company, its directors
          and officers or any person who controls the Company within the meaning
          of Section 15 of the Act or Section 20 of the Exchange Act, and shall
          survive any termination of this Agreement or the issuance and delivery
          of the Securities. The Company and each Underwriter agree promptly to
          notify the others of the commencement of any litigation or proceeding
          against it and, in the case of the Company, against any of the
          Company's officers and directors in connection with the issuance and
          sale of the Securities, or in connection with the Registration
          Statement or Prospectus.

          9. Notices. Except as otherwise herein provided, all statements,
             -------
     requests, notices and agreements shall be in writing or by telegram and, if
     to the Underwriters, shall be sufficient in all respects if delivered or
     sent to [ ] or to any other Underwriters at their addresses furnished to
     the Company in the Terms Agreement and, if to the Company, shall be
     sufficient in all respects if delivered or sent to the Company at the
     offices of the Company at 1501 N. Hamilton Street, Richmond, Virginia
     23230, Attention: Secretary and General Counsel.

          10. Construction. This Agreement and the Terms Agreement shall be
              ------------
     governed by, and construed in accordance with, the laws of the State of New
     York. The Section headings in this Agreement have been inserted as a matter
     of convenience of reference and are not a part of this Agreement.

          11. Parties at Interest. The Agreement herein set forth and the Terms
              -------------------
     Agreement have been and are made solely for the benefit of the Underwriters
     and the Company and the controlling persons, directors and officers
     referred to in Section 8 hereof, and their respective successors, assigns,
     executors and administrators. No other person, partnership, association or
     corporation (including a purchaser, as such purchaser, from any of the
     Underwriters) shall acquire or have any right under or by virtue of this
     Agreement or the Terms Agreement.

                                      -21-
<PAGE>

          12. Counterparts. This Agreement may be signed by the parties in
              ------------
     counterparts which together shall constitute one and the same agreement
     among the parties.

                                      -22-
<PAGE>

     If the foregoing correctly sets forth the understanding among the Company
     and you, please so indicate in the space provided below for the purpose,
     whereupon this letter and your acceptance shall constitute a binding
     agreement between us.

                                             Very truly yours,

                                             UNIVERSAL CORPORATION

                                             By
                                                ---------------------------
                                             Title:





[REPRESENTATIVE[S] OF THE UNDERWRITERS]





By
   --------------------------------
Title:

                                      -23-
<PAGE>

                                                                      SCHEDULE A



Material Subsidiary                                       Organized Under Law of
- -------------------                                       ----------------------
Universal Leaf Tobacco Company, Incorporated                     Virginia
Blending Services International, Inc.                            Virginia
Universal Leaf Tabacos Ltda.                                     Brazil
Deli Universal, Inc.                                             Virginia
N.V. Deli Universal                                              Netherlands
Jongeneel Holding B.V.                                           Netherlands
Jongeneel B.V.                                                   Netherlands
Ultoco S.A.                                                      Switzerland
Toutiana S.A.                                                    Switzerland
Continental Tobacco S.A.                                         Switzerland
Limbe Leaf Tobacco Company Limited                               Malawi
Zimleaf Holdings (Private) Ltd.                                  Zimbabwe


                                      A-1
<PAGE>

                                                                         ANNEX A

                                 TERMS AGREEMENT

                             [ %] Notes Due [ ], [ ]



                                                                 [Date]





Universal Corporation
1501 North Hamilton Street
Richmond, Virginia 23260

Dear Sirs:

     Universal Corporation, a Virginia corporation (the "Company"), and [ ] have
entered into an Underwriting Agreement (the "Underwriting Agreement"), dated
[   ], relating to the issuance from time to time by the Company of its debt
securities under an indenture (the "Indenture"), dated as of February 1, 1991,
between the Company and The Chase Manhattan Bank (formerly known as Chemical
Bank), as Trustee. This Terms Agreement, relating to the Securities referred to
below, is being entered into pursuant to the Underwriting Agreement. Capitalized
terms used herein and not otherwise defined have the meanings given them in the
Underwriting Agreement.

     [The Representatives] and the several other underwriters named in Schedule
A annexed hereto (the "Underwriters") understand that the Company proposes to
issue and sell $[ ] aggregate principal amount of [ %] Notes Due [ ] (the
"Securities"). Subject to the terms, conditions, representations and warranties
set forth or incorporated by reference herein, the Company agrees to sell to the
Underwriters, and the Underwriters severally agree to purchase from the Company,
the principal amount of the Securities set forth next to such Underwriter's name
in Schedule A hereto at [ ]% of the principal amount thereof (representing the
initial public offering price of [ ]% of the principal amount thereof less an
underwriting discount of [ ]% of the principal amount thereof) plus accrued
interest from [ ], if any, to the Closing Date referred to below. The Prospectus
Supplement ("the Prospectus Supplement") with respect to the Securities is dated
[ ] and includes the Prospectus dated [ ] (the "Basic Prospectus," and together
with the Prospectus Supplement, the "Prospectus"). The Representatives
designated to act on behalf of the several Underwriters pursuant to Section 1(a)
of the Underwriting Agreement and the addresses of such Representatives are set
forth at the end of Schedule B annexed hereto.

     The Underwriters will pay for such Securities upon delivery thereof in New
York, New York at 10:00 a.m. (New York time) on [ ] (the "Closing Date") by wire
transfer of immediately available funds, or at such other time on the Closing
Date as shall be agreed upon in writing by the Company and the Underwriters.

     The Securities shall be issued in book-entry form and shall have terms as
set forth in Schedule B annexed hereto:

                                     A-2-1
<PAGE>

     All provisions contained in the Underwriting Agreement are incorporated by
reference herein in their entirety and shall be deemed to be part of this Terms
Agreement to the same extent as if such provisions had been set forth in full
herein. In the event of a conflict between the Underwriting Agreement and this
Terms Agreement, the terms and provisions of this Terms Agreement shall prevail.

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

     This instrument may be signed by the parties in counterparts which together
shall constitute one and the same agreement between the parties and shall become
effective at such time as each of the parties shall have signed such
counterparts and shall have notified the other party thereof. Delivery of an
executed counterpart of a signature page of this Terms Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this Terms
Agreement.

     Please confirm your agreement herewith by having an authorized officer sign
a copy of this Terms Agreement in the space provided below:

                                                  Very truly yours,

                                                  [REPRESENTATIVE[S]]



                                                  By: [________________________]





                                                  By:
                                                       Name:
                                                       Title:





Accepted and Agreed to as of
the Date First Above Written:

UNIVERSAL CORPORATION



By:



[___________________________]

                                     A-2-2
<PAGE>

                                                                      Schedule A
                                                        (to the Terms Agreement)



     Name                                    Principal Amount of Notes
     ----                                    -------------------------
[Representative(s)]                               $ [       ]

[Underwriter(s)]]                                 $ [       ]

                                           Total: $ [       ]

                                     A-3-1
<PAGE>

                                                                      Schedule B
                                                        (to the Terms Agreement)

Title of the Securities:

     [ %] [Floating Rate] [Zero Coupon] [Notes]
     [Debentures] due [ ], [ ]

Aggregate principal amount:
     [$]

Price to Public:

     [ ]% of the principal amount of the Securities, plus accrued interest[, if
     any,] from [ ] to [ ] [and accrued amortization[, if any,] from [ ] to [ ]

Purchase Price by Underwriters:

     % of the principal amount of the Designated Securities, plus accrued
     interest from [ ] to [ ] [and accrued amortization[, if any,] from [ ] to
     [     ]

Form of Securities:

     [Definitive form to be made available for checking and packaging at least
     twenty-four hours prior to the Time of Delivery at the office of [The
     Depository Trust Company or its designated custodian] [the
     Representatives]]

     [Book-entry only form represented by one or more global securities
     deposited with The Depository Trust Company ("DTC") or its designated
     custodian, to be made available for checking by the Representatives at
     least twenty-four hours prior to the Time of Delivery at the office of
     DTC.]

Specified funds for payment of purchase price:

     Federal (same day) funds

Time of Delivery:

10:00 a.m. (New York City time), [ ], , 20[ ]

Indenture:

     Indenture dated February 1, 1991, between the Company and The Chase
     Manhattan Bank (formerly known as Chemical Bank), as Trustee

Maturity:

Interest Rate:

     [ %] [Zero Coupon] [See Floating Rate Provisions]

Interest Payment Dates:

     [months and dates, commencing ....................., 20  ]

Redemption Provisions:

     [No provisions for redemption]


                                      B-1
<PAGE>

     [The Securities may be redeemed, otherwise than through the sinking fund,
     in whole or in part at the option of the Company, in the amount of [$ ] or
     an integral multiple thereof,

     [on or after [ ], [ ] at the following redemption prices (expressed in
     percentages of principal amount). If [redeemed on or before [ ], [ ]%, and
     if] redeemed during the 12-month period beginning [ ], [ ]

                                            Redemption
                       Year                   Price
                       ----                 ----------

                     ________                ________

                     ________                ________

                     ________                ________


     and thereafter at 100% of their principal amount, together in each case
     with accrued interest to the redemption date.]

     [on any interest payment date falling on or after [ ], [ ], at the election
     of the Company, at a redemption price equal to the principal amount
     thereof, plus accrued interest to the date of redemption.]

     [Other possible redemption provisions, such as mandatory redemption upon
     occurrence of certain events or redemption for changes in tax law]

     [Restriction on refunding]

Sinking Fund Provisions:

     [No sinking fund provisions]

     [The Securities are entitled to the benefit of a sinking fund to retire
     [$         ] principal amount of Securities on [      ] in each of the
     years [      ] through [     ] at 100% of their principal amount plus
     accrued interest [, together with [cumulative] [noncumulative] redemptions
     at the option of the Company to retire an additional [$      ] principal
     amount of Securities in the years [     ] through [     ] at 100% of
     their principal amount plus accrued interest.]

             [If Securities are extendable debt securities, insert--

Extendable provisions:

     Securities are repayable on [ ], [ ] [insert date and years], at the option
     of the holder, at their principal amount with accrued interest. The initial
     annual interest rate will be [ ] %, and thereafter the annual interest rate
     will be adjusted on [ ], [ ] and [ ] to a rate not less than [ ]% of the
     effective annual interest rate on U.S. Treasury obligations with [ ]-year
     maturities as of the [insert date 15 days prior to maturity date] prior to
     such [insert maturity date].]

           [If Securities are floating rate debt securities, insert--

                                      B-2
<PAGE>

Floating rate provisions:

     Initial annual interest rate will be [ ] % through [ ] [and thereafter will
     be adjusted [monthly] [on each [ ], [ ], [ ] and [ ]] [to an annual rate of
     [ ]% above the average rate for [ ]-year [month] [securities] [certificates
     of deposit] issued by [ ] and [ ] [insert names of banks].] [and the annual
     interest rate [thereafter] [from [ ] through [ ]] will be the interest
     yield equivalent of the weekly average per annum market discount rate for
     [ ]-month Treasury bills plus [ ]% of Interest Differential (the excess, if
     any, of (i) the then current weekly average per annum secondary market
     yield for [ ]-month certificates of deposit over (ii) the then current
     interest yield equivalent of the weekly average per annum market discount
     rate for [ ]-month Treasury bills); [from [ ] and thereafter the rate will
     be the then current interest yield equivalent plus [ ]% of Interest
     Differential].]

Defeasance provisions:

     [Include provisions for Full/Covenant Defeasance, if any]

Closing location for delivery of Securities:

Additional Closing Conditions:

Names and addresses of Representatives:

     Representatives:

     Address for Notices, etc.:

[Other Terms]:

                                      B-3
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>INDENTURE
<TEXT>

<PAGE>

                                                                       EXHIBIT 4



                              UNIVERSAL CORPORATION

                                       TO

                              CHEMICAL BANK Trustee

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

                                    INDENTURE

                          Dated as of February 1, 1991

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

                                Senior Securities
<PAGE>

                              UNIVERSAL CORPORATION

                 Certain Sections of this Indenture relating to
                 Sections 310 through 318 of the Trust Indenture
                                  Act of 1939:

                                                                 Indenture
TIA Section                                                       Sections
- -----------                                                      ---------

ss. 310(a)(1)................................................    609
       (a)(2)................................................    609
       (a)(3)................................................    Not Applicable
       (a)(4)................................................    Not Applicable
          (b)................................................    608
ss. 311(a)...................................................    613(a)
          ...................................................    703(b)
ss. 312(a)...................................................    701
          ...................................................    702(a)
       (b)...................................................    702(b)
       (c)...................................................    702(c)
ss. 313(a)...................................................    703(a), 703(b)
       (b)...................................................    703(a), 703(b)
       (c)...................................................    703(b)
       (d)...................................................    703(c)
ss. 314(a)...................................................    704
       (b)...................................................    Not Applicable
       (c)(1)................................................    102
       (c)(2)................................................    102
       (c)(3)................................................    Not Applicable
       (d)...................................................    Not Applicable
       (e)...................................................    102
ss. 315(a)...................................................    601
       (b)...................................................    602
          ...................................................    703(a), 703(b)
       (d)(1)................................................    601
       (d)(2)................................................    601
       (d)(3)................................................    601
       (e)...................................................    514
ss. 316(a) ..................................................    101
       (a)(1)(A).............................................    502
          ...................................................    512
       (a)(1)(B).............................................    513
       (a)(2)................................................    Not Applicable
       (b)...................................................    508
ss. 317(a)(1)................................................    503
       (a)(2)................................................    504
       (b)...................................................    1003
ss. 318(a)...................................................    108

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

                                TABLE OF CONTENTS

 Parties.......................................................................1
 Recitals of the Company.......................................................1

                                   ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 Section 101.        Definitions
         "Act"................................................................2
         "Affiliate"..........................................................2
         "Authenticating Agent"...............................................2
         "Authorized Newspaper"...............................................2
         "Bearer Security"....................................................2
         "Board of Directors".................................................2
         "Board Resolution"...................................................2
         "Book-Entry Security"................................................2
         "Business Day".......................................................3
         "Capitalized Lease"..................................................3
         "Cedel S.A.".........................................................3
         "Commission".........................................................3
         "Common Depositary"..................................................3
         "Company"............................................................3
         "Company Request" or "Company Order".................................3
         "Consolidated Net Tangible Assets"...................................3
         "Corporate Trust Office".............................................3
         "corporation"........................................................3
         "coupon".............................................................3
         "Debt"...............................................................3
         "Defaulted Interest".................................................4
         "Dollar" or "$"......................................................4
         "Euroclear Operator".................................................4
         "Euro-Security"......................................................4
         "Event of Default"...................................................4
         "Exchange Date"......................................................4
         "Federal Bankruptcy Act".............................................4
         "Funded Debt"........................................................4
         "Holder".............................................................4
         "Indebtedness".......................................................4
         "Indenture"..........................................................4
         "interest"...........................................................4
         "Interest Payment Date"..............................................5
         "Liens"..............................................................5
         "Maturity"...........................................................5
         "Obligation".........................................................5
         "Officer"............................................................5
         "Officers' Certificate"..............................................5
         "Opinion of Counsel".................................................5
         "Original Issue Discount Security"...................................5
         "Outstanding"........................................................5
         "Paying Agent".......................................................6
         "Periodic Offering"..................................................6
         "Person".............................................................6


                                       i
<PAGE>

         "Place of Payment"...................................................6
         "possessions"........................................................7
         "Predecessor Security"...............................................7
         "Principal Property".................................................7
         "Redemption Date"....................................................7
         "Redemption Price"...................................................7
         "Registered Security"................................................7
         "Regular Record Date"................................................7
         "Restricted Period"..................................................7
         "Restricted Subsidiaries"............................................7
         "Securities".........................................................8
         "Security Register" and "Security Registrar".........................8
         "Special Record Date"................................................8
         "Stated Maturity"....................................................8
         "Subsidiary".........................................................8
         "Trustee"............................................................8
         "Trust Indenture Act"................................................8
         "United States"......................................................8
         "United States Alien"................................................8
         "Universal Leaf......................................................8
         "U.S. Depository"....................................................9
         "U.S. Government Obligations"........................................9
         "Vice President".....................................................9
         "Voting Stock".......................................................9

Section 102.    Compliance Certificates and Opinions..........................9
Section 103.    Form of Documents Delivered to Trustee.......................10
Section 104.    Acts of Holders; Record Dates................................10
Section 105.    Notices, Etc.. to Trustee and Company........................12
Section 106.    Notice to Holders or Securities; Waiver......................13
Section 107.    Language of Notices, Etc. ...................................14
Section 108.    Conflict with Trust Indenture Act............................14
Section 109.    Effect of Headings and Table of Contents.....................14
Section 110.    Successors and Assigns.......................................14
Section 111.    Separability Clause..........................................14
Section 112.    Benefits of Indenture........................................14
Section 113.    Governing Law................................................14
Section 114.    Legal Holidays...............................................15


                               ARTICLE TWO

                             SECURITY FORMS

Section 201.    Forms Generally..............................................15
Section 202.    Form of Trustee's Certificate of Authentication..............16
Section 203.    Securities in Global Form....................................16
Section 204.    Form of Legend for Book-Entry Securities.....................17


- ----------

NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.

                                      ii
<PAGE>

                                 ARTICLE THREE

                                 THE SECURITIES

Section 301.    Amount Unlimited; Issuable in Series.........................17
Section 302.    Denominations................................................20
Section 303.    Execution, Authentication, Delivery and Dating...............20
Section 304.    Temporary Securities.........................................23
Section 305.    Registration, Registration of Transfer and Exchange..........25
Section 306.    Mutilated, Destroyed, Lost and Stolen Securities
                   and Coupons...............................................28
Section 307.    Payment of Interest; Interest Rights Preserved...............29
Section 308.    Persons Deemed Owners........................................31
Section 309.    Cancellation.................................................31
Section 310.    Computation of Interest......................................32
Section 311.    Judgments in Respect of Specified Currency...................32


                              ARTICLE FOUR

                       SATISFACTION AND DISCHARGE

Section 401.    Satisfaction and Discharge of Indenture......................32
Section 402.    Application of Trust Money...................................34


                              ARTICLE FIVE

                                REMEDIES

Section 501.    Events of Default............................................34
Section 502.    Acceleration of Maturity; Rescission and Annulment...........35
Section 503.    Collection of Indebtedness and Suits for
                   Enforcement by Trustee....................................36
Section 504.    Trustee May File Proofs of Claim.............................37
Section 505.    Trustee May Enforce Claims Without Possession of
                   Securities or Coupons.....................................37
Section 506.    Application of Money Collected...............................37
Section 507.    Limitation on Suits..........................................38
Section 508.    Unconditional Right of Holders to Receive Principal,
                   Premium and Interest......................................38
Section 509.    Restoration of Rights and Remedies...........................39
Section 510.    Rights and Remedies Cumulative...............................39
Section 511.    Delay or Omission Not Waiver.................................39
Section 512.    Control by Holders of Securities.............................39
Section 513.    Waiver of Past Defaults......................................40
Section 514.    Undertaking for Costs........................................40
Section 515.    Waiver of Stay or Extension Laws.............................40


                                      iii
<PAGE>

                                   ARTICLE SIX

                                   THE TRUSTEE

Section 601.   Certain Duties and Responsibilities...........................41
Section 602.   Notice of Defaults............................................41
Section 603.   Certain Rights of Trustee.....................................41
Section 604.   Not Responsible for Recitals or Issuance of Securities........42
Section 605.   May Hold Securities...........................................42
Section 606.   Money Held in Trust...........................................43
Section 607.   Compensation and Reimbursement................................43
Section 608.   Disqualification; Conflicting Interests.......................43
Section 609.   Corporate Trustee Required; Eligibility.......................43
Section 610.   Resignation and Removal; Appointment of Successor.............44
Section 611.   Acceptance of Appointment by Successor........................45
Section 612.   Merger, Conversion, Consolidation or Succession to
                   Business..................................................46
Section 613.   Preferential Collection of Claims Against Company.............46
Section 614.   Appointment of Authenticating Agent...........................47


                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 701.   Company to Furnish Trustee Names and Addresses of Holders.....48
Section 702.   Preservation of Information; Communications to Holders........49
Section 703.   Reports by Trustee............................................49
Section 704.   Reports by Company............................................50


                                  ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801.   Company May Consolidate, Etc., Only on Certain Terms..........50
Section 802.   Successor Corporation Substituted.............................51


                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

Section 901.   Supplemental Indentures Without Consent of Holders............51
Section 902.   Supplemental Indentures with Consent of Holders...............52
Section 903.   Execution of Supplemental Indentures..........................53
Section 904.   Effect of Supplemental Indentures.............................54


                                      iv
<PAGE>

Section 905.   Conformity with Trust Indenture Act...........................54
Section 906.   Reference in Securities to Supplemental Indentures............54


                                  ARTICLE TEN

                                  COVENANTS

Section 1001.  Payment of Principal, Premium and Interest. ..................54
Section 1002.  Maintenance of Office or Agency. .............................54
Section 1003.  Money for Securities Payments to be Held in Trust.............56
Section 1004.  Statement by Officers as to Default...........................57
Section 1005.  Corporate Existence...........................................57
Section 1006.  Maintenance of Properties.....................................57
Section 1007.  Payment of Taxes and Other Claims.............................58
Section 1008.  Limitation on Liens...........................................58
Section 1009.  Limitation on Sale and Leaseback Transactions.................59
Section 1010.  Additional Amounts............................................60
Section 1011.  Waiver of Certain Covenants...................................61


                                ARTICLE ELEVEN

                           REDEMPTION OF SECURITIES

Section 1101.  Applicability of Article......................................61
Section 1102.  Election to Redeem; Notice to Trustee.........................61
Section 1103.  Selection by Trustee of Securities to be Redeemed.............61
Section 1104.  Notice of Redemption..........................................62
Section 1105.  Deposit of Redemption Price...................................63
Section 1106.  Securities Payable on Redemption Date.........................63
Section 1107.  Securities Redeemed in Part...................................64


                                ARTICLE TWELVE

                                 SINKING FUNDS

Section 1201.  Applicability of Article......................................64
Section 1202.  Satisfaction of Sinking Fund Payments with Securities.........65
Section 1203.  Redemption of Securities for Sinking Fund.....................65


                               ARTICLE THIRTEEN

                       MEETINGS OF HOLDERS OF SECURITIES

Section 1301.  Purposes for Which Meetings May be Called.....................65
Section 1302.  Call, Notice and Place of Meetings............................65
Section 1303.  Persons Entitled to Vote at Meetings..........................66
Section 1304.  Quorum; Action................................................66



                                       v
<PAGE>

Section 1305.  Determination of Voting Rights; Conduct and
                   Adjournment of Meetings...................................67
Section 1306.  Counting Votes and Recording Action of Meetings...............68


                               ARTICLE FOURTEEN

                      DEFEASANCE AND COVENANT DEFEASANCE

Section 1401.  Company's Option to Effect Defeasance or
                   Covenant Defeasance.......................................69
Section 1402.  Defeasance and Discharge......................................69
Section 1403.  Covenant Defeasance...........................................69
Section 1404.  Conditions to Defeasance or Covenant Defeasance...............70
Section 1405.  Deposited Money and U.S. Government Obligations to
                   be Held in Trust;
               Other Miscellaneous Provisions................................72

Testimonials.................................................................72
Signatures and Seals.........................................................73

Exhibit A.  Form of Registered Security Which is Not an Original
                   Issue Discount Security..................................A-1
Exhibit B.  Form of Registered Security Which Is an Original
                   Issue Discount Security..................................B-1
Exhibit C.  Form of Bearer Security Which Is Not an Original
                   Issue Discount Security
                        and Form of Related Coupon..........................C-1
Exhibit D.  Form of Bearer Security Which Is an Original
                   Issue Discount Security and Form of Related Coupon.......D-1
Exhibit E.  Form of Temporary Global Security...............................E-1
Exhibit F.  Form of Permanent Global Security...............................F-1
Exhibit G.  Forms of Certification..........................................G-1


                                      vi
<PAGE>

         INDENTURE, dated as of February 1, 1991, between Universal Corporation,
a corporation duly organized and existing under the laws of the Commonwealth of
Virginia (herein called the "Company"), having its principal office at Hamilton
Street at Broad, Richmond, Virginia 23230, and Chemical Bank, a banking
corporation duly organized and existing under the laws of the State of New York,
as trustee (herein called the "Trustee").

                            RECITALS OF THE COMPANY

         The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.

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

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                  ARTICLE ONE

                       DEFINITIONS AND OTHER PROVISIONS
                            OF GENERAL APPLICATION

Section 101.      Definitions.

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

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

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

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

                  (4) the words "herein", "hereof" and "hereunder" and other
         words of similar import refer to this Indenture as a whole and not to
         any particular Article, Section or other subdivision.
<PAGE>

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

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

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

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

         "Authorized Newspaper" means a newspaper, in the English language or in
an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.

         "Bearer Security" means any Security in the form set forth in either
Exhibit C, Exhibit D, Exhibit E or Exhibit F to this Indenture or established
pursuant to Section 201 which is payable to bearer.

         "Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board; provided, however, that when
used with respect to Universal Leaf in the definitions of "Board Resolution" and
"Principal Property", "Board of Directors" means either the board of directors
of Universal Leaf or any duly authorized committee of that board.

         "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee; provided, however, that when used
with respect to Universal Leaf in the definition of "Principal Property" below,
"Board Resolution" means a copy of a resolution certified by the Secretary or an
Assistant Secretary of Universal Leaf to have been duly adopted by the Board of
Directors of Universal Leaf and to be in full force and effect on the date of
such certification, and delivered to the Trustee.

         "Book-Entry Security" means a Security bearing the legend specified in
Section 204, evidencing all or part of a series of Securities, issued to the
U.S. Depository for such series or its nominee, and registered in the name of
such U.S. Depository or nominee. Book-


                                       2
<PAGE>

Entry Securities shall not be deemed to be securities in global form for
purposes of Sections 201 and 203 and Article Three of the Indenture.

         "Business Day", when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment or other location are
authorized or obligated by law or executive order to close.

         "Capitalized Lease" means any lease which is, in accordance with
generally accepted accounting principles, capitalized on the balance sheet of
the lessee.

         "Cedel S.A." means Centrale de Livraison de Valeurs Mobilieres, S.A.

         "Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.

         "Common Depositary" has the meaning specified in Section 304.

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

         "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by two Officers or by any Officer and either
an Assistant Treasurer or Assistant Secretary of the Company, and delivered to
the Trustee.

         "Consolidated Net Tangible Assets" means shareholders' equity as set
forth on the most recent consolidated balance sheet of Universal Leaf and its
subsidiaries as prepared in accordance with generally accepted accounting
principles less all intangible amounts representing goodwill, trade names,
trademarks and patents.

         "Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of this Indenture is located at Room 1820, 55 Water
Street, New York, New York 10041.

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

         "coupon" means any interest coupon appertaining to a Bearer Security.

         "Debt" means (a) all items of indebtedness for money borrowed and all
Capitalized Leases, whether now existing or hereafter created, and (b) all items
of indebtedness for money borrowed and Capitalized Leases of another which are
guaranteed, directly or


                                       3
<PAGE>

indirectly, in any manner or are in effect guaranteed through any agreement or
other arrangement, even if not designated as a guarantee, designed to provide
funds for or to secure payment or performance of such indebtedness for money
borrowed or Capitalized Leases of another.

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

         "Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.

         "Euroclear Operator" means Morgan Guaranty Trust Company of New York,
Brussels office, as the operator of the Euroclear System.

         "Euro-Security" means any Bearer Security, any Security initially
represented by a Security in temporary global form exchangeable for Bearer
Securities and any Security in permanent global form exchangeable for Bearer
Securities.

         "Event of Default" has the meaning specified in Section 501.

         "Exchange Date" has the meaning specified in Section 304.

         "Federal Bankruptcy Act" means Title 11 of the United States Code.

         "Funded Debt" means all Debt maturing more than one year after the date
of determination thereof and all Debt, regardless of its term, renewable by the
obligor pursuant to the terms thereof for more than one year after the date of
the creation of the Debt which would, in accordance with generally accepted
accounting principles, be classified as long-term debt.

         "Holder", when used with respect to any Security, means in the case of
a Registered Security the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.

         "Indebtedness" has the meaning specified in Section 1008.

         "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be part
of and govern this instrument and any such supplemental indenture, respectively.
The term "Indenture" shall also include the terms of a particular series of
Securities as contemplated by Section 301.

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


                                       4
<PAGE>

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

         "Liens" has the meaning specified in Section 1008.

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

         "Obligation" means indebtedness for money borrowed or indebtedness
evidenced by a bond, note, debenture or other evidence of indebtedness.

         "Officer" means the President and Chief Executive Officer, the
Executive Vice President, any Vice President, the Secretary and General Counsel,
the Treasurer, or the Controller of the Company.

         "Officers' Certificate" means a certificate signed by two Officers or
by any Officer and either an Assistant Treasurer or an Assistant Secretary of
the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1004 shall be the principal
executive, financial or accounting officer of the Company.

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

         "Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.

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

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

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

               (iii) Securities which have been defeased pursuant to Section
          1402 hereof; and


                                       5
<PAGE>

               (iv) Securities which have been paid pursuant to Section 306 or
          in exchange for or in lieu of which other Securities have been
          authenticated and delivered pursuant to this Indenture, other than any
          such Securities in respect of which there shall have been presented to
          the Trustee proof satisfactory to it that such Securities are held by
          a bona fide purchaser in whose hands such Securities are valid
          obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
- -----------------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Securities (i) the principal amount
of an Original Issue Discount Security that shall be deemed to be Outstanding
shall be the amount of the principal thereof that would be due and payable as of
the date of such determination upon acceleration of the Maturity thereof
pursuant to Section 502, (ii) the principal amount of a Security denominated in
a foreign currency or currency unit shall be the U.S. dollar equivalent,
determined as of the date of original issuance of such Security in accordance
with Section 301 hereof, of the principal amount of such Security (or, in the
case of an Original Issue Discount Security denominated in a foreign currency or
currency unit, the U.S. dollar equivalent, determined as of the date of original
issuance of such Security of the amount determined as provided in (i) above),
and (iii) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, or upon any such
determination as to the presence of a quorum, only Securities which the Trustee
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.

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

         "Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including without
limitation the rate or rates of interest or formula for determining the rate or
rates of interest thereon, if any, the Stated Maturity or Maturities thereof and
the redemption provisions, if any, with respect thereto, are to be determined by
the Company upon the issuance of such Securities.

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

         "Place of Payment", when used with respect to the Securities of any
series, means the place or places where, subject to the provisions of Section
1002, the principal of and any premium and interest on the Securities of that
series are payable as specified as contemplated by Section 301.



                                       6
<PAGE>

         "possessions" of the United States include Puerto Rico, the U.S. Virgin
Islands, Guam, American Samoa, Wake Island and Northern Mariana Islands.

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

         "Principal Property" with respect to any Person means (i) any capital
stock of a subsidiary of Universal Leaf owned by such Person and (ii) any
manufacturing, packing or processing plant or facility of any character or any
warehouse or any other storage facility of any character owned or leased under a
Capitalized Lease by such Person and all land and fixtures related thereto, the
gross book value (without deduction of any depreciation reserves) of which
capital stock, plant, facility or warehouse on the date as of which the
determination is being made exceeds 1% of Consolidated Net Tangible Assets,
other than any such capital stock, plant, facility or warehouse or portion
thereof which, in the opinion of the Boards of Directors of the Company and of
Universal Leaf, declared by Board Resolution, is not of material importance to
the total business conducted by the Restricted Subsidiaries taken together with
all other capital stock, plants, facilities and warehouses previously so
declared.

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

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

         "Registered Security" means any Security in the form set forth in
either Exhibit A., Exhibit B or Exhibit F to this Indenture or established
pursuant to Section 201 which is registered in the Security Register.

         "Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of any series means the date specified for
that purpose as contemplated by Section 301.

         "Restricted Period" has the meaning given to it in United States
Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7).

         "Restricted Subsidiaries" means Universal Leaf Tobacco Company,
Incorporated, its successor Persons, and Universal Leaf Tobacco Company,
Incorporated's subsidiaries, and their successor Persons, including, without
limitation, transferees of their Principal Property which are Affiliates of the
Company and/or Universal Leaf, but excluding any subsidiaries organized under
any jurisdiction other than the United States or Brazil of which less than

                                       7
<PAGE>

66-2/3% of the Voting Stock is owned, directly or indirectly, by Universal Leaf,
and "Restricted Subsidiary" means any one of the Restricted Subsidiaries.

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

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

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

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

         "Subsidiary" means a corporation or business trust a majority of the
outstanding Voting Stock of which is owned, directly or indirectly, by the
Company or one or more of its subsidiaries, or by the Company and one or more of
its subsidiaries.

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

         "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

         "United States" means the United States of America (including the
States and the District of Columbia).

         "United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership to the extent that one or more of its members is, for United States
Federal income tax purposes, a foreign corporation, a non-resident alien
individual or a non-resident alien fiduciary of a foreign estate or trust.

         "Universal Leaf "means Universal Leaf Tobacco Company, Incorporated, a
Virginia corporation, and any Affiliate of the Company and/or Universal Leaf
with which Universal Leaf shall consolidate or into which it shall merge or to
which it shall transfer 40% or more of its consolidated assets.

                                       8
<PAGE>

         "U.S. Depository" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Securities, the Person designated as U.S. Depository by the Company pursuant to
Section 301, which must be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, and if at any time there is more than one such
Person, "U.S. Depository" as used with respect to the Securities of any series
shall mean the U.S. Depository with respect to the Securities of such series.

         "U.S. Government Obligations" has the meaning specified in Section
1404.

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

         "Voting Stock" means stock having voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.

Section 102. Compliance Certificates and Opinions.

         Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture (other than in connection with the delivery of
any Security offered in a Periodic Offering to the Trustee for authentication
pursuant to Section 303), the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust Indenture Act. Each
such certificate or opinion shall be given in the form of an Officers'
Certificate, if to be given by an officer of the Company, or an Opinion of
Counsel, if to be given by counsel, and shall comply with the requirements of
the Trust Indenture Act and any other requirements set forth in this Indenture.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include

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

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

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

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

                                       9
<PAGE>

Section 103. Form of Documents Delivered to Trustee.

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

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

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

Section 104. Acts of Holders; Record Dates.

         (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of such series may, alternatively, be embodied in and evidenced by the
record of Holders of Securities of such series voting in favor thereof, either
in person or by proxies duly appointed in writing, at any meeting of Holders of
Securities of such series duly called and held in accordance with the provisions
of Article Thirteen, or a combination of such instruments and any such record.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered to
the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments and any such record (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments and so voting at any such
meeting. Proof of execution of any such instrument or of a writing appointing
any such agent or proxy, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

                                       10
<PAGE>

The record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 1306.

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

         (c) The principal amount and serial numbers of Registered Securities
held by any Person, and the date of holding the same, shall be proved by the
Security Register.

         (d) The principal amount and serial numbers of Bearer Securities held
by any Person, and the date of holding the same may be proved by the production
of such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or .other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The principal amount and
serial numbers of Bearer Securities held by any Person, and the date of holding
the same, may also be proved in any other manner which the Trustee deems
sufficient.

         (e) 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 Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.

         (f) With respect to the Securities of any Series all or part of which
are represented by Book-Entry Securities, the following provisions shall apply:

                  (1) Upon receipt by the Trustee of (i) any written notice
         directing the time, method or place of conducting any proceeding or
         exercising any trust or power pursuant to Section 512 with respect to
         Securities of such series or (ii) any written demand, request or notice
         with respect to any matter on which the Holders of Securities of such
         series are entitled to act under this Indenture, in each case from

                                       11
<PAGE>

         Holders of less than, or proxies representing less than, the requisite
         principal amount of Outstanding Securities of such series entitled to
         give such demand, request or notice, the Trustee shall establish a
         record date for determining Holders of Outstanding Securities of such
         series entitled to join in such demand, request or notice, which record
         date shall be the close of business on the day the Trustee receives
         such demand, request or notice. The Holders on such record date, or
         their duly designated proxies, and only such Persons, shall be entitled
         to join in such demand, request or notice whether or not such Holders
         remain Holders after such record date; provided, however, that unless
         the Holders of the requisite principal amount of Outstanding Securities
         of such series shall have joined in such demand, request or notice
         prior to the day which is the ninetieth day after such record date,
         such demand, request or notice shall automatically and without further
         action by any Holder be cancelled and of no further effect. Nothing in
         this paragraph shall prevent a Holder, or a proxy of a Holder, from
         giving, (i) after the expiration of such 90-day period, a new demand,
         request or notice identical to a demand, request or notice which has
         been cancelled pursuant to the proviso to the preceding sentence or
         (ii) during any such 90-day period, a new demand, request or notice
         contrary to or different from such demand, request or notice, in either
         of which events a new record date shall be established pursuant to the
         provisions of this clause (1).

                  (2) The Company may, but shall not be obligated to, direct the
         Trustee to establish a record date for the purpose of determining the
         Persons entitled to (i) waive any past default with respect to the
         Securities of such series in accordance with Section 513 of the
         Indenture, (ii) consent to any supplemental indenture in accordance
         with Section 902 of the Indenture or (iii) waive any term, condition or
         provision of any covenant in accordance with Section 1011 of the
         Indenture. If a record date is fixed, the Holders on such record date,
         or their duly designated proxies, and only such Persons, shall be
         entitled to waive any such past default, consent to any such
         supplemental indenture or waive any such term, condition or provision,
         whether or not such Holder remains a Holder after such record date;
         provided, however, that unless such waiver or consent is obtained from
         the Holders, or duly designed proxies, of the requisite principal
         amount of Outstanding Securities of such series prior to the date which
         is the ninetieth day after such record date, any such waiver or consent
         previously given shall automatically and without further action by any
         Holder be cancelled and of no further effect.

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

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

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

                                      12
<PAGE>

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

Section 106. Notice to Holders or Securities; Waiver.

         Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event,

                  (1) such notice shall be sufficiently given to Holders of
         Registered Securities if in writing and mailed, first-class postage
         prepaid, to each Holder of a Registered Security affected by such
         event, at the address of such Holder as it appears in the Security
         Register, not earlier than the earlier date, and not later than the
         latest date, prescribed for the giving of such notice; and

                  (2) such notice shall be sufficiently given to Holders of
         Bearer Securities if published on at least two Business Days in an
         Authorized Newspaper in The City of New York and in such other city or
         cities as may be specified in such Securities, the first such
         publication to be not earlier than the earliest date, and not later
         than the latest date, prescribed for the giving of such notice.

         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 to
Holders of Registered Securities by mail, then such notification as shall be
made with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. In any case where notice to Holders of
Registered Securities is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder of a Registered
Security shall affect the sufficiency of such notice with respect to other
Holders of Registered Securities or the sufficiency of any notice to Holders of
Bearer Securities given as provided herein.

         In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification as shall be given with the approval of the Trustee
shall constitute sufficient notice to such Holders for every purpose hereunder.
Neither the failure to give notice by publication to Holders of Bearer
Securities as provided above, nor any defect in any notice so published, shall
affect the sufficiency of any notice to Holders of Registered Securities given
as provided herein.

         Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Such waivers of notice by Holders of

                                      13
<PAGE>

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

Section 107. Language of Notices, Etc.

         Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.

Section 108. Conflict with Trust Indenture Act.

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

Section 109. 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 110. Successors and Assigns.

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

Section 111. Separability Clause.

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

Section 112. Benefits of Indenture.

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

Section 113. Governing Law.

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

                                      14
<PAGE>

Section 114. Legal Holidays.

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


                                  ARTICLE TWO

                                 SECURITY FORMS

Section 201. Forms Generally.

         The Registered Securities, if any, of each series, the Bearer
Securities, if any, of each series and related coupons, the temporary global
Securities of each series, if any, the permanent global Securities of each
series, if any, and the Book-Entry Securities of each series, if any, shall be
in substantially the forms set forth in Exhibit A, B, C, D, E or F, as
applicable, to this Indenture, or in such other form as shall be established by
or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities or coupons, as evidenced by their execution
of the Securities or coupons. If the forms of Securities or coupons of any
series are established by action taken pursuant to a Board Resolution, a copy of
an appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities or coupons.

         Unless otherwise specified as contemplated by Section 301, Securities
in bearer form shall have interest coupons attached.

         The definitive Securities and coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities or
coupons, as evidenced by their execution of such Securities or coupons.

                                      15
<PAGE>

Section 202. Form of Trustee's Certificate of Authentication.

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

         This is one of the Securities of a series issued under the Indenture
described herein.

                                   CHEMICAL BANK,
                                   as Trustee


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

Section 203. Securities in Global Form.

         If Securities of a series are issuable in global form, as specified as
contemplated by Section 301, then, notwithstanding clause (10) of Section 301
and the provisions of Section 302, any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities represented thereby may from time to time be reduced to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount,
or any increase or decrease in the amount, of Outstanding Securities represented
thereby shall be made by the Trustee or the Security Registrar in such manner
and upon instructions given by such Person or Persons as shall be specified
therein or in the Company Order to be delivered to the Trustee pursuant to
Section 303 or Section 304. Subject to the provisions of Section 303 and, if
applicable, Section 304, the Trustee or the Security Registrar shall deliver and
redeliver any Security in permanent global form in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or Section
304 has been, or simultaneously is, delivered, any instructions by the Company
with respect to endorsement or delivery or redelivery of a Security in global
form shall be in writing but need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel.

         The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee or the
Security Registrar the Security in global form together with written
instructions (which need not comply with Section 102 and need not be accompanied
by an Opinion of Counsel) with regard to the reduction in the principal amount
of Securities represented thereby, together with the written statement
contemplated by the last sentence of Section 303.

         Notwithstanding the provisions of Sections 201 and 307, unless
otherwise specified as contemplated by Section 301, payment of principal of and
any premium and interest on

                                      16
<PAGE>

any Security in permanent global form shall be made to the Person or Persons
specified therein.

Section 204. Form of Legend for Book-Entry Securities.

         Any Book-Entry Security authenticated and delivered hereunder shall
bear a legend in substantially the following form:

                  "This Security is a Book-Entry Security within the meaning of
         the Indenture hereinafter referred to and is registered in the name of
         a U.S. Depository or a nominee of a U.S. Depository. This Security is
         exchangeable for Securities registered in the name of a Person other
         than the U.S. Depository or its nominee only in the limited
         circumstances described in the Indenture, and no transfer of this
         Security (other than a transfer of this Security as a whole by the U.S.
         Depository to a nominee of the U.S. Depository or by a nominee of the
         U.S. Depository to the U.S. Depository or another nominee of the U.S.
         Depository) may be registered except in such limited circumstances."


                                 ARTICLE THREE

                                 THE SECURITIES

Section 301. Amount Unlimited; Issuable in Series.

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

         The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series:

                  (1) the title of the Securities of the series (which shall
          distinguish the Securities of the series from all other Securities);

                  (2) any limit upon the aggregate principal amount of the
         Securities of the series which may be authenticated and delivered under
         this Indenture (except for Securities authenticated and delivered upon
         registration of transfer of, or in exchange for, or in lieu of, other
         Securities of the series pursuant to Section 304, 305, 306, 906 or 1107
         and except for any Securities which, pursuant to Section 303, are
         deemed never to have been authenticated and delivered hereunder);

                  (3) whether Securities of the series are to be issuable as
         Registered Securities, Bearer Securities or both, whether any
         Securities of the series are to be issuable initially in temporary
         global form with or without coupons or as Book-Entry Securities and, if
         so, the name of the Common Depository or U.S. Depository with respect
         to any such temporary global Security or any such Book-Entry Security,

                                      17
<PAGE>

         respectively, and whether any Securities of the series are to be
         issuable in permanent global form with or without coupons or as a
         Book-Entry Security and, if so, whether beneficial owners of interests
         in any such permanent global Security or Book-Entry Security may
         exchange such interests for Securities of such series and of like tenor
         of any authorized form and denomination and the circumstances under
         which any such exchanges may occur, if in addition to those provided in
         Section 305 and the name of the Common Depositary or the U.S.
         Depository with respect to any such permanent global Security or
         Book-Entry Security, as the case may be, and, notwithstanding Section
         303 or any other provision of this Indenture relating thereto, the form
         of the certificates set forth in Exhibits G.1 and G.2 and the time,
         manner and requirements for delivery of any such certificates;

                  (4) the Person to whom any interest on any Registered Security
         of the series shall be payable, if other than the Person in whose name
         that Security (or one or more Predecessor Securities) is registered at
         the close of business on the Regular Record Date for such interest, the
         manner in which, or the Person to whom, any interest on any Bearer
         Security of the series shall be payable, if otherwise than upon
         presentation and surrender of the coupons appertaining thereto as they
         mature, the extent to which, or the manner in which, any interest
         payable on a temporary global Security on an Interest Payment Date will
         be paid if other than in the manner provided in Section 304 and the
         extent to which, or the manner in which, any interest payable on a
         permanent global Security on an Interest Payment Date will be paid;

                  (5) the date or dates on which the principal of the Securities
         of the series is payable;

                  (6) the rate or rates at which the Securities of the series
         shall bear interest, if any, or the formula pursuant to which such rate
         or rates shall be determined, the date or dates from which any such
         interest shall accrue, the Interest Payment Dates on which any such
         interest shall be payable and the Regular Record Date for any interest
         payable on any Registered Securities on any Interest Payment Date;

                  (7) the place or places where, subject to the provisions of
         Sections 114 and 1002, the principal of and any premium and interest on
         Securities of the series shall be payable, any Registered Securities of
         the series may be surrendered for registration of transfer, Securities
         of the series may be surrendered for exchange and notices and demands
         to or upon the Company in respect of the Securities of the series and
         this indenture may be served;

                  (8) the period or periods within which, the price or prices at
         which and the terms and conditions upon which Securities of the series
         may be redeemed, in whole or in part, at the option of the Company;

                  (9) the obligation, if any, of the Company to redeem or
         purchase Securities of the series pursuant to any sinking fund or
         analogous provisions or at the option of a Holder thereof and the
         period or periods within which, the price or prices at

                                      18
<PAGE>

         which and the terms and conditions upon which Securities of the series
         shall be redeemed or purchased, in whole or in part, pursuant to such
         obligation:

                  (10) the denominations in which any Registered Securities of
         the series shall be issuable, if other than denomination of $1,000 and
         any integral multiple thereof, and the denomination or denominations in
         which any Bearer Securities of the series shall be issuable, if other
         than the denomination of $5,000;

                  (11) the currency or currencies, including currency units, in
         which payment of the principal of and any premium and interest on the
         Securities of the series shall be payable if other than the currency of
         the Untied States of America;

                  (12) if the principal of and any premium or interest on the
         Securities of the series are to be payable, at the election of the
         Company or a Holder thereof, in a currency or currencies, including
         currency units, other than that or those in which the Securities are
         stated to be payable, the currency or currencies in which payment of
         the principal of and any premium and interest on Securities of such
         series as to which such election is made shall be payable, and the
         periods within which and the terms and conditions upon which such
         election is to be made;

                  (13) if the amount of payments of principal of and any premium
         or interest on the Securities of the series may be determined with
         reference to an index, the manner in which such amounts shall be
         determined;

                  (14) if other than the principal amount thereof, the portion
         of the principal amount of any Securities of the series which shall be
         payable upon declaration of acceleration of the Maturity thereof
         pursuant to Section 502;

                  (15) any limitation on the application of either or both of
         Sections 1402 and 1403 to the Securities of the series;

                  (16) the application, if any, of Section 311 to the Securities
         of the series; and

                  (17) any other terms of the series (which terms shall not be
         inconsistent with the provisions of this Indenture other than any
         provisions of this Indenture relating to the time, manner and
         requirements for delivery of the certificates set forth in Exhibits G1
         and G.2).

         All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to the Board Resolution referred to above and (subject
to Section 303) set forth, or determined in the manner provided, in the
Officers' Certificate referred to above or in any such indenture supplemental
hereto.

         If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the

                                      19
<PAGE>

Secretary or an Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Officers' Certificate setting forth the terms
or the manner of determining the terms of the series.

         With respect to Securities of a series offered in a Periodic Offering,
the Board Resolution (or action taken pursuant thereto), Officers' Certificate
or supplemental indenture referred to above may provide general terms or
parameters for Securities of such series and provide either that the specific
terms of particular Securities of such series shall be specified in a Company
Order or that such terms shall be determined by the Company in accordance with
other procedures specified in a Company Order as contemplated by the third
paragraph of Section 303.

Section 302. Denominations.

         Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, any Registered Securities of a series shall be
issuable in denominations of $1,000 and any integral multiple thereof and any
Bearer Securities of a series shall be issuable in the denomination of $5,000.

Section 303. Execution, Authentication, Delivery and Dating.

         The Securities shall be executed on behalf of the Company by any
Officer, under its corporate seal reproduced thereon attested by its Secretary
(provided that the Secretary shall not attest his or her own signature as an
Officer) or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile. Coupons shall bear the
facsimile signature of the Secretary or one of the Assistant Secretaries of the
Company.

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

         At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupons appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that in
the case of Securities offered in a Periodic Offering, the Trustee shall
authenticate and deliver such Securities from time to time in accordance with
such other procedures (including, without limitation, the receipt by the Trustee
of oral or electronic instructions from the Company or its duly authorized
agents, promptly confirmed in writing) acceptable to the Trustee as may be
specified by or pursuant to a Company Order delivered to the Trustee prior to
the time of the first authentication of Securities of such series; provided
further, however, that, in connection with its sale during the Restricted
Period, no Euro-Security shall be delivered to any location in the United States
or its

                                      20
<PAGE>

possessions; and provided further, however, that a Euro-Security (other than a
Security in temporary global form) may be delivered in connection with its sale
during the Restricted Period only if, on the earlier of the date of such
delivery or the first actual payment of interest by the Company on the
Euro-Security, (x) the Person entitled to physical delivery of such
Euro-Security (which, in the case of a Euro-Security to be received in exchange
for all or a portion of a Security in temporary global form, shall be the
account holder with the Euroclear Operator or Cedel S.A. to whose account all or
such portion of such Security in temporary global form has been credited) shall
have furnished a certificate in the form set forth in Exhibit G.1 to this
Indenture, dated no earlier than 15 days prior to the date on which such
Euro-Security is delivered or, in the case of a Euro-Security to be received in
exchange for all or a portion of a temporary global Security, no earlier than 15
days prior to the date on which the Euroclear Operator or Cedel S.A., as the
case may be, furnish to the Common Depository, in accordance with the procedures
established in Section 304, a certificate in the form set forth in Exhibit G.2
to this Indenture that relates to all or such portion of such temporary global
Security, and (y) the Company does not have actual knowledge that the
information contained in such certificate is false. If any Security shall be
represented by a permanent global Security, then, for purposes of this Section
and Section 304, the notation of a beneficial owner's interest therein upon
original issuance of such Security or upon exchange of a portion of a temporary
global Security shall be deemed to be physical delivery in connection with its
sale during the Restricted Period. Except as permitted by Section 306, the
Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and cancelled.

         If the forms or terms of the Securities of the series and any related
coupons have been established in or pursuant to one or more Board Resolutions as
permitted by Sections 201 and 301, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating:

                  (a) if the forms of such Securities and any coupons have been
         established by or pursuant to a Board Resolution as permitted by
         Section 201, that such forms have been established in conformity with
         the provisions of this Indenture;

                  (b) if the terms of such Securities and any coupons have been,
         or in the case of Securities of a series offered in a Periodic
         Offering, will be, established by or pursuant to a Board Resolution as
         permitted by Section 301, that such terms have been, or in the case of
         Securities of a series offered in a Periodic Offering, will be,
         established in conformity with the provisions of this Indenture,
         subject, in the case of Securities of a series offered in a Periodic
         Offering, to any conditions specified in such Opinion of Counsel; and

                  (c) that such Securities, together with any coupons
         appertaining thereto, when authenticated and delivered by the Trustee
         and issued by the Company in the manner and subject to any conditions
         specified in such Opinion of Counsel, will constitute valid and legally
         binding obligations of the Company, enforceable in

                                      21
<PAGE>

         accordance with their terms, subject, as to enforcement, to bankruptcy,
         insolvency, fraudulent transfer, reorganization, moratorium, and
         similar laws of general applicability relating to or affecting the
         enforcement of creditors' rights and to general equity principles and
         except further as enforcement thereof may be limited by (A)
         requirements that a claim with respect to any Securities denominated
         other than in U.S. dollars (or a foreign currency or foreign currency
         unit judgment in respect of such claim) be converted into United States
         dollars at a rate of exchange prevailing on a date determined pursuant
         to applicable law or (B) governmental authority to limit, delay or
         prohibit the making of payments in foreign currency or currency units
         or payments outside the United States.

If such forms or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

         Notwithstanding the provisions of Section 301 and of the two preceding
paragraphs, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraphs at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.

         With respect to Securities of a series offered in a Periodic Offering,
the Trustee may rely, as to the authorization by the Company of any of such
Securities, the form and terms thereof and the legality, validity, binding
effect and enforceability thereof, upon the Opinion of Counsel and the other
documents delivered pursuant to Sections 201 and 301 and this Section, as
applicable, in connection with the first authentication of Securities of such
series.

         Each Registered Security shall be dated the date of its authentication;
and each Bearer Security shall be dated as of the date of original issuance of
the first Security of such series to be issued except as otherwise provided
pursuant to Section 301 in connection with the Securities of any series.

         No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security, or the Security to which such coupon appertains, a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 309 together with a written
statement (which need not comply with Section 102 and need not be accompanied by
an Opinion of Counsel) stating that such Security has never been issued and sold
by the Company, for all purposes of this Indenture

                                      22
<PAGE>

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

Section 304.      Temporary Securities.

         Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities or coupons may determine, as evidenced by their execution of such
Securities or coupons. In the case of any series issuable as Bearer Securities,
such temporary Securities shall be delivered only in compliance with the
conditions set forth in Section 303 and may be in global form.

         Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company maintained pursuant to Section 1002 in a Place of Payment for such
series for the purpose of exchanges of Securities of such series, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series (accompanied by any unmatured coupons appertaining
thereto) the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like aggregate principal amount of definitive
Securities of the same series and of like tenor of authorized denominations;
provided, however, that no definitive Bearer Security shall be delivered in
exchange for a temporary Registered Security; and provided further, however,
that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 303.

         If temporary Securities of any series are issued in global form, any
such temporary global Security shall, unless otherwise provided therein, be
delivered to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefits of the Euroclear Operator and CEDEL S.A., for
credit to the respective accounts for the beneficial owners of such Securities
(or to such other accounts as they may direct).

         Without unnecessary delay but in any event not later than fifteen (15)
days before the date specified in, or determined pursuant to the terms of, any
such temporary global Security of a series (the "Exchange Date"), the Company
shall deliver to the Trustee definitive Securities of that series, in aggregate
principal amount equal to the principal amount of such temporary global
Security, executed by the Company. On or after the Exchange Date such temporary
global Security shall be presented and surrendered by the Common Depositary to
the Trustee, as the Company's agent for such purpose or to the


                                      23
<PAGE>

Security Registrar, to be exchanged, in whole or from time to time in part, for
definitive Securities of such series without charge and the Trustee shall
authenticate and deliver, in exchange for each portion of such temporary global
Security, a like aggregate principal amount of definitive Securities of the same
series of authorized denominations and of like tenor as the portion of such
temporary global Security to be exchanged; provided, however, that, unless
otherwise specified in such temporary global Security, upon such presentation by
the Common Depositary, such temporary global Security must be accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by the
Euroclear Operator as to the portion of such temporary global Security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL S.A. as _________of such temporary global
Security held for its account then to be exchanged _________in the form set
forth in Exhibit G.2 to this Indenture. The definitive Securities to be
delivered in exchange for any such temporary global Security shall be in bearer
form, registered form, permanent global bearer form or permanent global
registered form, or any combination thereof, as specified as contemplated by
Section 301, and, if any combination thereof is so specified, as requested by
the beneficial owner thereof; provided, however, that definitive Securities
shall be delivered in exchange for a portion of a temporary global Security only
in compliance with the requirements of Section 303.

         Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor upon the receipt by the Euroclear Operator or CEDEL S.A., as the case
may be, after the Exchange Date of a certificate in the form set forth in
Exhibit G.1 to this Indenture signed by the account holder and dated no earlier
than 15 days prior to the date on which the Euroclear Operator or CEDEL S.A., as
the case may be, furnishes to the Common Depositary in accordance with the
preceding paragraph a certificate in the form set forth in Exhibit G.2 to this
Indenture that relates to the interest to be exchanged for definitive
Securities. Copies of the certificate in the form set forth in Exhibit G.1 to
this Indenture shall be available from the offices of the Euroclear Operator and
CEDEL S.A., the Trustee, any Authenticating Agent appointed for such series of
Securities and each Paying Agent. Unless otherwise specified in such temporary
global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like in the event that such Person does not take delivery
of such definitive Securities in person at the offices of the Euroclear Operator
or CEDEL S.A. Definitive Securities to be delivered in exchange for any portion
of a temporary global Security shall be delivered only outside the United States
and its possessions.

         Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary global
Security on any Interest Payment Date for Securities of such series occurring
prior to the exchange of such temporary global Security shall be payable to the
Euroclear Operator and CEDEL S.A. on such Interest Payment Date only upon
delivery by the Euroclear Operator and CEDEL S.A. to the Trustee or the
applicable Paying Agent


                                      24
<PAGE>

of a certificate or certificates in the form set forth in Exhibit G.2 to this
Indenture, for credit without further interest accruing thereon on or after such
Interest Payment Date to the respective accounts of the Persons for whom the
Euroclear Operator or CEDEL S.A., as the case may be, holds such temporary
global Security on such Interest Payment Date and who have each delivered to the
Euroclear Operator or CEDEL S.A., as the case may be, a certificate in the form
set forth in Exhibit G.1 to this Indenture. If such Interest Payment Date occurs
on or after the Exchange Date, the Euroclear Operator or CEDEL S.A., as the case
may be, following the receipt of such certificate shall exchange, in accordance
with the procedures hereinabove provided, the portion of the temporary global
Security that relates to such certificate for definitive Securities (which, in
the absence of instructions to the contrary, shall be an interest in a permanent
global Security).

Section 305.      Registration, Registration of Transfer and Exchange.

         The Company shall cause to be kept at an office or agency to be
maintained by the Company in accordance with Section 1002 a register (the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Registered
Securities and the registration of transfers of Registered Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Registered Securities and transfers of Registered Securities as herein provided,
and for facilitating exchanges of (i) temporary global Securities for permanent
global Securities or definitive Securities, or both, (ii) permanent global
Securities for definitive Securities, or both or (iii) Book-Entry Securities for
definitive Securities, or both, as herein provided.

         Upon due surrender for registration of transfer of any Registered
Security of any series at the office or agency of the Company maintained
pursuant to Section 1002 for such purpose in a Place of Payment for such series,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor.

         At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Securities to be exchanged at any such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive. Registered Securities, including Registered
Securities received in exchange for Bearer Securities, may not be exchanged for
Bearer Securities.

         At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons (except as provided below) and with all matured coupons in
default appertaining thereto. If the Holder of a Bearer Security is unable to
produce any such unmatured coupon or coupons or matured coupon or coupons in
default, such exchange may be effected if the Bearer Securities are


                                      25
<PAGE>

accompanied by payment in funds acceptable to the Company in an amount equal to
the face amount of such missing coupon or coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
is furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such
Securities shall surrender to any Paying Agent any such missing coupon in
respect of which such a payment shall have been made or security or indemnity
furnished, such Holder shall be entitled to receive the amount of such payment
or such security and such Holder shall be released from any such indemnity;
provide4 however, that, except as otherwise provided in Section 1002, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States and its
possessions. Notwithstanding the foregoing, in case a Bearer Security of any
series is surrendered at any such office or agency in exchange for a Registered
Security of the same series and like tenor after the close of business at such
office or agency on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.

         Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.

         Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security and any Book-Entry
Security shall be exchangeable pursuant to this Section only as provided in this
paragraph and, in the case of Book-Entry Securities, as provided in the last
paragraph of this Section 305. If the beneficial owners of interests in a
permanent global Security or a Book-Entry Security are entitled to exchange such
interests for Securities of such series and of like tenor and principal amount
of another authorized form and denomination, as specified as contemplated by
Section 301 or by this Section 305, then without unnecessary delay but in any
event not later than the earliest date on which such interests may be so
exchanged, the Company shall deliver to the Trustee or the Security Registrar
definitive Securities of that series in aggregate principal amount equal to the
principal amount of such permanent global Security or Book-Entry Security, as
the case may be, executed by the Company. On or after the earliest date on which
such interests may be so exchanged, in accordance with instructions given by the
Company to the Trustee or the Security Registrar and the Common Depositary or
the U.S. Depository, as the case may be (which instructions shall be in writing
but need not comply with Section 102 or be accompanied by an Opinion of
Counsel), such permanent global Security or Book-Entry Security, as the case may
be, shall be surrendered from time to time by the Common Depositary or the U.S.
Depository, as the case may be, or such other depositary or Common Depositary or
U.S. Depository, as



                                      26
<PAGE>

the case may be, as shall be specified in the Company Order with respect thereto
to the Trustee, as the Company's agent for such purpose, or to the Security
Registrar, to be exchanged, in whole or in part, for definitive Securities of
the same series without charge and the Trustee shall authenticate and deliver in
accordance with such instructions, in exchange for each portion of such
permanent global Security or Book-Entry Security, as the case may be, a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such permanent
global Security or Book-Entry Security, as the case may be, to be exchanged
which unless the Securities of the series are not issuable both as Bearer
Securities and as Registered Securities, in which case the definitive Securities
exchanged for the permanent global Security or the Book-Entry Security shall be
issuable only in the form in which the Securities are issuable, as specified as
contemplated by Section 301, shall be in the form of Bearer Securities or
Registered Securities, or any combination thereof, as shall be specified by the
beneficial owner thereof; provided, however, that no such exchanges may occur
during a period beginning at the opening of business 15 days before any
selection of Securities of that series and of like tenor for redemption and
ending on the relevant Redemption Date; and provided, further, that no Bearer
Security delivered in exchange for a portion of a permanent global Security or a
Book-Entry Security shall be mailed or otherwise delivered to any location in
the United States or its possessions. Promptly following any such exchange in
part, such permanent global Security or Book-Entry Security, as the case may be,
should be returned by the Trustee or the Security Registrar to the Common
Depositary or the U.S. Depository, as the case may be, or such other depositary
or Common Depositary or U.S. Depository referred to above in accordance with the
instructions of the Company referred to above. If a Registered Security is
issued in exchange for any portion of a permanent global Security or Book-Entry
Security after the close of business at the office or agency where such exchange
occurs on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and before the opening of business at such office or agency on the
related proposed date for payment of Defaulted Interest, interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent global Security or Book-Entry Security is payable
in accordance with the provisions of this Indenture.

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

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



                                      27
<PAGE>

         No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.

         In the event of any redemption in part, the Company shall not be
required (i) to issue, register the transfer of or exchange any Security during
a period beginning at the opening of business 15 days before any selection for
redemption of Securities of like tenor and of the series of which such Security
is a part, and ending at the close of business on the earliest date on which the
relevant notice of redemption is deemed to have been given to all Holders of
Securities of like tenor and of such series to be redeemed; (ii) to register the
transfer of or to exchange any Registered Security so selected for redemption,
in whole or in part, except the unredeemed portion of any Security being
redeemed in part; or (iii) to exchange any Bearer Security so selected for
redemption, except that such a Bearer Security may be exchanged for a Registered
Security of that series and of like tenor, provided that such Registered
Security shall be simultaneously surrendered for redemption.

         Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 301, any Book-Entry Security shall be exchangeable
pursuant to this Section 305 or Sections 304, 906 and 1007 for Securities
registered in the name of, and a transfer of a Book-Entry Security of any series
may be registered to, any Person other than the U.S. Depository for such
Security or its nominee only if (i) such U.S. Depository notifies the Company
that it is unwilling or unable to continue as U.S. Depository for such
Book-Entry Security or if at any time such U.S. Depository ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, (ii) the Company executes and delivers to the Trustee a Company Order
that such Book-Entry Security shall be so exchangeable and the transfer thereof
so registerable or (iii) there shall have occurred and be continuing an Event of
Default, or an event which after notice or lapse of time, or both, would become
an Event of Default, with respect to the Securities of such series. Upon the
occurrence in respect of any Book-Entry Security of any series of any one or
more of the conditions specified in clauses (i), (ii) or (iii) of the preceding
sentence or such other conditions as may be specified as contemplated by Section
301 for such series, such Book-Entry Security may be exchanged for Securities
registered in the names of, and the transfer of such Book-Entry Security may be
registered to, such Persons (including Persons other than the U.S. Depository
with respect to such series and its nominees) as such U.S. Depository shall
direct. Notwithstanding any other provisions of this Indenture, any Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any Book-Entry Security shall also be a Book-Entry Security
and shall bear the legend specified in Section 204 except for any Security
authenticated and delivered in exchange for, or upon registration of transfer
of, a Book-Entry Security pursuant to the preceding sentence.

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

         If any mutilated Security or a Security with a mutilated coupon
appertaining thereto is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate


                                      28
<PAGE>

and deliver in exchange therefor a new Security of the same series and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
the surrendered Security.

         If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security or
coupon and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall, subject to the following
paragraph, execute and the Trustee shall authenticate and deliver, in lieu of
any such destroyed, lost or stolen Security or in exchange for the Security to
which a destroyed, lost or stolen coupon appertains (with all appurtenant
coupons not destroyed, lost or stolen), a new Security of the same series and of
like tenor and principal amount and bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
such destroyed, lost or stolen Security or to the Security to which such
destroyed, lost or stolen coupon appertains.

         In case any such mutilated, destroyed, lost or stolen Security or
coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security or coupon;
provided, however, that principal of and any premium and interest on Bearer
Securities shall, except as otherwise provided in Section 1002, be payable only
at an office or agency located outside the United States and its possessions.

         Upon the issuance of any new Security under this Section, the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.

         Every new Security of any series, with any coupons appertaining
thereto, issued pursuant to this Section in lieu of any destroyed, lost or
stolen Security or in exchange for a Security to which a destroyed, lost or
stolen coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
and any coupons appertaining thereto, or the destroyed, lost or stolen coupon
shall be at any time enforceable by anyone, and any such new Security and
coupons, if any, shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series and their
coupons, if any, duly issued hereunder.

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

Section 307.      Payment of Interest; Interest Rights Preserved.

         Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on any Registered Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose


                                      29
<PAGE>

name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.

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

               (1)    The Company may elect to make payment of any Defaulted
         Interest to the Persons in whose names the Registered Securities of
         such series (or their respective Predecessor Securities) are registered
         at the close of business on a Special Record Date for the payment of
         such Defaulted Interest, which shall be fixed in the following manner.
         The Company shall notify the Trustee in writing of the amount of
         Defaulted Interest proposed to be paid on each Registered Security of
         such series and the date of the proposed payment, and at the same time
         the Company shall deposit with the Trustee an amount of money equal to
         the aggregate amount proposed to be paid in respect of such Defaulted
         Interest or shall make arrangements satisfactory to the Trustee for
         such deposit prior to the date of the proposed payment, such money when
         deposited to be held in trust for the benefit of the Persons entitled
         to such Defaulted Interest as in this Clause provided. Thereupon the
         Trustee shall fix a Special Record Date for the payment of such
         Defaulted Interest which shall be not more than 15 days and not less
         than 10 days prior to the date of the proposed payment and not less
         than 10 days after the receipt by the Trustee of the notice of the
         proposed payment. The Trustee shall promptly notify the Company of such
         Special Record Date and, in the name and at the expense of the Company,
         shall cause notice of the proposed payment of such Defaulted Interest
         and the Special Record Date therefor to be mailed, first-class postage
         prepaid, to each Holder of Registered Securities of such series at the
         address of such Holder as it appears in the Security Register, not less
         than 10 days prior to such Special Record Date. Notice of the proposed
         payment of such Defaulted Interest and the Special Record Date therefor
         having been so mailed, such Defaulted Interest shall be paid to the
         Persons in whose names the Registered Securities of such series (or
         their respective Predecessor Securities) are registered at the close of
         business on such Special Record Date and shall no longer be payable
         pursuant to the following Clause (2).

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

         Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu


                                      30
<PAGE>

of any other Security shall carry the rights to interest accrued and unpaid, and
to accrue, which were carried by such other Security.

Section 308.      Persons Deemed Owners.

         Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sections 305 and 307) any
interest on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the contrary.

         Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any coupon
as the owner of such Security or coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such Security or coupon be overdue, and neither the Company, the Trustee nor
any agent of the Company or the Trustee shall be affected by notice to the
contrary.

         Notwithstanding the foregoing, with respect to any temporary or
permanent global Security and any Book-Entry Security, nothing herein shall
prevent the Company, the Trustee, or any agent of the Company or the Trustee,
from giving effect to any written certification, proxy or other authorization
furnished by a Common Depositary or a U.S. Depository, as the case may be, or
impair, as between a Common Depositary or a U.S. Depository and holders of
beneficial interests in any such temporary or permanent global Security or any
Book-Entry Security, as the case may be, the operation of customary practices
governing the exercise of the rights of the Common Depositary or the U.S.
Depository as Holder of such temporary or permanent global Security or any
Book-Entry Security.

Section 309.      Cancellation.

         All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee. All Registered Securities and matured coupons so delivered shall
be promptly cancelled by the Trustee. All Bearer Securities and unmatured
coupons so delivered shall be cancelled by the Trustee. The Company may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this


                                      31
<PAGE>

Indenture. All cancelled Securities and coupons held by the Trustee may be
destroyed unless otherwise directed by a Company Order.

Section 310.      Computation of Interest.

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

Section 311.      Judgments in Respect of Specified Currency.

         If pursuant to Section 301, the provisions of this Section are
established as terms of a series of Securities, the following provisions shall
apply: (a) the obligation, if any, of the Company to pay the principal of and
any premium and interest on Securities in the currency or currency unit
specified pursuant to Section 301 (the "Specified Currency") shall be of the
essence and the Company agrees that, to the extent permitted under applicable
law, judgments in respect of such Securities shall be given in the Specified
Currency; (b) the obligation of the Company to make payments in the Specified
Currency of the principal of and any premium and interest on such Securities
shall, notwithstanding any payment in-any other currency or currency unit
(whether pursuant to a judgment or otherwise), be discharged only to the extent
of the amount in the Specified Currency that the Holder receiving such payment
may, in accordance with normal banking procedures, purchase with the sum paid in
such other currency or currency unit (net of any premium and cost of exchange)
on the Business Day in the country of issue of the Specified Currency or, in the
case of a currency unit, in the international banking community, immediately
following the day on which such Holder receives such payment; (c) if the amount
in the Specified Currency that may be so purchased for any reason falls short of
the amount originally due, the Company shall pay such additional amounts as may
be necessary to compensate for such shortfall; and (d) any obligation of the
Company not discharged by such payment shall be due as a separate and
independent principal, interest or premium payment obligation hereunder, as the
case may be, and, until discharged as provided herein, shall continue in full
force and effect.

                                 ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

Section 401.      Satisfaction and Discharge of Indenture.

         This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for, and any right to receive additional
amounts, as provided in Section 1010), and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

         (1) either


                                      32
<PAGE>

               (A) all Securities theretofore authenticated and delivered and
          all coupons, if any, appertaining thereto (other than (i) coupons
          appertaining to Bearer Securities surrendered in exchange for
          Registered Securities and maturing after such exchange, whose
          surrender is not required or has been waived as provided in Section
          305, (ii) Securities and coupons which have been destroyed, lost or
          stolen and which have been replaced or paid as provided in Section
          306, (iii) coupons appertaining to Securities called for redemption
          and maturing after the relevant Redemption Date, whose surrender has
          been waived as provided in Section 1106, and (iv) Securities and
          coupons for whose payment money has theretofore been deposited in
          trust or segregated and held in trust by the Company and thereafter
          repaid to the Company or discharged from such trust, as provided in
          Section 1003) have been delivered to the Trustee for cancellation; or

               (B) all such Securities and, in the case of (i) or (ii) below,
          any coupons appertaining thereto not theretofore delivered to the
          Trustee for cancellation

               (i) have become due and payable, or

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

               (iii) are to be called for redemption within one year under
          arrangements satisfactory to the Trustee for the giving of notice of
          redemption by the Trustee in the name, and at the expense, of the
          Company;

          and the Company, in the case of (i), (ii) or (iii) above, has
          deposited or caused to be deposited with the Trustee as trust funds in
          trust for the purpose an amount sufficient to pay and discharge the
          entire indebtedness on such Securities and coupons not theretofore
          delivered to the Trustee for cancellation, for principal and any
          premium and interest to the date of such deposit (in the case of
          Securities which have become due and payable) or to the Stated
          Maturity or Redemption Date, as the case may be;

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

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

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



                                      33
<PAGE>

Section 402.  Application of Trust Money.

         Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such money has been deposited with the
Trustee.

                                 ARTICLE FIVE

                                   REMEDIES

Section 501.  Events of Default.

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

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

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

              (3) default in the deposit of any sinking fund payment, when and
          as due by the terms of a Security of that series; or

              (4) default in the performance, or breach, of any covenant or
         warranty of the Company in this Indenture (other than a covenant or
         warranty a default in the performance of which or the breach of which
         is elsewhere in this Section specifically dealt with or which has
         expressly been included in this Indenture solely for the benefit of
         series of Securities other than that series), and continuance of such
         default or breach for a period of 60 days after there has been given,
         by registered or certified mail, to the Company by the Trustee or to
         the Company and the Trustee by the Holders of at least 10% in principal
         amount of the Outstanding Securities of that series, a written notice
         specifying such default or breach and requiring it to be remedied and
         stating that such notice is a "Notice of Default" hereunder; or

              (5) the entry by a court having jurisdiction in the premises of
         (A) a decree or order for relief in respect of the Company in an
         involuntary case or proceeding under any applicable Federal or State
         bankruptcy, insolvency, reorganization or other similar law or (B) a
         decree or order adjudging the Company a bankrupt or insolvent,


                                      34
<PAGE>

         or approving as properly filed a petition seeking reorganization,
         arrangement. adjustment or composition of or in respect of the Company
         under the Federal Bankruptcy Act or any other applicable Federal or
         State law, or appointing a custodian, receiver, liquidator, assignee,
         trustee, sequestrator (or other similar official) of the Company or of
         any substantial part of its property, or ordering the winding up or
         liquidation of its affairs, and the continuance of any such decree or
         order unstayed and in effect for a period of 60 consecutive days; or

               (6)    the institution by the Company of proceedings to be
         adjudicated a bankrupt or insolvent, or the consent by the Company to
         the institution of bankruptcy or insolvency proceedings against it or
         the entry of a decree or order for relief, or the filing by the Company
         of a petition or answer or consent seeking reorganization or relief in
         respect of it or its property under the Federal Bankruptcy Act or any
         other applicable Federal or State law, or the consent by the Company to
         the filing of any such petition or to the appointment of or taking
         possession by a custodian, receiver, liquidator, assignee, trustee,
         sequestrator (or other similar official) of the Company or of any
         substantial part of its properties, or the making by the Company of a
         general assignment for the benefit of creditors, or the admission by
         the Company in writing of its inability to pay its debts generally as
         they become due, or to the knowledge of the Trustee the taking of
         corporate action by the Company in furtherance of any such action; or

               (7)    any other Event of Default provided with respect to
          Securities of that series.

Section 502.      Acceleration of Maturity; Rescission and Annulment.

         If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in
the terms thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.

         At any time after such a declaration of acceleration with respect to
Securities of any series has been made but before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if

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


                                      35
<PAGE>

               (A) all overdue interest on all Securities of that series,

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

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

               (D) all sums paid or advanced by the Trustee hereunder and the
          reasonable compensation, expenses, disbursements and advances of the
          Trustee, its agents and counsel and any other amounts due the Trustee
          under Section 607;

and

          (2)  all Events of Default with respect to Securities of that series,
        other than the non-payment of the principal of Securities of that series
        which have become due solely by such declaration of acceleration, have
        been cured or waived as provided in Section 51 3.

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

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

        The Company covenants that if

          (1)  default is made in the payment of any interest on any
        Security when such interest becomes due and payable and such default
        continues for a period of 30 days, or

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

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and any coupons appertaining thereto, the whole
amount then due and payable on such Securities and coupons for principal and any
premium and interest and, to the extent that payment of such interest shall be
legally enforceable, interest on any overdue principal and on any premium and
overdue interest, at the rate or rates prescribed therefor in such Securities
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 607.


                                      36
<PAGE>

         If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any coupons appertaining thereto by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.

Section 504.      Trustee May File Proofs of Claim.

         In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee1 trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.

         No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder of a
Security or coupon any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or coupons or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security or coupon in any such proceeding.

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

         All rights of action and claims under this Indenture or the Securities
or coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 607, be for the ratable benefit
of the Holders of the Securities and coupons in respect of which such judgment
has been recovered.

Section 506.      Application of Money Collected.

         Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the


                                      37
<PAGE>

Securities or coupons, or both, as the case may be, and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:

                  First:  To the payment of all amounts due the Trustee under
         Section 607; and

                  Second: To the payment of the amounts then due and unpaid for
         principal of and any premium and interest on the Securities and coupons
         in respect of which or for the benefit of which such money has been
         collected, ratably, without preference or priority of any kind,
         according to the amounts due and payable on such Securities and coupons
         for principal and any premium and interest, respectively.

Section 507.      Limitation on Suits.

         No Holder of any Security of any series or any related coupons shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:

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

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

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

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

                  (5) no direction inconsistent with such written request has
          been given to the Trustee during such 60-day period by the Holders of
          a majority in aggregate principal amount of the Outstanding Securities
          of that series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.

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

         Notwithstanding any other provision in this Indenture, the Holder of
any Security or coupon shall have the right, which is absolute and
unconditional, to receive payment of the


                                      38
<PAGE>

principal of and any premium and (subject to Sections 304, 305 and 307) any
interest on such Security or payment of such coupon on the Stated Maturity or
Maturities expressed in such Security or coupon (or, in the case of redemption,
on the Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.

Section 509.      Restoration of Rights and Remedies.

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

Section 510.      Rights and Remedies Cumulative.

         Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities or coupons in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Securities or coupons is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

Section 511.      Delay or Omission Not Waiver.

         No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to the Holders of Securities or coupons may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Securities or coupons, as the case may be.

Section 512.      Control by Holders of Securities.

         The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series, provided that


                                      39
<PAGE>

                  (1) such direction shall not be in conflict with any rule of
         law or with this Indenture and would not in the good faith judgment of
         the Trustee have a substantial likelihood of involving the Trustee in
         personal liability, and

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

Section 513.      Waiver of Past Defaults.

         The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series may on behalf of the Holders of all
the Securities of such series and any coupons appertaining thereto waive any
past default hereunder with respect to the Securities of such series and its
consequences, except a default

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

                  (2) in respect of a covenant or provision hereof which under
         Article Nine cannot be modified or amended without the consent of the
         Holder of each Outstanding Security of such series affected.

         Upon any waiver pursuant to this Section 513, such default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other default or impair any right consequent thereon.

Section 514.      Undertaking for Costs.

         In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that this Section shall have no application to any suit
instituted by the Company.

Section 515.      Waiver of Stay or Extension Laws.

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


                                      40
<PAGE>

                                   ARTICLE SIX

                                   THE TRUSTEE

Section 601.      Certain Duties and Responsibilities.

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

Section 602.      Notice of Defaults.

         The Trustee shall give the Holders notice of any default hereunder as
and to the extent provided by the Trust Indenture Act; provided, however, that
in the case of any default of the character specified in Section 501(4) with
respect to Securities of such series, no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to Securities of
such series.

Section 603.      Certain Rights of Trustee.

         Subject to the provisions of Section 601:

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

         (b)      any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order or as otherwise
expressly provided herein and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;

         (c)      whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;


                                      41
<PAGE>

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

         (e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders of Securities of any series or any related coupons pursuant
to this Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;

         (f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall in good faith
determine to make such further inquiry or investigation, it shall be entitled
upon reasonable notice and at reasonable times during normal business hours to
examine the books, records and premises of the Company, personally or by agent
or attorney; and

         (g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.

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

         The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) and in any coupons shall be taken as
the statements of the Company, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Securities or the
proceeds thereof.

Section 605. May Hold Securities.

         The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and coupons and, subject
to Sections 608 and 613, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paving Agent,
Security Registrar or such other agent.


                                      42
<PAGE>

Section 606.      Money Held in Trust.

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

Section 607.      Compensation and Reimbursement.

         The Company agrees

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

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

                  (3) to indemnify the Trustee and any predecessor Trustee for,
         and to hold it harmless against, any loss, liability or expense
         incurred without negligence or bad faith on its part, arising out of or
         in connection with the acceptance or administration of the trust or
         trusts hereunder, including the costs and expenses of defending itself
         against any claim or liability in connection with the exercise or
         performance of any of its powers or duties hereunder.

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

Section 608.      Disqualification; Conflicting Interests.

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

Section 609.      Corporate Trustee Required; Eligibility.

         There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and



                                      43
<PAGE>

surplus of at least $50,000,000 and having its Corporate Trust Office in the
Borough of Manhattan, The City of New York. 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 Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.

Section 610.      Resignation and Removal; Appointment of Successor.

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

         (b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

         (c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.

         (d) If at any time:

                  (1) The Trustee shall fail to comply with Section 608 after
         written request therefor by the Company or by any Holder of a Security
         who has been a bona fide Holder of a Security for at least six months,
         or

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

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

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder of a Security who has been a bona fide Holder of a Security for a least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to all Securities and the appointment of a successor Trustee or Trustees.


                                      44
<PAGE>

         (e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of Outstanding
Securities of such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 611,
become the successor Trustee with respect to the Securities of such series and
to that extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders of Securities of that series and
accepted appointment in the manner required by Section 611, any Holder of a
Security who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.

         (f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series in the
manner provided in Section 106. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the address
of its Corporate Trust Office.

Section 611.      Acceptance of Appointment by Successor.

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

         (b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,



                                      45
<PAGE>

trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees as co-trustees of
the same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.

         (c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.

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

Section 612.      Merger, Conversion, Consolidation or Succession to Business.

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

Section 613.      Preferential Collection of Claims Against Company.

         If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust


                                       46
<PAGE>

Indenture Act regarding the collection of claims against the Company (or any
such other obligor).

Section 614.      Appointment of Authenticating Agent.

         The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue or upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

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

         An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall promptly give notice of
such appointment to all Holders of Securities pursuant to Section 106. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if


                                      47
<PAGE>

originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.

         The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.

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

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

                   By. _______________________
                            as Trustee


                   By: __________________________________
                            as Authenticating Agent


                   By: ___________________________
                            Authorized Officer


         If all of the Securities of a series may not be originally issued at
one time, and the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing (which writing
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel), shall appoint in accordance with this Section an Authenticating Agent
having an office in a Place of Payment designated by the Company with respect to
such series of Securities, provided that the terms and conditions of such
appointment are acceptable to the Trustee.

                                 ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

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

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

         (a) semi-annually, not later than January 15 and July 15 in each year,
         a list, in such form as the Trustee may reasonably require, containing
         all the information in the possession or control of the Company, or any
         of its Paying Agents other than the Trustee, as to the names and
         addresses of the Holders of Securities as of the preceding January 1 or
         July 1, as the case may be, and



                                      48
<PAGE>

        (b) at such other times as the Trustee may request in writing, within
        30 days after the receipt by the Company of any such request, a list of
        similar form and content as of a date not more than 15 days prior to
        the time such list is furnished;

excluding from any such list names and addresses received by the Trustee if and
so long as it acts as Security Registrar.

Section 702.   Preservation of Information; Communications to Holders.

        (a)    The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Securities (i) contained in
the most recent list furnished to the Trustee as provided in Section 701, (ii)
received by the Trustee if and so long as it acts as Security Registrar and
(iii) filed with it within the two preceding years pursuant to Section 703(b).
The Trustee may (i) destroy any list furnished to it as provided in Section 701
upon receipt of a new list so furnished, (ii) destroy any information received
by it as Paying Agent (if so acting) hereunder upon delivering to itself as
Trustee, not earlier than February 28 or August 30 of each year, a list
containing the names and addresses of the Holders of Securities obtained from
such information since the delivery of the next previous list, if any, (iii)
destroy any list delivered to itself as Trustee which was compiled from
information received by it as Paying Agent (if so acting) hereunder upon the
receipt of a new list so delivered, and (iv) destroy not earlier than two years
after filing, any information filed with it pursuant to Section 703(b).

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

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

Section 703.   Reports by Trustee.

        (a)    The Trustee shall transmit to Holders of Registered Securities
such reports concerning the Trustee and its actions under this Indenture as may
be required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.

        (b)    The Trustee shall transmit such reports, at the time of
transmission to Holders of Registered Securities, to such Holders of Bearer
Securities as have, within the two years preceding such transmission, filed
their names and addresses with the Trustee for that purpose.

        (c)    A copy of each such report shall, at the time of such
transmission to Holders of Securities, be filed by the Trustee with each stock
exchange upon which any Securities of


                                      49
<PAGE>

such series are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.

Section 704.      Reports by Company.

         The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.

                                 ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE


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

         The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, and no Person shall, and the Company shall not
permit any Person to, consolidate with or merge into the Company or convey,
transfer or lease its properties and assets substantially as an entirety to the
Company, unless:

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

                  (2) immediately after giving effect to such transaction and
         treating any indebtedness which becomes an obligation of the Company or
         a Subsidiary as a result of such transaction as having been incurred by
         the Company or such Subsidiary at the time of such transaction, no
         Event of Default, and no event which, after notice or lapse of time, or
         both, would become an Event of Default, shall have happened and be
         continuing;

                  (3) if, as a result of any such consolidation or merger or
          such conveyance, transfer or lease, properties or assets of the
          Company would become subject to a


                                      50
<PAGE>

         mortgage, pledge, lien, security interest or other encumbrance which
         would not be permitted by this Indenture, the Company or such successor
         Person, as the case may be, shall take such steps as shall be necessary
         effectively to secure the Securities equally or ratably with (or prior
         to) all indebtedness secured thereby; and

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

Section 802.      Successor Corporation Substituted.

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

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

Section 901.      Supplemental Indentures Without Consent of Holders.

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

                  (1) to evidence the succession of another Person to the
         Company and the assumption by any such successor of the covenants of
         the Company herein and in the Securities in accordance with Article
         Eight hereof; or

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

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


                                      51
<PAGE>

               (4) to add to or change any of the provisions of this Indenture
          to provide that Bearer Securities may be registrable as to principal,
          to change or eliminate any restrictions on the payment of principal of
          or any premium or interest on Bearer Securities, to permit Bearer
          Securities to be issued in exchange for Registered Securities, to
          permit Bearer Securities to be issued in exchange for Bearer
          Securities of other authorized denominations or to permit or
          facilitate the issuance of Securities in uncertificated form, provided
          that any such action shall not adversely affect the interests of the
          Holders of Securities of any series or any related coupons in any
          material respect; or

               (5) to change or eliminate any of the provisions of this
          Indenture, provided that any such change or elimination shall become
          effective only when there is no Security Outstanding of any series
          created prior to the execution of such supplemental indenture which is
          entitled to the benefit of such provision; or

               (6) to secure the Securities pursuant to the requirements of
          Section 1008 or otherwise; or

               (7) to establish the form or terms of Securities of any series
          and any related coupons as permitted by Sections 201 and 301; or

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

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

Section 902.   Supplemental Indentures with Consent of Holders.

          With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series affected
by such supplemental indenture, by Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of Securities of such series and any related coupons under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby,




                                      52
<PAGE>

               (1) change the Stated Maturity of the principal of, or any
        installment of principal of or interest on, any Security, or reduce the
        principal amount thereof or the rate of interest thereon or any premium
        payable upon the redemption thereof, or change any obligation of the
        Company to pay additional amounts pursuant to Section 1010 (except as
        contemplated by Section 801(1) and permitted by Section 901(1)), or
        reduce the amount of the principal of an Original Issue Discount
        Security that would be due and payable upon a declaration of
        acceleration of the Maturity thereof pursuant to Section 502, or change
        any Place of Payment where, or change the coin or currency in which any
        Security or any premium or interest thereon is payable, or impair the
        right to institute suit for the enforcement of any such payment on or
        after the Stated Maturity thereof (or, in the case of redemption, on or
        after the Redemption Date), or

               (2) reduce the percentage in principal amount of the Outstanding
        Securities of any series, the consent of whose Holders is required for
        any such supplemental indenture, or the consent of whose Holders is
        required for any waiver (of compliance with certain provisions of this
        Indenture or certain defaults hereunder and their consequences) provided
        for in this Indenture, or reduce the requirements of Section 1304 for
        quorum or voting, or

               (3) change any obligation of the Company to maintain an office or
        agency in the places and for the purposes specified in Section 1002,
        or

               (4) modify any of the provisions of this Section, Section 513
        or Section 1007, except to increase any such percentage or to provide
        that certain other provisions of this Indenture cannot be modified or
        waived without the consent of the Holder of each Outstanding Security
        affected thereby; provided, however, that this clause shall not be
        deemed to require the consent of any Holder of a Security or coupon with
        respect to changes in the references to "the Trustee" and concomitant
        changes in this Section and Section 1011 or the deletion of this
        proviso, in accordance with the requirements of Sections 611(b) and
        901(8).

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

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

Section 903.   Execution of Supplemental Indentures.

          In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be



                                      53
<PAGE>

fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.

Section 904.      Effect of Supplemental Indentures.

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

Section 905.      Conformity with Trust Indenture Act.

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

Section 906.      Reference in Securities to Supplemental Indentures.

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

                                  ARTICLE TEN

                                   COVENANTS

Section 1001.     Payment of Principal, Premium and Interest.

        The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities, any coupons appertaining thereto and this Indenture. Unless
otherwise specified as contemplated by Section 301 with respect to any series of
Securities, any interest due on Bearer Securities on or before Maturity shall be
payable only upon presentation and surrender of the respective coupons for such
interest installments.

Section 1002.     Maintenance of Office or Agency.

        If Securities of a series are issuable only as Registered Securities,
the Company will maintain in each Place of Payment for such series an office or
agency where Securities of that series may be presented or surrendered for
payment, where Securities of that series



                                      54
<PAGE>

may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities of that series
and this Indenture may be served. If Securities of a series are issuable as
Bearer Securities, the Company will maintain (A) in the Borough of Manhattan,
The City of New York, an office or agency where any Registered Securities of
that series may be presented or surrendered for payment, where any Registered
Securities of that series may be surrendered for registration of transfer, where
Securities of that series may be surrendered for exchange, where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served and where Bearer Securities of that series and
related coupons may be presented or surrendered for payment in the circumstances
described in the following paragraph (and not otherwise), (B) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
which is located outside the United States and its possessions, an office or
agency where Securities of that series and related coupons may be presented and
surrendered for payment (including payment of any additional amounts payable on
Securities of that series pursuant to Section 1010); provided, however, that if
the Securities of that series are listed on The International Stock Exchange of
the United Kingdom and the Republic of Ireland, Limited, the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and its
possessions and such stock exchange shall so require, the Company will maintain
a Paying Agent for the Securities of that series in London, Luxembourg or any
other required city located outside the United States and its possessions, as
the case may be, so long as the Securities of that series are listed on such
exchange, and (C) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series located outside the United States and its
possessions an office or agency where any Registered Securities of that series
may be surrendered for registration of transfer, where Securities of that series
may be surrendered for exchange and where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served. The Company will give prompt written notice to the Trustee and give
prompt notice to the Holders as provided in Section 106 of the location, and any
change in the location, of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency in respect of any
series of Securities or shall fail to furnish the Trustee with the address
thereof, such presentations and surrenders of Securities of that series may be
made and notices and demands may be made or served at the Corporate Trust Office
of the Trustee, except that Bearer Securities of that series and the related
coupons may be presented and surrendered for payment (including payment of any
additional amounts payable on Bearer Securities of that series pursuant to
Section 1010) at any Paying Agent for such series located outside the United
States and its possessions, and the Company hereby appoints the same as its
agent to receive such respective presentations, surrenders, notices and demands.

         No payment of principal, premium or interest on Bearer Securities shall
be made at any office or agency of the Company in the United States or its
possessions or by check mailed to any address in the United States or its
possessions or by transfer to any account maintained with a financial
institution located in the United States or its possessions; provided, however,
that, if the Securities of a series are denominated and payable in Dollars,
payment of principal of and any premium and interest on any Bearer Security
(including any additional amounts payable on Securities of such series pursuant
to Section 1010) shall be made at the office of the Company's Paying Agent in
the Borough of Manhattan, The


                                      55
<PAGE>

City of New York, if (but only if) payment in Dollars of the full amount of such
principal, premium, interest or additional amounts, as the case may be, at all
offices or agencies outside the United States and its possessions maintained for
the purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.

        The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to the
Trustee and to the Holders in accordance with Section 106 of any such
designation or rescission and of any change in the location of any such other
office or agency.

Section 1003.     Money for Securities Payments to be Held in Trust.

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

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

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

        The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any



                                      56
<PAGE>

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

        Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of and any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal and any premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security or
any coupon appertaining thereto shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper in each Place of Payment, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.

Section 1004.     Statement by Officers as to Default.

        The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the
covenants, agreements or conditions in this Indenture (without regard to any
period of grace or requirement of notice provided hereunder) and if the Company
shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.

Section 1005.     Corporate Existence.

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

Section 1006.     Maintenance of Properties.

        The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the


                                      57
<PAGE>

operation or maintenance of any such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of the business of the
Company as a consolidated entity and not disadvantageous in any material respect
to the Holders.

Section 1007.     Payment of Taxes and Other Claims.

        The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such taxes, assessments, charges or claims which in
the aggregate are of an immaterial amount or whose amount, applicability or
validity is being contested in good faith by appropriate proceedings.

Section 1008.     Limitation on Liens.

        (a) The Company will not, and will not permit any Restricted
Subsidiary- to, create, assume, incur or suffer to be created, assumed or
incurred or to exist any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind (other than purchase options, rights of first refusal
and other arrangements pursuant to which capital stock or property may be sold)
(collectively, `tens") upon any Principal Property of any Restricted Subsidiary
or upon any capital stock of Universal Leaf, whether owned on the date hereof or
hereafter acquired, without making effective, concurrent provision whereby all
Outstanding Securities shall be directly secured, equally and ratably with the
indebtedness or other claims or obligations (the "Indebtedness") secured by one
or more Liens; provided, however, that the foregoing restrictions shall not
apply to:

                  (1) Liens existing on the date hereof securing Indebtedness
        outstanding on the date hereof;

                  (2) Liens securing Indebtedness owing by any Restricted
        Subsidiary to another Restricted Subsidiary;

                  (3) liens existing on any asset or shares of capital stock of
        any corporation at the time such corporation becomes a subsidiary of
        any Restricted Subsidiary or is merged into or consolidated with any
        Restricted Subsidiary;

                  (4) liens on any asset securing Indebtedness incurred or
        assumed or guaranteed for the purpose of financing all or any part of
        the cost of acquiring, constructing, improving or repairing such asset
        (including, without limitation, Liens incurred in connection with
        pollution control bonds, industrial revenue bonds or similar
        financings), provided that such liens attach to such asset
        concurrently with or within 120 days after completion of the
        acquisition, construction, improvement or repair thereof (or in the
        case of real property, completion of such improvement or construction
        or commencement of full operation of such property, whichever is
        later);


                                      58
<PAGE>

               (5) Liens existing on any asset prior to the acquisition thereof
          by any Restricted Subsidiary;

               (6) Liens on any assets in favor of the United States or any
          other country (or any department, agency, instrumentality or political
          subdivision thereof) and created to secure any payments pursuant to
          any contract or statute, provided that payment thereof is not at the
          time required by Section 1007;

               (7) Liens arising pursuant to any statute or order of attachment,
          distraint or similar legal process arising in connection with court
          proceedings so long as the execution or other enforcement thereof is
          effectively stayed and the claims secured thereby are being contested
          in good faith by appropriate proceedings;

               (8) liens securing taxes, assessments or governmental charges or
          levies not yet delinquent or being contested in good faith by
          appropriate proceedings;

               (9) liens securing obligations owing to landlords, mechanics,
          materialmen, suppliers, carriers and other like Persons incurred in
          the ordinary course of business for sums not yet due or being
          contested in good faith by appropriate proceedings; and

               (10) Liens arising out of the refinancing, extension, renewal or
          refunding of any Indebtedness secured by any lien permitted by any of
          the foregoing clauses of this Section 1008, provided that such
          Indebtedness is not increased and is not secured by any additional
          assets.

          (b) Notwithstanding the foregoing provisions of this Section 1008,
Liens on Principal Property of the Restricted Subsidiaries in an aggregate
amount (including the value of any sale and leaseback transaction permitted by
clause (1) of Section 1009 by virtue of Section 1008(b), but excluding the value
of (i) sale and leaseback transactions otherwise permitted by Section 1009 and
(ii) Liens permitted by clauses (1) through (10) of Section 1008(a)) not at the
time exceeding 10% of Consolidated Net Tangible Assets are not subject to the
foregoing restrictions.

Section 1009.     Limitation on Sale and Leaseback Transactions.

          The Company will not, and will not permit any Restricted Subsidiary
to, enter into any arrangement, directly or indirectly, with any Person whereby
such Restricted Subsidiary shall sell or transfer any Principal Property of such
Restricted Subsidiary, whether now owned or hereafter acquired, more than 120
days after the completion of construction and commencement of full operation
thereof, and then or thereafter rent or lease as lessee for a term of more than
three years such property or any part thereof or any other property which such
Restricted Subsidiary intends to use for substantially the same purpose or
purposes as the Principal Property being sold or transferred, unless (1) a Lien
would be permitted (without securing all Outstanding Securities), under Section
1008 on such Principal Property in an amount equal to the value of such sale and
leaseback transaction,



                                      59
<PAGE>

(2) the sale and leaseback transaction is between such Restricted Subsidiary and
the Company or another Subsidiary, or (3) within 180 days of such sale and
leaseback transaction, the Company or such Restricted Subsidiary applies an
amount equal to the greater of (a) the fair value of such property as determined
in good faith by the Boards of Directors of Universal Leaf and of the Company,
declared by Board Resolution, or (b) the proceeds from the sale of such
property, to (x) the purchase or acquisition (or, in the case of real property,
the construction) of assets by any Restricted Subsidiary or (y) to the voluntary
retirement of Funded Debt of the Company or any Restricted Subsidiary (which may
include the Securities), other than Funded Debt that is subordinated in right of
payment to the Securities. The value of any sale and leaseback transaction for
purposes of clause (1) of the preceding sentence and for purposes of Section
1008 shall be an amount equal to the greater of ~"e amounts specified in clauses
(3)(a) and (3)(b) of the preceding sentence, in either case first divided by the
number of years in the original lease term and then multiplied by the number of
years of such term remaining at the time of determination.

Section 1010.     Additional Amounts.

        If the Securities of a series provide for the payment of additional
amounts, the Company will pay to the Holder of any Security of such series or
any coupon appertaining thereto additional amounts as provided therein. Whenever
in this Indenture there is mentioned, in any context, the payment of the
principal of or any premium or interest on, or in respect of, any Security of
any series or payment of any related coupon or the net proceeds received on the
sale or exchange of any Security of any series, such mention shall be deemed to
include mention of the payment of additional amounts provided for in this
Section to the extent that, in such context, additional amounts are, were or
would be payable in respect thereof pursuant to the provisions of this Section
and express mention of the payment of additional amounts (if applicable) in any
provisions hereof shall not be construed as excluding additional amounts in
those provisions hereof where such express mention is not made.

        If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company will furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
coupons who are. United States Aliens without withholding for or on account of
any tax, assessment or other governmental charge described in the Securities of
that series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Securities or coupons and the Company will
pay to the Trustee or such Paying Agent the additional amounts required by this
Section. The Company covenants to indemnify the



                                      60
<PAGE>

Trustee and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense reasonably incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by any
of them in reliance on any Officers' Certificate furnished pursuant to this
Section.

Section 1011.     Waiver of Certain Covenants.

        The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1005 to 1010, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in aggregate principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.

                                ARTICLE ELEVEN

                           REDEMPTION OF SECURITIES

Section 1101.     Applicability of Article.

        Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.

Section 1102.     Election to Redeem; Notice to Trustee.

        The election of the Company to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution. In the case of any redemption at the
election of the Company of less than all the Securities of any series, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date, of the principal amount of Securities of
such series to be redeemed and, if applicable, of the tenor of the Securities to
be redeemed. In the case of any redemption of Securities (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (ii) pursuant to an election of
the Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or condition.

Section 1103.     Selection by Trustee of Securities to be Redeemed.

        If less than all the Securities of any series are to be redeemed
(unless all of the Securities of a specified tenor are to be redeemed), the
particular Securities to be redeemed



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<PAGE>

shall be selected not more than 45 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series not previously called
for redemption, by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series or any integral
multiple thereof) of the principal amount of Registered Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of that series or of the principal amount of global Securities of
such series. If less than all of the Securities of such series and of a
specified tenor are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 45 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence. If
so specified in the Securities of a series, partial redemptions must be in an
amount not less than $1,000,000 principal amount of Securities.

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

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

Section 1104.     Notice of Redemption.

        Notice of redemption shall be given in the manner provided in Section
106 to the Holders of Securities to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date.

        All notices of redemption shall state:

                  (1)      the Redemption Date,

                  (2)      the Redemption Price,

                  (3)      if less than all the Outstanding Securities of any
         series are to be redeemed, the identification (and, in the case of
         partial redemption of any Securities, the principal amounts) of the
         particular Securities to be redeemed,

                  (4)      that on the Redemption Date the Redemption Price will
         become due and payable upon each such Security to be redeemed and, if
         applicable, that interest thereon will cease to accrue on and after
         said date,

                  (5)      the place or places which must include the applicable
         Place or Places of Payment where such Securities, together in the case
         of Bearer Securities with all coupons appertaining thereto, if any,
         maturing after the Redemption Date, are to be surrendered for payment
         of the Redemption Price, and



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<PAGE>

                  (6) that the redemption is for a sinking fund, if such is the
         case.

A notice of redemption to Holders of Bearer Securities published as contemplated
by Section 106 need not identify particular Registered Securities to be
redeemed.

         Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.

Section 1105.     Deposit of Redemption Price.

        Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.

Section 1106.     Securities Payable on Redemption Date.

        Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States and its
possessions (except as otherwise provided in Section 1002) and, unless otherwise
specified as contemplated by Section 301, only upon presentation and surrender
of coupons for such interest; and provided, further, that, unless otherwise
specified as contemplated by Section 301, installments of interest on Registered
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.

        If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing


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coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest represented by coupons shall be payable only at
an office or agency located outside the United States and its possessions
(except as otherwise provided in Section 1002) and, unless otherwise specified
as contemplated by Section 301, only upon presentation and surrender of those
coupons.

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

Section 1107.     Securities Redeemed in Part.

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

                                 ARTICLE TWELVE

                                  SINKING FUNDS

Section 1201.     Applicability of Article.

        The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.

        The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.



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<PAGE>

Section 1202.  Satisfaction of Sinking Fund Payments with Securities.

        The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption), together in the case of any Bearer
securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Securities of a series which have been redeemed either
at the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments pursuant to
the terms of such Securities, in each case in satisfaction of all or any part of
any sinking fund payment with respect to the Securities of such series required
to be made pursuant to the terms of such Securities as provided for by the terms
of such series; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.

Section 1203.     Redemption of Securities for Sinking Fund.

        Not less than 75 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202, the basis for such credit and that such Securities
have not been previously so credited, and will also deliver to the Trustee any
Securities to be so delivered. Not less than 45 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1106 and 1107.

                                ARTICLE THIRTEEN

                        MEETINGS OF HOLDERS OF SECURITIES

Section 1301.     Purposes for Which Meetings May be Called.

        A meeting of Holders of Securities of any or all series may be called
at any time and from time to time pursuant to this Article to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.

Section 1302.     Call, Notice and Place of Meetings.

        (a) The Trustee may at any time call a meeting of Holders of Securities
of any series for any purpose specified in Section 1301, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, or in
London as the Trustee shall



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<PAGE>

determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days prior to the
date fixed for the meeting (or, in the case of a meeting of Holders with respect
to Securities of a series all or part of which are represented by a Book-Entry
Security, not less than 20 nor more than 40 days).

        (b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 10% in aggregate principal amount of the Outstanding
Securities of any series shall have requested the Trustee to call a meeting of
the Holders of Securities of such series for any purpose specified in Section
1301, by written request setting forth in reasonable detail the action proposed
to be taken at the meeting, and the Trustee shall not have made the first
publication of the notice of such meeting within 21 days after receipt of such
request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series in
the amount above specified, as the case may be, may determine the time and the
place in the Borough of Manhattan, The City of New York or in London for such
meeting and may call such meeting for such purposes by giving notice thereof as
provided in subsection (a) of this Section.

Section 1303.     Persons Entitled to Vote at Meetings.

        Upon the calling of a meeting of Holders with respect to the Securities
of a series all or part of which are represented by a Book-Entry Security, a
record date shall be established for determining Holders of Outstanding
Securities of such series entitled to vote at such meeting, which record date
shall be the close of business on the day the notice of the meeting of Holders
is given in accordance with Section 1302. The Holders on such record date, and
their designated proxies, and only such Persons, shall be entitled to vote at
such meeting of Holders.

        To be entitled to vote at any meeting of Holders a Person shall (a) be
a Holder of one or more Securities or (b) be a Person appointed by an instrument
in writing as proxy by a Holder of one or more Securities; provided, however,
that in the case of any meeting of Holders with respect to the Securities of a
series all or part of which are represented by a Book-Entry Security, only
Holders, or their designated proxies, of record on the record date established
pursuant to this Section 1303 shall be entitled to vote at such meeting. The
only Persons who shall be entitled to be present or to speak at any meeting of
Holders shall be the Persons entitled to vote at such meeting and their counsel
and any representatives of the Trustee and its counsel and any representatives
of the Company and its counsel.

Section 1304.     Quorum; Action.

        The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent, waiver, request, demand,
notice, authorization, direction or other action which


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<PAGE>

may be given by the Holders of not less than a specified percentage in principal
amount of the Outstanding Securities of a series, the Persons holding or
representing such specified percentage in principal amount of the Outstanding
Securities of such series will constitute a quorum. In the absence of a quorum
within one hour of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities of such series, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 1302(a), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series which shall
constitute a quorum. Notwithstanding the foregoing, no meeting of Holders with
respect to Securities of any series which is represented in whole or in part by
a Book-Entry Security, shall be adjourned to a date more than 90 days after the
record date for such meeting unless the Trustee shall send out a new notice of
meeting and establish, in accordance with Section 1303, a new record date for
Holders entitled to vote at such meeting.

        Except as limited by the proviso to the first paragraph of Section 902,
any resolution presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted by the affirmative vote of
the Holders of a majority in principal amount of the Outstanding Securities of
that series; provided, however, that, except as limited by the proviso to the
first paragraph of Section 902, any resolution with respect to any consent,
waiver, request, demand, notice, authorization, direction or other action which
this Indenture expressly provides may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid only by the affirmative vote of the
Holders of a not less than such specified percentage in principal amount of the
Outstanding Securities of that series.

        Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.

Section 1305.    Determination of Voting Rights; Conduct and Adjournment of
                 Meetings.

        (a) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem



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appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 104
and the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such regulations may
provide that written instruments appointing proxies, regular on their face, may
be presumed valid and genuine without the proof specified in Section 104 or
other proof.

         (b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1302(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.

         (c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.

         (d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1302 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.

Section 1306.     Counting Votes and Recording Action of Meetings.

        The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1302 and, if
applicable, Section 1304. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the



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Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.

                                ARTICLE FOURTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

Section 1401.     Company's Option to Effect Defeasance or Covenant Defeasance.

        Unless otherwise provided pursuant to Section 301, the Company may at
its option by Board Resolution, at any time, with respect to the Securities of
any series, elect to have either Section 1402 or Section 1403 be applied to the
Outstanding Securities of such series upon compliance with the conditions set
forth below in this Article Fourteen.

Section 1402.     Defeasance and Discharge.

        Upon the Company's exercise of the above option applicable to this
Section and subject to Section 1405, the Company shall be deemed to have been
discharged from its obligations with respect to the Outstanding Securities of
such series on and after the date the conditions precedent set forth below are
satisfied but subject to satisfaction of the conditions subsequent set forth
below (hereinafter, "defeasance"). For this purpose, such defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Securities of such series and to have satisfied
all its other obligations under such Securities and this Indenture insofar as
such Securities are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of Outstanding Securities of such series to
receive, solely from the trust fund described in Section 1404 and as more fully
set forth in such Section, payments of the principal of and any premium and
interest on such Securities when such payments are due, (B) the Company's
obligations with respect to such Securities under Sections 304, 305, 306, 1002
and 1003 and such obligations as shall be ancillary thereto, (C) the rights,
powers, trusts, duties, immunities and other provisions in respect of the
Trustee hereunder and (D) this Article Fourteen. Subject to compliance with this
Article Fourteen, the Company may exercise its option under this Section 1402
notwithstanding the prior exercise of its option under Section 1403 with respect
to the Securities of such series. Following a defeasance, payment of the
Securities of such series may not be accelerated because of an Event of Default.

Section 1403.     Covenant Defeasance.

        Upon the Company's exercise of the above option applicable to this
Section, the Company shall be released from its obligations under Sections 1005
to 1009, inclusive, (and any other Sections applicable to such Securities that
are determined pursuant to Section 301 to be subject to this provision) with
respect to the Outstanding Securities of such series on and after the date the
conditions precedent set forth below are satisfied but




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<PAGE>

subject to satisfaction of the conditions subsequent set forth below
(hereinafter, "covenant defeasance"). For this purpose, such covenant defeasance
means that, with respect to the Outstanding Securities of such series, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such Section, whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or by
reason of any reference in any such Section to any other provision herein or in
any other document, but the remainder of this Indenture and such Securities
shall be unaffected thereby. Following a covenant defeasance, payment of the
Securities of such series may not be accelerated because of an Event of Default
solely by reference to such Sections specified above in this Section 1403.

Section 1404.     Conditions to Defeasance or Covenant Defeasance.

        The following shall be the conditions precedent or, as specifically
noted below, subsequent to application of either Section 1402 or Section 1403 to
the Outstanding Securities of such series:

                  (1) The Company shall irrevocably have deposited or caused to
        be deposited with the Trustee as trust funds in trust for the purpose of
        making the following payments, specifically pledged as security for, and
        dedicated solely to, the benefit of the Holders of such Securities, (A)
        money in an amount, or (B) U.S. Government Obligations which through the
        scheduled payment of principal and interest in respect thereof in
        accordance with their terms will provide, not later than one day before
        the due date of any payment, money in an amount, or (C) a combination
        thereof, sufficient, without reinvestment, in the opinion of a
        nationally recognized firm of independent public accountants expressed
        in a written certification thereof delivered to the Trustee, to pay and
        discharge, and which shall be applied by the Trustee to pay and
        discharge, (i) the principal of and any premium and interest on the
        Outstanding Securities of such series to Maturity or redemption, as the
        case may be, and (ii) any mandatory sinking fund payments or analogous
        payments applicable to the Outstanding Securities of such series on the
        due dates thereof. Before such a deposit the Company may make
        arrangements satisfactory to the Trustee for the redemption of
        Securities at a future date or dates in accordance with Article Eleven
        which shall be given effect in applying the foregoing. For this purpose,
        "U.S. Government Obligations" means securities that are (x) direct
        obligations of the United States of America for the payment of which its
        full faith and credit is pledged or (y) obligations of a Person
        controlled or supervised by and acting as an agency or instrumentality
        of the United States of America the payment of which is unconditionally
        guaranteed as a full faith and credit obligation by the United States of
        America, which, in either case, are not callable or redeemable at the
        option of the issuer thereof, and shall also include a depository
        receipt issued by a bank (as defined in Section 3(a)(2) of the
        Securities Act of 1933, as amended) as custodian with respect to any
        such U.S. Government Obligation or a specific payment of principal of or
        interest on any such U.S. Government Obligation held by such custodian
        for the account of the holder of such depository receipt, provided that
        (except as required by law) such custodian is not authorized to make any
        deduction from the amount payable to the holder of such depository
        receipt from any amount


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<PAGE>

received by the custodian in respect of the U.S. Government Obligation or the
specific payment of principal of or interest on the U.S. Government Obligation
evidenced by such depository receipt.

     (2) No Event of Default, or event which after notice or lapse of time, or
both, would become an Event of Default with respect to the Securities of such
series, shall have happened and be continuing (A) on the date of such deposit or
(B) insofar as subsections 50 1(5) and (6) hereof are concerned, at any time
during the period ending on the 123rd day after the date of such deposit or, if
longer, ending on the day following the expiration of the longest preference
period applicable to the Company in respect of such deposit (it being understood
that the condition in this clause (B) is a condition subsequent and shall not be
deemed satisfied until the expiration of such period).

     (3) Such defeasance or covenant defeasance shall not (A) cause the Trustee
for the Securities of such series to have a conflicting interest as defined in
Section 608 or for purposes of the Trust Indenture Act with respect to any
securities of the Company or (B) result in the trust arising from such deposit
to constitute, unless it is qualified as, a regulated investment company under
the Investment Company -Act of 1940, as amended.

     (4) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it is bound.

     (5) Such defeasance or covenant defeasance shall not cause any Securities
of such series then listed on any registered national securities exchange under
the Securities Exchange Act of 1934, as amended, to be delisted.

     (6) In the case of an election under Section 1402, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (x) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling, or (y) since the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of the Outstanding
Securities of such series will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred.

     (7) In the case of an election under Section 1403, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the Holders of
the Outstanding Securities of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such covenant defeasance
had not occurred.



                                      71
<PAGE>

                  (8) Such defeasance or covenant defeasance shall be effected
        in compliance with any additional terms, conditions or limitations
        which may be imposed on the Company in connection therewith pursuant to
         Section 301.

                  (9) The Company shall have delivered to the Trustee an
        Officers' Certificate and an Opinion of Counsel, each stating that all
        conditions precedent and subsequent provided for in this Indenture
        relating to either the defeasance under Section 1402 or the covenant
        defeasance under Section 1403, as the case may be, have been complied
        with.

Section 1405.     Deposited Money and U.S. Government Obligations to be Held in
                  Trust; Other Miscellaneous Provisions.

        Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligation (including the proceeds thereof) deposited
with the Trustee pursuant to Section 1404 in respect of the Outstanding
Securities of such series shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (but not including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Securities, of all sums due and to become due thereon in respect
of principal and any premium and interest, but such money need not be segregated
from other funds except to the extent required by law.

        The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 1404 or the principal and interest
received in respect thereof.

        Anything herein to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or U.S. Government Obligations held by it as provided in Section 1404 which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance, provided that the
Trustee shall not be required to liquidate any U.S. Government Obligations in
order to comply with the provisions of this paragraph.

        Anything herein to the contrary notwithstanding, if and to the extent
the deposited money or U.S. Government Obligations (or the proceeds thereof)
either (i) cannot be applied by the Trustee in accordance with this Section
because of a court order or (ii) are for any reason insufficient in amount, then
(x) the Company's obligations to pay principal of and any premium and interest
on the Securities of such series shall be reinstated to the extent necessary to
cover the deficiency on any due date for payment and (y) in the case of a
covenant defeasance under Section 1403, the Company's obligations under Sections
1005 to 1009, inclusive, (and any other Sections applicable to such Securities
that are determined pursuant to Section 301 to be subject to this provision)
shall be reinstated unless and until all deficiencies on any due date for
payment are covered. In any case


                                      72
<PAGE>

specified in clause (i), the Company's interest in the deposited money and U.S.
Government Obligations (and proceeds thereof) shall be reinstated to the extent
the Company's payment obligations are reinstated.




                                      73
<PAGE>

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

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

                                        UNIVERSAL CORPORATION


                                        By:    /s/ O. KEMP DOZIER
                                            --------------------------
                                            Name:  O. Kemp Dozier
                                            Title:  Vice President and Treasurer

(Seal)

Attest:


   /s/ J. M. WHITE
- ---------------------------
       Secretary


                                        CHEMICAL BANK


                                        By:     /s/    M. K. CONNER
                                             ------------------------------
                                             Name:  M. K. Conner
                                             Title:   Trust Officer

(Seal)

Attest:


   /s/  P. MORABITO
- ---------------------------
   [Assistant] Secretary



                                      74
<PAGE>

State of Virginia
County of Richmond                      ss.:

         On the 12th day of February 1991, before me personally came O. Kemp
Dozier to me known, who, being by me duly sworn, did depose and say that he is a
Treasure and Vice President of Universal Corporation, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.

(Notarial Seal)                  /s/  JOETTA J. ANTHONY
                                 ----------------------
                                      Notary Public

State of New York
County of New York                      ss.:

         On the 13th day of February, 1991, before me personally came M. K.
Conner to me known, who, being by me duly sworn, did depose and say that she is
a Trust Officer of Chemical Bank, one of the corporations described in and which
executed the foregoing instrument; that she knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the By-laws of said corporation, and that she signed her
name thereto by like authority.

(Notarial Seal)                /s/  FRANK S. FECZKO
                               --------------------


                                      75
<PAGE>

                                    EXHIBIT A

                  [FORM OF REGISTERED SECURITY WHICH IS NOT AN
                        ORIGINAL ISSUE DISCOUNT SECURITY]

                                 [Form of Face]

                              UNIVERSAL CORPORATION

No. [R-]                                               [U.S.]                $

         Universal Corporation, a Virginia corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to_____ ,or
registered assigns, the principal sum of   [United States] Dollars on and to pay
interest thereon from    , 19 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, or, if the date of this
Security is an Interest Payment Date to which interest has been paid or duly
provided for, then from the date hereof, [semi-annually in arrears on    and
  in each year] [annually in arrears on in each year,] commencing    , 20__,
and at Maturity at the rate of % per annum, until the principal hereof is paid
or duly made available for payment [If applicable, insert-- and (to the extent
that the payment of such interest shall be legally enforceable) at the rate of %
per annum on any overdue principal [and premium] and on any overdue installment
of interest]. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the     [or ] (whether or not a Business Day) [, as the
case may be,] next preceding such Interest Payment Date. [Except as otherwise
provided in the Indenture,] any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and may be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a Special
Record Date to be fixed by the Trustee for the payment of such Defaulted
Interest, notice whereof shall be given to the Holder of this Security not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner [not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange], all as more fully
provided in such Indenture. Payment of the principal of [(and premium, if any)]
and interest on this Security will be made at [the office or agency of the
Company maintained for that purpose in , in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts] [the option of the Holder (a) at [the Corporate Trust
Office of the Trustee] or such other office or agency of the Company as may be
designated by it for such 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 shall be legal tender for the payment of public and private debts or (b)
subject to any laws or regulations applicable thereto and to the right of the
Company (limited as provided in
<PAGE>

the Indenture) to rescind the designation of any such Paying Agent, at the
[main] offices of _________in ___________in _____________, in   ,    in and in ,
or at such other offices or agencies as the Company may designate, by [United
States dollar] check drawn on, or transfer to a [United States dollar] account
maintained by the payee with, a bank in The City of New York (so long as the
applicable Paying Agent has received timely and proper transfer instructions in
writing)] [If applicable, insert--; provided, however, that payment of interest
may be made at the option of the Company by [United States dollar] check mailed
to the addresses of the Persons entitled thereto as such addresses shall appear
in the Security Register] [or by transfer to a [United States dollar] account
maintained by the payee with, a bank in The City of New York (so long as the
applicable Paying Agent has received timely and proper transfer instructions in
writing)].

         [If Securities of the series are to be offered to United States Aliens,
insert--]The Company will pay to the Holder of this Security who is a United
States Alien (as defined below) such additional amounts as may be necessary in
order that every net payment of the principal of [(and premium, if any)] and
interest on this Security, after deduction or withholding for or on account of
any present or future tax, assessment or other governmental charge imposed by
the United States (as defined below) or any political subdivision or taxing
authority thereof or therein upon or as a result of such payment, will not be
less than the amount provided for in this Security to be then due and payable;
provided, however, that the Company shall not be required to make any payment of
additional amounts for or on account of:

               (a) any tax, assessment or other governmental charge which would
          not have been imposed but for (i) the existence of any present or
          former connection between such Holder (or between a fiduciary,
          settlor, beneficiary, member or shareholder of, or possessor of a
          power over, such Holder, if such Holder is an estate, trust,
          partnership or corporation) and the United States, including, without
          limitation, such Holder (or such fiduciary, settlor, beneficiary,
          member, shareholder or possessor) being or having been a citizen or
          resident thereof or being or having been present or engaged in trade
          or business therein or having or having had a permanent establishment
          therein or (ii) the presentation by the Holder of such Security for
          payment on a date more than 10 days after the date on which such
          payment became due and payable or the date on which payment thereof is
          duly provided for, whichever occurs later;

               (b) any estate, inheritance, gift, sales, transfer, personal
          property tax or similar tax, assessment or other governmental charge;

               (c) any tax, assessment or other governmental charge imposed by
          reason of such Holder's past or present status as a personal holding
          company or foreign personal holding company with respect to the United
          States or as a corporation which accumulates earnings to avoid United
          States federal income tax;


                                      A-2
<PAGE>

               (d) any tax, assessment or other governmental charge which is
          payable otherwise than by withholding from payments of principal of
          [(and premium, if any)] or interest on, such Security;

               (e) any tax, assessment or other governmental charge required to
          be withheld by any Paying Agent from any payment of principal of [(and
          premium, if any)] or interest on, the Securities, if such payment can
          be made without such withholding by any of the other Paying Agents in
          Western Europe;

               (f) any tax, assessment or other governmental charge which would
          not have been imposed but for the failure to comply with
          certification, information, documentation or other reporting
          requirements concerning the nationality, residence, identity or
          connections with the United States of the Holder or beneficial owner
          of such Security, if such compliance is required by statute or by
          regulation of the United States Treasury Department as a pre-condition
          to relief or exemption from such tax, assessment or other governmental
          charge;

               (g) any tax, assessment or other governmental charge imposed on
          interest received by (i) a 10% shareholder (as defined in Section
          871(h)(3)(B) of the United States Internal Revenue Code of 1986, as
          amended, and the regulations that may be promulgated thereunder) of
          the Company or (ii) a controlled foreign corporation within the
          meaning of the United States Internal Revenue Code of 1986, as
          amended; or

               (h) any combination of items (a), (b), (c), (d), (e), (f) and
          (g);

nor will additional amounts be paid with respect to any payment of principal of
[(and premium, if any)] or interest on this Security to any Holder which is a
United States Alien who is a fiduciary or partnership or other than the sole
beneficial owner of any such payment to the extent that a beneficiary or settlor
with respect to such fiduciary, a member of such a partnership or the beneficial
owner would not have been entitled to the additional amounts had such
beneficiary, settlor, member or beneficial owner been the Holder of this
Security. Except as specifically provided in the Securities of this series, the
Company shall not be required to make any payment with respect to any tax,
assessment or governmental charge imposed by any government or any political
subdivision thereof or taxing authority therein. Whenever in this Security there
is mentioned, in any context, the payment of the principal of [(or premium, if
any)] or interest on, or in respect of, a Security, such mention shall be deemed
to include mention of the payment of additional amounts provided for herein to
the extent that, in such context, additional amounts are, were or would be
payable in respect thereof pursuant to the provisions hereof and express mention
of the payment of additional amounts (if applicable) in any provisions hereof
shall not be construed as excluding additional amounts in those provisions
hereof where such express mention is not made. The term "United States Alien"
means any Person who, for United States federal income tax purposes, is a
foreign corporation, a non-resident alien individual, a non-resident alien
fiduciary of a foreign estate or trust or a foreign partnership to the extent
that one


                                      A-3
<PAGE>

or more of its members is, for United States federal income tax purposes, a
foreign corporation, a non-resident alien individual or a non-resident alien
fiduciary of a foreign estate or trust, and the term "United States" means the
United States of America (including the States and the District of Columbia).

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. This Security is one of the
Securities originally sold under the Company's Prospectus dated 19 , as
supplemented by a Prospectus Supplement dated_______, 19_______.

         Unless the certificate of authentication hereon has been executed by or
on behalf of Chemical Bank, the Trustee under the Indenture, or its successor
thereunder, by the manual signature of one of its authorized officers, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
- -executed under its corporate seal.

Dated: ________________________________

                                                 UNIVERSAL CORPORATION
[Seal]   By: ___________________________
                                                     Name:
                                                     Title:

Attest:


___________________________
___________________________
        Secretary

                                [Form of Reverse]

         This Security is one of a duly authorized issue of Securities (herein
called the "Securities") of the Company, unlimited in aggregate principal
amount, issued and to be issued in one or more series under an indenture dated
as of _________, 1991 between the Company and Chemical Bank, Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture (as hereinafter defined)), to which indenture and all indentures
supplemental thereto (the indenture, as supplemented, being herein called the
"Indenture") reference is hereby made for a statement of the respective rights
thereunder of the Company, the Trustee and the Holders of the Securities [If the
Securities of the series are issuable as Bearer


                                      A-4
<PAGE>

Securities, insert--and any coupons appertaining thereto] and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [, limited in
aggregate principal amount to [U.S.]$ ]. [If the Securities of the series are
issuable as Bearer Securities, insert--The Securities of this series are
issuable as Bearer Securities [,with interest coupons attached,] in the
denomination of U.S.$   , and as Registered Securities, without coupons, in
denominations of U.S.$    and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Bearer
Securities and Registered Securities of this series are exchangeable for a like
aggregate principal amount of Registered Securities of this series and of like
tenor of any authorized denominations, as requested by the Holder surrendering
the same, upon surrender of the Security or Securities to be exchanged at any
office or agency described below where Registered Securities of this series may
be presented for registration of transfer. Registered Securities, including
Registered Securities received in exchange for Bearer Securities, may not be
exchanged for Bearer Securities.]

         [If applicable, insert--The Securities of this series are subject to
redemption [(1)] -[If applicable, insert--on __________ in any year ____________
commencing with the year and ending with the year through operation of the
sinking fund for this series at a Redemption Price equal to 100% of the
principal amount [and (2)]] [If applicable, insert--at any time [on or after ,
____________19 ], as a whole or in part, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal amount):
if redeemed [on or before , %, and if redeemed] during the 12-month period
beginning of the years indicated,

                         REDEMPTION                        REDEMPTION
         YEAR               PRICE           YEAR             PRICE
         ----          ---------------      ----           ----------







and thereafter at a Redemption Price equal to  % of the principal amount,]  [If
applicable, insert--[and ( )] under the circumstances described in the next
[two] succeeding paragraph[s] at a Redemption Price equal to 100% of the
principal amount,] together in the case of any such redemption [If applicable,
insert--(whether through operation of the sinking fund or otherwise)] with
accrued interest to the Redemption Date; provided, however, that installments of
interest on this Security whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holder of this Security, or one or more
Predecessor Securities, of record at the close of business on the relevant
Regular Record Dates referred to on the face hereof, all as provided in the
Indenture.]

         [If applicable, insert--The Securities of this series are subject to
redemption (1) on in any year commencing with the year and ending with the year
through


                                      A-5
<PAGE>

operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [on or
after   , 19 ], as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below: if redeemed during the 12-month period beginning of the years indicated,

                REDEMPTION PRICE              REDEMPTION PRICE FOR
                FOR REDEMPTION                RECEMPTION OTHERWISE
                THROUGH OPERATION             THAN THROUGH OPERATION
YEAR            OF THE SINKING FUND           OF THE SINKING FUND
- ----            -------------------           -------------------



and thereafter at a Redemption Price equal to % of the principal amount [If
applicable, insert--and (3) under the circumstances described in the next [two]
succeeding paragraph[s] at a Redemption Price equal to 100% of the principal
amount,] together in the case of any such redemption (whether through operation
of the sinking fund or otherwise) with accrued interest to the Redemption Date;
provided, however, that installments of interest on this Security whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holder of
this security, or one or more Predecessor Securities, of record at the close of
business on the relevant Regular Record Dates referred to on the face hereof,
all as provided in the Indenture.] [Notwithstanding the foregoing, the Company
may not, prior to _____________, redeem any Securities of this series as
contemplated by Clause [(2)] above ____________ as a part of, or in anticipation
of, any refunding operation by the application, directly or indirectly, of
moneys borrowed having an interest cost to the Company (calculated in accordance
with generally accepted financial practice) of less than % per annum.]

         [If Securities of the series are to be offered to United States Aliens,
insert--The Securities of this series may be redeemed, as a whole but not in
part, at the option of the Company, at a Redemption Price equal to 100% of their
principal amount, together with interest accrued to the date fixed for
redemption, if, as a result of any amendment to, or change in, the laws (or any
regulations or rulings promulgated thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting taxation,
or any amendment to or change in an official position regarding the application
or interpretation of such laws, regulations or rulings, which amendment or
change is effective on or after , 19, the Company will become obligated to pay
additional amounts (as described on the face hereof) on the next succeeding
Interest Payment Date, provided that such obligation to pay additional amounts
cannot be avoided by the use of reasonable measures available to the Company;
provided, however, that in the



                                      A-6
<PAGE>

opinion of the Company, which opinion shall be rendered in good faith, such
measures need not be used if they have or will have a material adverse impact on
the conduct of its business; provided further, however, that (a) no notice of
such redemption may be given earlier than 90 days prior to the earliest date on
which the Company would be obligated to pay such additional amounts were a
payment in respect of the Securities of this series then due, and (b) at the
time notice of such redemption is given, such obligation to pay such additional
amounts remains in effect. Immediately prior to the giving of any notice of
redemption pursuant to this paragraph, the Company shall deliver to the Trustee
a certificate stating that the Company is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent to the
right of the Company so to redeem have occurred and an opinion of McGuire,
Woods, Battle & Boothe to such effect based on such statement of facts.]

         [If the Securities of the series are issuable as Bearer Securities and
if applicable*, insert--In addition, if the Company determines that any payment
made outside the United States and its possessions by the Company or any of its
Paying Agents of the full amount of principal [,premium, if any,] or interest
due with respect to any Bearer Security or coupon would, under any present or
future laws or regulations of the United States affecting taxation or otherwise,
be subject to any certification, information, documentation or other reporting
requirement of any kind, the effect of which requirement is the disclosure to
the Company, any Paying Agent or any governmental authority of the nationality,
residence or identity of a beneficial owner of such Bearer Security or coupon
who is a United States Alien (as defined on the face hereof) (other than such a
requirement (a) which would not be applicable to a payment made by the Company
or any one of its Paying Agents (i) directly to the beneficial owner or (ii) to
any custodian, nominee or other agent of the beneficial owner, or (b) which can
be satisfied by the custodian, nominee or other agent certifying that the
beneficial owner is a United States Alien, provided in each case referred to in
clauses (a)(ii) and (b) that payment by such custodian, nominee or other agent
of such beneficial owner is not otherwise subject to any such requirement or (c)
would not be applicable to a payment made to any other Paying Agent in Western
Europe), the Company at its election will either (x) redeem the Securities of
this series, as a whole but not in part, at a Redemption Price equal to 100% of
their principal amount, together with interest accrued to the date fixed for
redemption, or (y) if and so long as any such certification, information,
documentation or other reporting requirement would be fully satisfied by payment
of a backup withholding tax or similar charge, pay to the Holders of Bearer
Securities who are United States Aliens certain additional amounts specified in
the Bearer Securities of this series. The Company will make such determination
and election and notify the Trustee thereof as soon as practicable, and the
Trustee will promptly give notice of such determination in the manner provided
below (the "Determination Notice"), in each case stating the effective date of
such certification, information, documentation or other reporting requirement,
whether the Company will redeem the


- -------------------
*   Generally this provision will only be applicable if the Securities of the
series bear interest at a fixed rate.

                                      A-7
<PAGE>

Securities or will pay to the Holders of Bearer Securities who are United States
Aliens the additional amounts specified in the Bearer Securities of this series
and (if applicable) the last date by which the redemption of the Securities must
take place. If the Company elects to redeem the Securities, such redemption
shall take place on such date, not later than one year after publication of the
Determination Notice, as the Company elects by notice to the Trustee at least 75
days before such date, unless shorter notice is acceptable to the Trustee. Upon
receipt of notice from the Company as to the date of redemption, the Trustee
shall cause notice thereof to be duly given in the manner provided below.
Notwithstanding the foregoing, the Company will not so redeem the Securities if
the Company subsequently determines, not less than 30 days prior to the date
fixed for redemption, that subsequent payments on Securities would not be
subject to any such requirement, in which case the Company will promptly notify
the Trustee, which will promptly give notice of that determination in the manner
provided below, and any earlier redemption notice will thereupon be revoked and
of no further effect. If the Company elects as provided in clause (y) above to
pay such additional amounts to the Holders of Bearer Securities who are United
States Aliens, and as long as the Company is obligated to pay such additional
amounts to such Holders, the Company may subsequently redeem the Securities, at
any time, as a whole but not in part, at a Redemption Price equal to 100% of
their principal amount, together with interest accrued to the date fixed for
redemption, including any additional amounts required to be paid but without
reduction for applicable United States of America withholding taxes.]

         [The sinking fund for this series provides for the redemption on
________ in each year, beginning with the year and ending with the year , of
[not less than] [U.S.] $ [("mandatory sinking fund") and not more than [U.S.] $
] aggregate principal amount of Securities of this series. [Securities of this
series acquired or redeemed by the Company otherwise than through [mandatory]
sinking fund payments may be credited against subsequent [mandatory] sinking
fund payments otherwise required to be made [in the inverse order in which they
become due].]

         Notice of redemption will be given by mail to Holders of [If Securities
of the series are issuable as Bearer Securities, insert--Registered] Securities,
not less than 30 nor more than 60 days prior to the date fixed for redemption,
all as provided in the Indenture.

         [In the event of redemption of this Security in part only, a new [If
Securities of the series are issuable as Bearer Securities, insert--Registered]
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.]

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


                                     A-8
<PAGE>

         [[Except as otherwise provided herein,] the Securities of this series
are not subject to any sinking fund and are not subject to redemption at the
option of the Company prior to maturity.]

         The provisions of Article Fourteen of the Indenture [do not] apply to
Securities of this series.

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

         As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not less
than 25% in principal amount of the Outstanding Securities of this series shall
have made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the Holders of a majority in principal amount of the Outstanding Securities
of this series a direction inconsistent with such request and shall have failed
to institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of [(and premium, if any)] or interest
on this Security on or after the respective due dates expressed herein.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of [(and premium, if any)]
and interest [(including additional amounts, as described on the face hereof)]
on this Security at the time, place and rate, and in the coin or currency,
herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security may be registered on the Security
Register of the Company,

                                      A-9
<PAGE>

upon surrender of this Security for registration of transfer at the office or
agency of the Company in [any place where the principal of [(and premium, if
any)] and interest on this Security are payable] [the Borough of Manhattan, the
City of New York, or, subject to any laws or regulations applicable thereto and
to the right of the Company (limited as provided in the Indenture) to rescind
the designation of any such transfer agent, at the [main] offices of          in
         and       in_____________or at such other offices or agencies as the
Company may designate], 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 [If the Securities of the series are issuable as
Bearer Securities, insert--Registered] Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

         [If the Securities of the series are not issuable as Bearer Securities,
insert--The Securities of this series are issuable only in registered form
without coupons in denominations of $ _________________ and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Securities of this series are exchangeable
for a like aggregate principal amount of Securities of this series and of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.]

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

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

         The Securities of this series shall be dated the date of their
authentication.

         [If the Securities of the Series are issuable as Bearer Securities,
insert--The Indenture, the Securities and any coupons appertaining thereto shall
be governed by and construed in accordance with the laws of the State of New
York.]

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

                                     A-10
<PAGE>

                                    EXHIBIT B

                    [FORM OF REGISTERED SECURITY WHICH IS AN
                        ORIGINAL ISSUE DISCOUNT SECURITY]

                                 [Form of Face]
         [Insert any legend required by the Internal Revenue Code and the
                           Regulations thereunder.]

                              UNIVERSAL CORPORATION

No. [R-]                                  [U.S.] $


         Universal Corporation, a Virginia corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
                                                                  or registered
    assigns,      the       principal     sum     of
[United States]  Dollars on                            [If the Security is
interest-bearing, insert--, and to pay interest thereon from         , 19 or
from the most recent Interest Payment Date to which interest has been
paid or duly provided for, or, if the date of this Security is an Interest
Payment Date to which interest has been paid or duly provided for, then from the
date hereof, [semi-annually in arrears on          and          in each year]
[annually in arrears on in each year,] commencing          , 19__, and  at
Maturity at the rate of ______________% per annum, until the principal hereof is
paid or duly made available for payment [If applicable, insert--, and (to the
extent that the payment of such interest shall be legally enforceable) at the
rate of % per annum on any overdue principal [and premium] and on any overdue
installment of interest]. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the        [or    ] (whether or not a Business
Day) [, as the case may be,] next preceding such Interest Payment Date. [Except
as otherwise provided in the Indenture,] any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date and may be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date to be fixed by the Trustee for the payment of
such Defaulted Interest, notice whereof shall be given to the Holder of this
Security not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner [not inconsistent with the requirements
of any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange], all as more fully
provided in such Indenture]. [If the Security is not to bear interest prior to
Maturity, insert--The principal of this Security shall not bear interest except
in the case of a default in payment of principal upon acceleration, upon
redemption or at Stated Maturity, and in such case the overdue principal of this
Security shall bear interest at the rate of % per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the
<PAGE>

date payment of such principal has been made or duly provided for. Interest on
any overdue principal shall be payable on demand. Any interest on any overdue
principal shall bear interest at the rate of % per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such interest has
been made or duly provided for, and such interest shall also be payable on
demand.] Payment of the principal of [(and premium, if any)] and [If applicable,
insert--any such] interest on this Security will be made at [the office or
agency of the Company maintained for that purpose in , in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts] [the option of the Holder (a) at [the
Corporate Trust Office of the Trustee] or such other office or agency of the
Company as may be designated by it for such 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 shall be legal tender for the payment of public and
private debts or (b) subject to any laws or regulations applicable thereto and
to the right of the Company (limited as provided in the Indenture) to rescind
the designation of any such Paying Agent, at the [main] offices of in         ,
   in    ,     in     ,     in and in    , or at such other offices or agencies
as the Company may designate, by [United -States dollar] check drawn on, or
transfer to a [United States dollar] account maintained by the payee with, a
bank in The City of New York (so long as the applicable Paying Agent has
received timely and proper transfer instructions in writing)] [If applicable,
insert--; provided, however, that payment of interest may be made at the option
of the Company by [United States dollar] check mailed to the addresses of the
Persons entitled thereto as such addresses shall appear in the Security
Register] [or by transfer to a [United States dollar] account maintained by the
payee with, a bank in The City of New York (so long as the applicable Paying
Agent has received timely and proper transfer instructions in writing)].

         [If Securities of the series are to be offered to United States Aliens,
insert--The Company will pay to the Holder of this Security who is a United
States Alien (as defined below) such additional amounts as may be necessary in
order that [If the Security is interest-bearing, insert--every net payment of
the principal of [(and premium, if any)] and interest on this Security] [If the
Security is not to bear interest prior to Maturity, insert--(i) the net payment
of principal of (and interest on overdue principal, if any, on) this Security
and (ii) the net proceeds from the sale or exchange of this Security to the
extent of the issue price plus accrued but unpaid original issue discount],
after deduction or withholding for or on account of any present or future tax,
assessment or other governmental charge imposed by the United States (as defined
below) or any political subdivision or taxing authority thereof or therein upon
or as a result of such payment, [If the Security is not to bear interest prior
to Maturity, insert--or, as a result of such sale or exchange] will not be less
than the amount provided for in this Security to be then due and payable [If the
Security is not to bear interest prior to Maturity, insert--or, in the case of a
sale or exchange, the amount of the net proceeds from the sale or exchange
before any such tax, assessment or other governmental charge]; provided,
however, that the Company shall not be required to make any payment of
additional amounts for or on account of:

                                      B-2
<PAGE>

     (a) any tax, assessment or other governmental charge which would not have
been imposed but for (i) the existence of any present or former connection
between such Holder (or between a fiduciary, settlor, beneficiary, member or
shareholder of, or possessor of a power over, such Holder, if such Holder is an
estate, trust, partnership or corporation) and the United States, including,
without limitation, such Holder (or such fiduciary, settlor, beneficiary,
member, shareholder or possessor) being or having been a citizen or resident
thereof or being or having been present or engaged in trade or business therein
or having or having had a permanent establishment therein or (ii) the
presentation by the Holder of such Security for payment on a date more than 10
days after the date on which such payment became due and payable or the date on
which payment thereof is duly provided for, whichever occurs later;

     (b) any estate, inheritance, gift, sales, transfer, personal property tax
or similar tax, assessment or other governmental charge;

     (c) any tax, assessment or other governmental charge imposed by reason of
such Holder's past or present status as a personal holding company or foreign
personal holding company with respect to the United States or as a corporation
which accumulates earnings to avoid United States federal income tax;

     (d) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments of [If the Security is
interest-bearing, insert--principal of [(and premium, if any)] or interest on,
such Security] [If the Security is not to bear interest prior to Maturity,
insert--principal of [(and premium, if any)] or interest on overdue principal,
if any, on) such Security or from payments from the proceeds of a sale or
exchange of such Security];

     (e) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of principal of [(and premium, if
any)] or interest on, the Securities, if such payment can be made without such
withholding by any of the other Paying Agents in Western Europe;

     (f) any tax, assessment or other governmental charge which would not have
been imposed but for the failure to comply with certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connections with the United States of the Holder or
beneficial owner of such Security, if such compliance is required by statute or
by regulation of the United States Treasury Department as a pre-condition to
relief or exemption from such tax, assessment or other governmental charge;

     (g) any tax, assessment or other governmental charge imposed [If the
Security is interest-bearing, insert--on interest received by (i) a 10%
shareholder (as defined in Section 871(h)(3)(B) of the United States Internal
Revenue Code

                                      B-3
<PAGE>

         of 1986, as amended, and the regulations that may be promulgated
         thereunder) of the Company or (ii) a controlled foreign corporation
         within the meaning of the United States Internal Revenue Code of 1986,
         as amended] [If the Security is not to bear interest prior to Maturity,
         insert--(i) by reason of such Holder's past or present status as a 10%
         shareholder (as defined in Section 871(h)(3)(B) of the United States
         Internal Revenue Code of 1986, as amended, and the regulations that may
         be promulgated thereunder) of the Company or (ii) by reason of such
         Holder's past or present status as a controlled foreign corporation
         within the meaning of the United States Internal Revenue Code of 1986,
         as amended]; or

             (h) any combination of items (a), (b), (c), (d), (e), (f) and (g);

nor will additional amounts be paid with respect to any payment of [If the
Security is interest-bearing, insert--principal of [(and premium, if any)] or
interest on this Security] [If the Security is not to bear interest prior to
Maturity, insert--principal of (or interest on overdue principal, if any, on)
this Security or of the proceeds of any sale or exchange of this Security] to
any Holder which is a United States Alien who is a fiduciary or partnership or
other than the sole beneficial owner of any such payment to the extent that a
beneficiary or settlor with respect to such fiduciary, a member of such a
partnership or the beneficial owner would not have been entitled to the
additional amounts had such beneficiary, settlor, member or beneficial owner
been the Holder of this Security. Except as specifically provided in the
Securities of this series, the Company shall not be required to make any payment
with respect to any tax, assessment or governmental charge imposed by any
government or any political subdivision thereof or taxing authority therein.
Whenever in this Security there is mentioned, in any context, the payment of the
principal of [(or premium, if any)] or interest on, or in respect of, a
Security, such mention shall be deemed to include mention of the payment of
additional amounts provided for herein to the extent that, in such context,
additional amounts are, were or would be payable in respect thereof pursuant to
the provisions hereof and express mention of the payment of additional amounts
(if applicable) in any provisions hereof shall not be construed as excluding
additional amounts in those provisions hereof where such express mention is not
made. The term "United States Alien" means any Person who, for United States
federal income tax purposes, is a foreign corporation, a non-resident alien
individual, a non-resident alien fiduciary of a foreign estate or trust or a
foreign partnership to the extent that one or more of its members is, for United
States federal income tax purposes, a foreign corporation, a non-resident alien
individual or a non-resident alien fiduciary of a foreign estate or trust, and
the term "United States" means the United States of America (including the
States and the District of Columbia).

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. This Security is one of the
Securities originally sold under the Company's Prospectus dated        , 19 , as
supplemented by a Prospectus Supplement dated          , 19  .

                                      B-4
<PAGE>

         Unless the certificate of authentication hereon has been executed by or
on behalf of Chemical Bank, the Trustee under the Indenture, or its successor
thereunder, by the manual signature of one of its authorized officers, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:
       -----------------------------
                                                   UNIVERSAL CORPORATION
[Seal]   By:
             ----------------------------             Name:
                                                      Title:

Attest:


- -------------------------------
          Secretary



                                [Form of Reverse]

         This Security is one of a duly authorized issue of Securities (herein
called the "Securities") of the Company, unlimited in aggregate principal
amount, issued and to be issued in one or more series under an indenture dated
as of ___________, 1991, between the Company and Chemical Bank, Trustee (herein
called the `Trustee", which term includes any successor trustee under the
Indenture (as hereinafter defined)), to which indenture and all indentures
supplemental thereto (the indenture, as supplemented, being herein called the
"Indenture") reference is hereby made for a statement of the respective rights
thereunder of the Company, the Trustee and the Holders of the Securities [If the
Securities of the series are issuable as Bearer Securities, insert--and any
coupons appertaining thereto) and of the terms upon which the Securities are,
and are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [, limited in aggregate principal amount to
[U.S.]$     ]. [If Securities of the series are issuable as Bearer Securities,
insert--The Securities of this series are issuable as Bearer Securities [, with
interest coupons attached,] in the denomination of U.S.$       and as Registered
Securities, without coupons, in denominations of U.S.$        and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Bearer Securities and Registered Securities of
this series are exchangeable for a like aggregate principal amount of Registered
Securities of this series and of like tenor of any authorized denominations, as
requested by the Holder surrendering the same, upon surrender of the Security or
Securities to be exchanged at

                                      B-5
<PAGE>

any office or agency described below where Registered Securities of this series
may be presented for registration of transfer. Registered Securities, including
Registered Securities received in exchange for Bearer Securities, may not be
exchanged for Bearer Securities.]

         [If applicable, insert--The Securities of this series are subject to
redemption [(1)] [If applicable, insert--on in any year commencing with the year
      and ending with the year     through operation of the sinking fund for
this series at a Redemption Price equal to [Insert formula for determining the
amount] [and (2)]] [If applicable, insert--at any time [on or after     , 19  ]
, as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount): if
redeemed [on or before      ,    %, and if redeemed] during the 12-month period
beginning       of the years indicated,

                      Redemption                        Redemption
           Year          Price           Year              Price
           ----          -----           ----              -----







and thereafter at a Redemption Price equal to % of the principal amount,] [If
applicable, insert--[and ( )] under the circumstances described in the next
[two] succeeding paragraph[s] at a Redemption Price equal to [Insert formula for
determining the amount)] [If the Security is interest-bearing, insert--,
together in the case of any such redemption [If applicable, insert--(whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date; provided, however, that installments of interest on this
Security whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holder of this Security, or one or more Predecessor Securities,
of record at the close of business on the relevant Regular Record Dates referred
to on the face hereof, all as              provided in the Indenture].

         [If applicable, insert--The Securities of this series are subject to
redemption (1) on      in any year commencing with the year     and ending with
the year through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [on or after , 19 ], as a whole or in part, at the election of the
Company, at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below: if redeemed during the 12-month period beginning
of the years indicated,


                                      B-6

<PAGE>

              Redemption Price              Redemption Price
              for Redemption                for Redemption Otherwise
              Through operation             Than Through Operation
Year          of the Sinking Fund           of the Sinking Fund
- ----          -------------------           ------------------------






and thereafter at a Redemption Price equal to % of the principal amount [If
applicable, insert--and (3) under the circumstances described in the next [two]
succeeding paragraph[s] at a Redemption Price equal to [Insert formula for
determining the amount)] [If the Security is interest-bearing, insert--,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date;
provided, however, that installments of interest on this Security whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holder of
this Security, or one or more Predecessor Securities, of record at the close of
business on the relevant Regular Record Dates referred to on the face hereof,
all as provided in the Indenture].] [Notwithstanding the foregoing, the Company
may not, prior to      , redeem any Securities of this series as contemplated by
Clause [(2)] above as a part of, or in anticipation of, any refunding operation
by the application, directly or indirectly, of moneys borrowed having an
interest cost to the Company (calculated in accordance with generally accepted
financial practice) of less than   % per annum.]

         [If Securities of the series are to be offered to United States Aliens,
insert--The Securities of this series may be redeemed, as a whole but not in
part, at the option of the Company, at a Redemption Price determined as set
forth in the preceding paragraph [If the Security is interest-bearing, insert--,
together with interest accrued to the date fixed for redemption,] if, as a
result of any amendment to, or change in, the laws (or any regulations or
rulings promulgated thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation, or any
amendment to or change in an official position regarding the application or
interpretation of such laws, regulations or rulings, which amendment or change
is effective on or after         ,19  , the Company will become obligated to pay
additional amounts (as described on the face hereof) [If the Security is
interest-bearing, insert--on the next succeeding Interest Payment Date] [If the
Security is not to bear interest prior to Maturity, insert--at Maturity or upon
the sale or exchange of any Security], provided that such obligation to pay
additional amounts cannot be avoided by the use of reasonable measures available
to the Company; provided, however, that in the opinion of the Company, which
opinion shall be rendered in good faith, such measures need not be used if they
have or will have a material adverse impact on the conduct of its business;
provided further, however, that (a) no notice of such redemption may be given
earlier than 90 days prior


                                      B-7
<PAGE>

to the earliest date on which the Company would be obligated to pay such
additional amounts [If the Security is interest-bearing, insert--were a payment
in respect of the Securities of this series then due] [If the Security is not to
bear interest prior to Maturity, insert--were payment in respect of the
Securities of this series then due or a sale or exchange of a Security of this
series then made], and (b) at the time notice of such redemption is given, such
obligation to pay such additional amounts remains in effect. Immediately prior
to the giving of any notice of redemption pursuant to this paragraph, the
Company shall deliver to the Trustee a certificate stating that the Company is
entitled to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Company so to redeem
have occurred and an opinion of McGuire, Woods, Battle & Boothe to such effect
based on such statement of facts.]

         [If the Securities of the series are issuable as Bearer Securities and
if applicable*, insert--In addition, if the Company determines that any payment
made outside the United States and its possessions by the Company or any of its
Paying Agents of the full amount of principal [, premium, if any,] or interest
due with respect to. any Bearer Security or coupon would, under any present or
future laws or regulations of the United States affecting taxation or otherwise,
be subject to any certification, information, documentation or other reporting
requirement of any kind, the effect of which requirement is the disclosure to
the Company, any Paying Agent or any governmental authority of the nationality,
residence or identity of a beneficial owner of such Bearer Security or coupon
who is a United States Alien (as defined on the face hereof) (other than such a
requirement (a) which would not be applicable to a payment made by the Company
or any one of its Paying Agents (i) directly to the beneficial owner or (ii) to
any custodian, nominee or other agent of the beneficial owner, or (b) which can
be satisfied by the custodian, nominee or other agent certifying that the
beneficial owner is a United States Alien, provided in each case referred to in
clauses (a)(ii) and (b) that payment by such custodian, nominee or other agent
of such beneficial owner is not otherwise subject to any such requirement or (c)
would not be applicable to a payment made to any other Paying Agent in Western
Europe), the Company at its election will either (x) redeem the Securities of
this series, as a whole but not in part, at a Redemption Price determined as set
forth in the next preceding paragraph, together with interest accrued to the
date fixed for redemption, or (y) if and so long as any such certification,
information, documentation or other reporting requirement would be fully
satisfied by payment of a backup withholding tax or similar charge, pay to the
Holders of Bearer Securities who are United States Aliens certain additional
amounts specified in the Bearer Securities of this series. The Company will make
such determination and election and notify the Trustee thereof as soon as
practicable, and the Trustee will promptly give notice of such determination in
the manner provided below (the "Determination Notice"), in each case stating the
effective date of such certification, information, documentation or other
reporting requirement,


- -------------------
*    This provision will only be applicable if the Securities of the series are
     interest bearing and generally only if the Securities bear interest at a
     fixed rate.

                                      B-8
<PAGE>

whether the Company will redeem the Securities or will pay to the Holders of
Bearer Securities who are United States Aliens the additional amounts specified
in the Bearer Securities of this series and (if applicable) the last date by
which the redemption of the Securities must take place. If the Company elects to
redeem the Securities, such redemption shall take place on such date, not later
than one year after publication of the Determination Notice, as the Company
elects by notice to the Trustee at least 75 days before such date, unless
shorter notice is acceptable to the Trustee. Upon receipt of notice from the
Company as to the date of redemption, the Trustee shall cause notice thereof to
be duly given in the manner provided below. Notwithstanding the foregoing, the
Company will not so redeem the Securities if the Company subsequently
determines, not less than 30 days prior to the date fixed for redemption, that
subsequent payments on the Securities would not be subject to any such
requirement, in which case the Company will promptly notify the Trustee, which
will promptly give notice of that determination in the manner provided below,
and any earlier redemption notice will thereupon be revoked and of no further
effect. If the Company elects as provided in clause (y) above to pay such
additional amounts to the Holders of Bearer Securities who are United States
Aliens, and as long as the Company is obligated to pay such additional amounts
to such Holders, the Company may subsequently redeem the Securities, at any
time, as a whole but not in part, at a Redemption Price determined as set forth
in the next preceding paragraph, together with interest accrued to the date
fixed for redemption including any additional amounts required to be paid but
without reduction for applicable United States of America withholding taxes.]

         [If the Securities of the series are issuable as Bearer Securities and
if applicable*, insert--In addition, if the Company determines that any payment
made outside the United States and its possessions by the Company or any of its
Paying Agents of the full amount due with respect to any Bearer Security would,
under any present or future laws or regulations of the United States affecting
taxation or otherwise, be subject to any certification, information,
documentation or other reporting requirement of any kind, the effect of which
requirement is the disclosure to the Company, any Paying Agent or any
governmental authority of the nationality, residence or identity of a beneficial
owner of such Bearer Security who is a United States Alien (as defined on the
face hereof) (other than such a requirement (a) which would not be applicable to
a payment made by the Company or any one of its Paying Agents (i) directly to
the beneficial owner or (ii) to any custodian, nominee or other agent of the
beneficial owner, or (b) which can be satisfied by the custodian, nominee or
other agent certifying that such beneficial owner is a United States Alien,
provided in each case referred to in clauses (a)(ii) and (b) that payment by
such custodian, nominee or other agent of such beneficial owner is not otherwise
subject to any such requirement or (c) would not be applicable to a payment made
to any other Paying Agent in Western Europe), the Company at its election will
either (x) permit any Holder of a Security to present such Security for
redemption within 90 days of notice of such redemption, at a Redemption Price
determined as set forth in



- --------------------
*    This provision will only be applicable if the Securities of the series are
     not to bear interest prior to Maturity.

                                      B-9
<PAGE>

the next preceding paragraph, provided that if any such Holder fails to present
its Security for redemption, such Holder will not be entitled to any additional
amounts, or (y) if and so long as the conditions of the second paragraph on the
face of this Security are satisfied, pay the additional amounts specified in
such paragraph. The Company will make such determination and election and notify
the Trustee thereof as soon as practicable, and the Trustee will promptly give
notice of such determination in the manner provided below (the "Determination
Notice"), in each case stating the effective date of such certification,
information, documentation or other reporting requirement, whether the Company
has elected to permit redemption of the Securities or to pay the additional
amounts specified in such paragraph and (if applicable) the last day by which
the Company may give any notice of redemption. If the Company elects to permit
redemption of the Securities, notice of the redemption will be given not more
than 268 days following the Determination Notice and will specify the date fixed
for redemption. The Securities will be redeemed on the day 97 days after notice
of the redemption has been given. Notwithstanding the foregoing, the Company
will not permit redemption of the Securities if the Company subsequently
determines, not less than 30 days prior to the date fixed for redemption, that
subsequent payments would not be subject to any such -requirement, in which case
the Company will promptly notify the Trustee, which will promptly give notice of
that determination in the manner described below, and any earlier redemption
notice will thereupon be revoked and of no further effect.]

         [The sinking fund for this series provides for the redemption on in
each year, beginning with the year and ending with the year of [not less than]
[U.S.] $ [("mandatory sinking fund") and not more than [U.S.] $ ] aggregate
principal amount of Securities of this series. [Securities of this series
acquired or redeemed by the Company otherwise than through [mandatory] sinking
fund payments may be credited against subsequent [mandatory] sinking fund
payments otherwise required to be made [in the inverse order in which they
become due].]

         Notice of redemption will be given by mail to Holders of [If the
Securities of the series are issuable as Bearer Securities, insert--Registered]
Securities, not less than 30 nor more than 60 days prior to the date fixed for
redemption, all as provided in the Indenture.

         [In the event of redemption of this Security in part only, a new [If
the Securities of the series are issuable as Bearer Securities,
insert--Registered] Security or Securities of this series and of like tenor for
the unredeemed portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.]

         If an Event of Default with respect to Securities of this series shall
occur and be continuing, an amount of principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture. Such amount shall be equal to [--insert formula for determining
the amount.] Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal and overdue interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the


                                     B-10
<PAGE>

payment of the principal of and [any] interest on the Securities of this series
shall terminate.

         [[Except as otherwise provided herein,] the Securities of this series
are not subject to any sinking fund and are not subject to redemption at the
option of the Company prior to maturity.]

         The provisions of Article Fourteen of the Indenture [do not] apply to
Securities of this series.

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

         As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not less
than 25% in principal amount of the Outstanding Securities of this series shall
have made written request, and offered reasonable indemnity to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the Holders of a majority in principal amount of the Outstanding Securities
of this series a direction inconsistent with such request and shall have failed
to institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of [(and premium, if any)] or [any]
interest on this Security on or after the respective due dates expressed herein.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of [(and premium, if any)]
and [any] interest [(including additional amounts, as described on the face
hereof)] on this Security at the time, place and rate, and in the coin or
currency, herein prescribed.

                                     B-11
<PAGE>

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security may be registered on the Security
Register of the Company, upon surrender of this Security for registration of
transfer at the office or agency of the Company in [any place where the
principal of [(and premium, if any)] and [any] interest of this Security are
payable] [the Borough of Manhattan, The City of New York, or, subject to any
laws or regulations applicable thereto and to the right of the Company (limited
as provided in the Indenture) to rescind the designation of any such transfer
agent, at the [main] offices of        in and        in or at such other offices
or agencies as the Company may designate], 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 [If the Securities of the
series are issuable as Bearer Securities, insert--Registered] Securities of this
series and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

         [If the Securities of the series are not issuable as Bearer Securities,
insert--The Securities of this series are issuable only in registered form
without coupons, in denominations of $ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.]

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

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

         The Securities of this series shall be dated the date of their
authentication.

         [If the Securities of the series are issuable as Bearer Securities,
insert--The Indenture, the Securities and any coupons appertaining thereto shall
be governed by and construed in accordance with the laws of the State of New
York.]

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

                                     B-12
<PAGE>

                                    EXHIBIT C

                    [FORM OF BEARER SECURITY WHICH IS NOT AN
                      ORIGINAL ISSUE DISCOUNT SECURITY AND
                             FORM OF RELATED COUPON]

                           [Form of Face of Security]

         ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

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


                              UNIVERSAL CORPORATION

No. B-                                                     U.S. $

         Universal Corporation, a Virginia corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to bearer
upon presentation and surrender of this Security the principal sum of Thousand
United States Dollars on and to pay interest thereon, from the date hereof,
[semi-annually in arrears on and in each year] [annually in arrears on in each
year,] commencing , 19 , and at Maturity at the rate of % per annum, until the
principal hereof is paid or duly made available for payment [If applicable,
insert--, and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of % per annum on any overdue principal and premium and
on any overdue installment of interest]. Such payments [(including premium, if
any)] shall be made, subject to any laws or regulations applicable thereto and
to the right of the Company (limited as provided in the Indenture) to rescind
the designation of any such Paying Agent, at the [main] offices of in , in , in
, in and in , or at such other offices or agencies outside the United States of
America (including the States and the District of Columbia) and its possessions
(including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and Northern Mariana Islands) (the "United States") as the Company may
designate, at the option of the Holder, by United States dollar check drawn on a
bank in The City of New York or by transfer of United States dollars to an
account maintained by the payee with a bank located outside the United States.
Interest on this Security due on or before Maturity shall be payable only upon
presentation and surrender at such an office or agency of the interest coupons
hereto attached as they severally mature. To the extent necessary under the
taxation laws of the United States or any official application or interpretation
of the taxation laws of the United States for such payments to be treated as
having been made outside the United States, no such check shall be mailed by any
Paying Agency to any address in the United States and no transfer of funds shall
be made to an account maintained by the payee in the United States [If the
Security is denominated and
<PAGE>

payable in United States dollars, insert--; provided, however, that payment of
principal of [(and premium, if any)] and interest on this Security (including
any additional amounts which may be payable as provided below) shall be made at
the office of the Company's Paying Agent in the Borough of Manhattan, The City
of New York if (but only if) payment in United States dollars of the full amount
of such principal, [premium,] interest or additional amounts, as the case may
be, at all offices or agencies outside the United States maintained for the
purpose by the Company in accordance with the Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions].

         The Company will pay to the Holder of this Security or any coupon
appertaining hereto who is a United States Alien (as defined below) such
additional amounts as may be necessary in order that every net payment of the
principal of [(and premium, if any)] and interest on this Security, after
deduction or withholding for or on account of any present or future tax,
assessment or other governmental charge imposed by the United States of America
or any political subdivision or taxing authority thereof or therein upon or as a
result of such payment, will not be less than the amount provided for in this
Security or in such coupon to be then due and payable; provided, however, that
the Company shall not be required to make any payment of additional amounts for
or on account of:

                  (a) any tax, assessment or other governmental charge which
         would not have been imposed but for (i) the existence of any present or
         former connection between such Holder (or between a fiduciary, settlor,
         beneficiary, member or shareholder of, or possessor of a power over,
         such Holder, if such Holder is an estate, trust, partnership or
         corporation) and the United States of America, including, without
         limitation, such Holder (or such fiduciary, settlor, beneficiary,
         member, shareholder or possessor) being or having been a citizen or
         resident thereof or being or having been present or engaged in trade or
         business therein or having or having had a permanent establishment
         therein or (ii) the presentation by the Holder of such Security or any
         coupon appertaining thereto for payment on a date more than 10 days
         after the date on which such payment became due and payable or the date
         on which payment thereof is duly provided for, whichever occurs later;

                  (b) any estate, inheritance, gift, sales, transfer, personal
         property tax or similar tax, assessment or other governmental charge;

                  (c) any tax, assessment or other governmental charge imposed
         by reason of such Holder's past or present status as a personal holding
         company or foreign personal holding company with respect to the United
         States of America or as a corporation which accumulates earnings to
         avoid United States federal income tax;

                  (d) any tax, assessment or other governmental charge which is
         payable otherwise than- by withholding from payments of principal of
         [(and premium, if any)] or interest on, such Security;

                  (e) any tax, assessment or other governmental charge required
         to be withheld by any Paying Agent from any payment of principal of
         [(and premium, if any)] or

                                      C-2
<PAGE>

          interest on, the Securities, if such payment can be made without such
          withholding by any of the other Paying Agents in Western Europe;

               (f) any tax, assessment or other governmental charge which would
          not have been imposed but for the failure to comply with
          certification, information, documentation or other reporting
          requirements concerning the nationality, residence, identity or
          connections with the United States of America of the Holder or
          beneficial owner of such Security or any coupon appertaining thereto,
          if such compliance is required by statute or by regulation of the
          United States Treasury Department as a pre-condition to relief or
          exemption from such tax, assessment or other governmental charge;

               (g) any tax, assessment or other governmental charge imposed on
          interest received by (i) a 10% shareholder (as defined in Section
          871(h)(3)(B) of the United States Internal Revenue Code of 1986, as
          amended, and the regulations that may be promulgated thereunder) of
          the Company or (ii) a controlled foreign corporation within the
          meaning of the United States Internal Revenue Code of 1986, as
          amended; or

               (h) any combination of items (a), (b), (c), (d), (e), (f) and (g)

nor will additional amounts be paid with respect to any payment of principal of
[(and premium, if any)] or interest on this Security to any Holder which is a
United States Alien who is a fiduciary or partnership or other than the sole
beneficial owner of any such payment to the extent that a beneficiary or settlor
with respect to such fiduciary, a member of such a partnership or the beneficial
owner would not have been entitled to the additional amounts had such
beneficiary, settlor, member or beneficial owner been the Holder of this
Security or any coupon appertaining hereto. Except as specifically provided in
the Securities of this series, the Company shall not be required to make any
payment with respect to any tax, assessment or governmental charge imposed by
any government or any political subdivision thereof or taxing authority therein.
Whenever in this Security there is mentioned, in any context, the payment of the
principal of [(or premium, if any)] or interest on, or in respect of, a Security
or any coupon appertaining thereto, such mention shall be deemed to include
mention of the payment of additional amounts provided for herein to the extent
that, in such context, additional amounts are, were or would be payable in
respect thereof pursuant to the provisions hereof and express mention of the
payment of additional amounts (if applicable) in any provisions hereof shall not
be construed as excluding additional amounts in those provisions hereof where
such express mention is not made. The term "United States Alien" means any
Person who, for United States federal income tax purposes, is a foreign
corporation, a non-resident alien individual, a non-resident alien fiduciary of
a foreign estate or trust or a foreign partnership to the extent that one or
more of its members is, for United States federal income tax purposes, a foreign
corporation, a non-resident alien individual or a non-resident alien fiduciary
of a foreign estate or trust.

         [Notwithstanding the foregoing, if and so long as a certification,
information, documentation or other reporting requirement with respect to any
and all Securities of this

                                      C-3
<PAGE>

series referred to in the [fifth] paragraph on the reverse hereof would be fully
satisfied by payment of a withholding tax, backup withholding tax or similar
charge, the Company may elect to have the provisions of this paragraph apply in
lieu of the provisions of such paragraph, which election may be stated in the
Determination Notice (as defined in such [fifth] paragraph). In such event, the
Company will pay as additional amounts with respect to any Security of this
series that the Company determines is subject to such requirement such amounts
as may be necessary so that every net payment made following the effective date
of such requirement outside the United States by the Company or any of its
Paying Agents of principal [(and premium, if any)] or interest due in respect of
any Bearer Security or any coupon of which the beneficial owner is a United
States Alien (but without any requirement that the nationality, residence or
identity of such beneficial owner be disclosed to the Company, any Paying Agent
or any governmental authority), after deduction or withholding for or on account
of such withholding tax, backup withholding tax or similar charge (other than a
withholding tax, backup withholding tax or similar charge which (a) would not be
applicable to a payment made to a custodian, nominee or other agent of the
beneficial owner or which can be satisfied by such a custodian, nominee or other
agent certifying to the effect that such beneficial owner is a United States
Alien; provided, however, in each case that payment by such custodian, nominee
or agent to such beneficial owner is not otherwise subject to any requirement
referred to in this paragraph, (b) is applicable only to payment by a custodian,
nominee or other agent of the beneficial owner to such beneficial owner, (c)
would not be applicable to a payment made by any other Paying Agent of the
Company in Western Europe, or (d) is imposed as a result of the presentation of
such Bearer Security or coupon for payment on a date more than 10 days after the
date on which such payment becomes due and payable or the date on which payment
thereof is duly provided for, whichever occurs later), will not be less than the
amount provided for in such Bearer Security or coupon to be then due and
payable.

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. This Security is one of the
Securities originally sold under the Company's Prospectus dated , 19 , as
supplemented by a Prospectus Supplement dated , 19 .

         Unless the certificate of authentication hereon has been executed by or
on behalf of Chemical Bank, the Trustee under the Indenture, or its successor
thereunder, by the manual signature of one of its authorized officers, neither
this Security, nor any coupon appertaining hereto, shall be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal and coupons bearing the facsimile signature of
______________________to be annexed hereto.

Dated as of          , 19

                                                   UNIVERSAL CORPORATION

                                      C-4
<PAGE>

[Seal]   By:
                                     Name:
                                     Title:

Attest:


- ---------------------------------
           Secretary

                                [Form of Reverse]

         This Security is one of a duly authorized issue of Securities (herein
called the "Securities") of the Company, unlimited in aggregate principal
amount, issued and to be issued in one or more series under an indenture dated
as of ___________, 1991 between the Company and Chemical Bank, Trustee (herein
called the `Trustee", which term includes any successor trustee under the
Indenture (as hereinafter defined)), to which indenture and all-indentures
supplemental thereto (the indenture as supplemented, being herein called the
"Indenture") reference is hereby made for a statement of the respective rights
thereunder of the Company, the Trustee and the Holders of the Securities and any
coupons appertaining thereto and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [,limited in aggregate principal amount to U.S.$
]. The Securities of this series are issuable as Bearer Securities, with
interest coupons attached, in the denomination of U.S.$ [,and as Registered
Securities, without coupons, in denominations of U.S.$ and any integral multiple
thereof]. [As provided in the Indenture and subject to certain limitations
therein set forth, Bearer Securities and Registered Securities of this series
are exchangeable for a like aggregate principal amount of Registered Securities
of this series and of like tenor of any authorized denominations, as requested
by the Holder surrendering the same, upon surrender of the Security or
Securities to be exchanged, with all unmatured coupons and all matured coupons
in default thereto appertaining, at any office or agency described below where
Registered Securities of this series may be presented for registration of
transfer; provided, however, that Bearer Securities surrendered in exchange for
Registered Securities between a Record Date and the relevant Interest Payment
Date shall be surrendered without the coupon relating to such Interest Payment
Date. Registered Securities, including Registered Securities received in
exchange for Bearer Securities, may not be exchanged for Bearer Securities.]

         [If applicable, insert--The Securities of this series are subject to
redemption [(1)] [If applicable, insert--on in any year commencing with the year
and ending with the year through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, [and (2)1] [If
applicable, insert--at any time [on or after , 19 ] as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): if redeemed [on or before , %, and if
redeemed] during the 12-month period beginning of the years indicated:

                                      C-5
<PAGE>

                       Redemption                            Redemption
        Year              Price                Year             Price
        ----              -----                ----             -----







and thereafter at a Redemption Price equal to % of the principal amount,] [and (
)] under the circumstances described in the next [two] succeeding paragraph[s]
at a Redemption Price equal to 100% of the principal amount, together in the
case of any such redemption [If applicable, insert--(whether through operation
of the sinking fund or otherwise)] with accrued interest to the Redemption Date;
provided, however, that interest installments on this Security whose Stated
Maturity is on or prior to such Redemption Date will be payable only upon
presentation and surrender of coupons for such interest (at an office or agency
located outside the United States, except as herein provided otherwise).]

         [If applicable, insert--The Securities of this series are subject to
redemption (1) on in any year commencing with the year and ending with the year
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at any time [on
or after , 19 ], as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below: if redeemed during the 12-month period beginning of the years indicated:

                                      C-6
<PAGE>

               Redemption Price              Redemption Price
               for Redemption                for Redemption Otherwise
               Through Operation             Than Through Operation
Year           of the Sinking Fund           of the Sinking Fund
- ----           -------------------           -------------------


                                      C-7
<PAGE>

and thereafter at a Redemption Price equal to     % of the principal amount and
(3) under the circumstances described in the next [two] succeeding paragraph[s]
at a Redemption Price equal to 100% of the principal amount, together in the
case of any such redemption (whether through operation of the sinking fund or
otherwise) with accrued interest to the Redemption Date; provided, however, that
installments of interest on this Security whose Stated Maturity is on or prior
to such Redemption Date will be payable only upon presentation and surrender of
coupons for such interest (at an office or agency located. outside the United
States, except as herein provided otherwise).] [Notwithstanding the foregoing,
the Company may not, prior to         , redeem any Securities of this series as
contemplated by Clause [(2)] above as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than    % per annum.]

         The Securities of this series may be redeemed, as a whole but not in
part, at the option of the Company, at a Redemption Price equal to 100% of their
principal amount, together with interest accrued to the date fixed for
redemption, if, as a result of any amendment to, or change in, the laws (or any
regulations or rulings promulgated thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting taxation,
or any amendment to or change in an official position regarding the application
or interpretation of such laws, regulations or rulings, which amendment or
change is effective on or after         , 19 , the Company will become obligated
to pay additional amounts (as described on the face hereof) on the next
succeeding Interest Payment Date, provided that such obligation to pay
additional amounts cannot be avoided by the use of reasonable measures available
to the Company; provided, however, that in the opinion of the Company, which
opinion shall be rendered in good faith, such measures need not be used if they
have or will have a material adverse impact on the conduct of its business;
provided further, however, that (a) no notice of such redemption may be given
earlier than 90 days prior to the earliest date on which the Company would be
obligated to pay such additional amounts were a payment in respect of the
Securities of this series then due, and (b) at the time notice of such
redemption is given, such obligation to pay such additional amounts remains in
effect. Immediately prior to the giving of any notice of redemption pursuant to
this paragraph, the Company shall deliver to the Trustee a certificate stating
that the Company is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to the right of the
Company so to redeem have occurred and an opinion of McGuire, Woods, Battle &
Boothe to such effect based on such statement of facts.

                                      C-8
<PAGE>

         [If applicable*, insert--In addition, if the Company determines that
any payment made outside the United States by the Company or any of its Paying
Agents of the full amount of principal [, premium, if any,] or interest due with
respect to any Bearer Security or coupon would, under any present or future laws
or regulations of the United States affecting taxation or otherwise, be subject
to any certification, information, documentation or other reporting requirement
of any kind, the effect of which requirement is the disclosure to the Company,
any Paying Agent or any governmental authority of the nationality, residence or
identity of a beneficial owner of such Bearer Security or coupon who is a United
States Alien (as defined on the face hereof) (other than such a requirement (a)
which would not be applicable to a payment made by the Company or any one of its
Paying Agents (i) directly to the beneficial owner or (ii) to any custodian,
nominee or other agent of the beneficial owner, or (b) which can be satisfied by
the custodian, nominee or other agent certifying that the beneficial owner is a
United States Alien, provided in each case referred to in clauses (a)(ii) and
(b) that payment by such custodian, nominee or other agent of such beneficial
owner is not otherwise subject to any such requirement or (c) would not be
applicable to a payment made to any other Paying Agent in Western Europe); the
Company at its election will either (x) redeem the Securities of this series, as
a whole but not in part, at a Redemption Price equal to 100% of their principal
amount, together with interest accrued to the date fixed for redemption and if
any such Holder fails to present its Security for redemption, such Holder will
not be entitled to any additional amounts, or (y) if and so long as the
conditions of the [third] paragraph on the face of this Security are satisfied,
pay the additional amounts specified in such paragraph. The Company will make
such determination and election and notify the Trustee thereof as soon as
practicable, and the Trustee will promptly give notice of such determination in
the manner provided below (the "Determination Notice"),in each case stating the
effective date of such certification, information, documentation or other
reporting requirement, whether the Company will redeem the Securities or will
pay the additional amounts specified in such paragraph and (if applicable) the
last date by which the redemption of     the Securities must take place. If the
Company elects to redeem the Securities, such redemption shall take place on
such date, not later than one year after publication of the Determination
Notice, as the Company elects by notice to the Trustee at least 75 days before
such date, unless shorter notice is acceptable to the Trustee. Upon receipt of
notice from the Company as to the date of redemption, the Trustee shall cause
notice thereof to be duly given in the manner provided below. Notwithstanding
the foregoing, the Company will not so redeem the Securities if the Company
subsequently determines, not less than 30 days prior to the date fixed for
redemption, that subsequent payments on Securities would not be subject to any
such requirement, in which case the Company will promptly notify the Trustee,
which will promptly give notice of that determination in the manner provided
below, and any earlier redemption notice will thereupon be revoked and of no
further effect. If the Company elects as provided in clause (y) above to pay
additional amounts, and as long as the Company is obligated to pay such
additional amounts, the Company may subsequently redeem the Securities, at any
time, as a whole but not in part, at a



- -------------------
*    Generally, this provision will only be applicable if the Securities of the
     series bear interest at a fixed rate.

                                      C-9
<PAGE>

Redemption Price equal to 100% of their principal amount, together with interest
accrued to the date fixed for redemption, including any additional amounts
required to be paid but without reduction for applicable United States of
America withholding taxes.]

         With respect to any redemption made pursuant to the terms of this
Security, no payment in respect of the portion of the Redemption Price which
represents accrued interest thereon shall be made at any office or agency of the
Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States.

         [The sinking fund for this series provides for the redemption on
in each year, beginning with the year and ending with the year    , of [not less
than] U.S.$      [("mandatory sinking fund") and not more than U.S.$      ]
aggregate principal amount of Securities of this series. [Securities of this
series acquired or redeemed by the Company otherwise than through [mandatory]
sinking fund payments may be credited against subsequent [mandatory] sinking
fund payments otherwise required to be made [in the inverse order in which they
become due].]

         Notice of redemption will be given by publication in an Authorized
Newspaper in The City of New York and, if the Securities of this series are then
listed on [The International Stock Exchange of the United Kingdom and the
Republic of Ireland Limited] [the Luxembourg Stock Exchange] [or] any [other]
stock exchange located outside the United States and such stock exchange shall
so require, in [London] [Luxembourg] [or] in any [other] required city outside
the United States or, if not practicable, elsewhere in Europe, [and by mail to
Holders of Registered Securities,] not less than 30 nor more than 60 days prior
to the date fixed for redemption, all as provided in the Indenture.

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

         [[Except as otherwise provided herein,] the Securities of this series
are not subject to any sinking fund and are not subject to redemption at the
option of the Company prior to maturity.]

         The provisions of Article Fourteen of the Indenture [do not] apply to
Securities of this series.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected and any related coupons under the Indenture at any time by the Company
and the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the Securities at the time Outstanding of each series and
affected thereby. The Indenture also contains provisions permitting the Holders
of specified percentages in aggregate principal amount of the Securities of each
series at the time Outstanding on behalf of the Holders of all Securities of
such series and any related coupons to waive compliance by the Company with
certain provisions of the

                                     C-10
<PAGE>

Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and
any coupon appertaining hereto and of any Security issued in exchange herefor or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Security.

         As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series or any related coupon will have any right
to institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to this series, the
Holders of not less than 25% in principal amount of the Outstanding Securities
of this series shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, and the
Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Securities of this series a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days; provided, however, that such limitations do not apply to a suit instituted
by the Holder hereof or any related coupon for the enforcement of payment of the
principal of [(and premium, if any)] or any interest on this Security or payment
of such coupon on or after the respective due dates expressed herein or in such
coupon.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of [(and premium, if any)]
and any interest (including additional amounts, as described on the face hereof)
on this Security at the times, places and rate, and in the coin or currency,
herein prescribed.

         Title to [Bearer] Securities and coupons shall pass by delivery. As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of Registered Securities may be registered on the Security Register
of the Company, upon surrender of a Registered Security for registration of
transfer at the Corporate Trust Office of the Trustee or such other office or
agency of the Company as may be designated by it in the Borough of Manhattan,
The City of New York, or, subject to any laws or regulations applicable thereto
and to the right of the Company (limited as provided in the Indenture) to
rescind the designation of any such transfer agent, at the [main] offices of
in      and     in      or at such other offices or agencies as the Company may
designate, 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 thereof or his attorney duly authorized in writing, and thereupon one
or more new Registered Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.]

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

         The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of a Bearer Security of any series and any coupon
appertaining thereto [, and

                                     C-11
<PAGE>

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

         Each Security of this series shall be dated the date of [In the case of
Securities of a series to be offered pursuant to a Periodic Offering, insert --
the related Predecessor Security; if there is no Predecessor Security, insert --
its authentication] [In the case of Securities of a series other than a series
to be offered pursuant to a Periodic Offering, insert -- the original issuance
of the first Security of such series to be issued].

         The Indenture, the Securities and any coupons appertaining thereto
shall be governed by and construed in accordance with the laws of the State of
New York.

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

                            [Form of Face of Coupon]

         ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

                                              UNIVERSAL CORPORATION


                                                   No. ________________
                                                   U.S.$______________
                                                   Due _______________

         Unless the Security to which this coupon appertains shall have been
called for previous redemption and payment thereof duly provided for on the date
set forth hereon, Universal Corporation (herein called the "Company") will pay
to bearer, upon surrender hereof, the amount shown hereon (together with any
additional amounts in respect thereof which the Company may be required to pay
according to the terms of said Security and the Indenture referred to therein)
at the Paying Agents set out on the reverse hereof or at such other offices or
agencies (which, except as otherwise provided in the Security to which this
coupon appertains, shall be located outside the United States of America
(including the States and the District of Columbia) and its possessions
(including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and Northern Mariana Islands) (the "United States")) as the Company may
designate from time to time, at the option of the Holder, by United States
dollar check drawn on a bank in the City of New York or by transfer of United
States dollars to an account maintained by the payee with a bank located outside
the United States, being (one year's) interest then payable on said Security,
provided, that no such check shall be mailed by any Paying Agent to an address
in the

                                     C-12
<PAGE>

United States, and no transfer of funds shall be made to an account maintained
by the payee in the United States.

                              UNIVERSAL CORPORATION


                           By: ______________________


                                 [Reverse of Coupon]


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

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

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

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

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



- ------------------------
     * Insert names and addresses of initial Paying Agents located outside the
United States.

                                     C-13
<PAGE>

                                    EXHIBIT D

                      [FORM OF BEARER SECURITY WHICH IS AN
                        ORIGINAL ISSUE DISCOUNT SECURITY
                           AND FORM OF RELATED COUPON]

                           [Form of Face of Security]

         ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.



         [Insert any other legend required by the Internal Revenue Code and the
Regulations thereunder.]

                              UNIVERSAL CORPORATION

No. B-                                                    U.S. $

         Universal Corporation, a Virginia corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to bearer
upon presentation and surrender of this Security the principal sum of
_________________________ Thousand United States Dollars on
           [If the Security is interest-bearing, and to pay interest thereon,
from the date hereof, [semi-annually in arrears on      and      in each year]
[annually in arrears on      in each year,] commencing ,    19  , and at
Maturity at the rate of      % per annum, until the principal hereof is paid or
duly made available for payment [If applicable, insert--, and (to the extent
that the payment of such interest shall be legally enforceable) at the rate of
% per annum on any overdue principal and premium and on any overdue installment
of interest]. Interest on this Security due on or before Maturity shall be
payable only upon presentation and surrender at such an office or agency of the
interest coupons hereto attached as they severally mature]. [If the Security is
not to bear interest prior to Maturity, insert--The principal of this Security
shall not bear interest except in the case of a default in payment of principal
upon acceleration, upon redemption or at Stated Maturity, and in such case the
overdue principal of this Security shall bear interest at the rate of      % per
annum (to the extent that the payment of such interest shall be legally
enforceable), which shall accrue from the date of such default in payment to the
date payment of such principal has been made or duly provided for. Interest on
any overdue principal shall be payable on demand. Any interest on any overdue
principal shall bear interest at the rate of      % per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such default in payment to the date payment of such
interest has been made or duly provided for, and such interest shall also be
payable on demand.] Such payments [(including premium, if any)] shall be made,
subject to any laws or regulations applicable thereto and to the right of the
Company (limited as provided in the Indenture) to rescind the designation of
any such Paying Agent, at the [main] offices of      in     ,     in     ,
in      ,     in      and in      , or
<PAGE>

at such other offices or agencies outside the United States of America
(including the States and the District of Columbia) and its possessions
(including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and Northern Mariana Islands) (the "United States") as the Company may
designate, at the option of the Holder, by United States dollar check drawn on a
bank in The City of New York or by transfer of United States dollars to an
account maintained by the payee with a bank located outside the United States.
To the extent necessary under the taxation laws of the United States or any
official application or interpretation of the taxation laws of the United States
for such payments to be treated as having been made outside the United States,
no such check shall be mailed by any Paying Agency to any address in the United
States and no transfer of funds shall be made to an account maintained by the
payee in the United States [If Security is denominated and payable in United
States dollars, insert--; provided, however, that payment of principal of [(and
premium, if any)] and [any] interest on this Security (including any additional
amounts which may be payable as provided below) shall be made at the office of
the Company's Paying Agent in the Borough of Manhattan, The City of New York, if
(but only if) payment in United States dollars of the full amount of such
principal [, premium] [, interest] or additional amounts, as the case may be, at
all offices or agencies outside the United States. maintained for the purpose by
the Company in accordance with the Indenture is illegal or effectively precluded
by exchange controls or other similar restrictions].

         The Company will pay to the Holder of this Security [If the Security is
interest-bearing, insert--or any coupon appertaining hereto] who is a United
States Alien (as defined below) such additional amounts as may be necessary in
order that [If Security is interest-bearing, insert--every net payment of the
principal of [(and premium, if any)] and interest on this Security] [If the
Security is not to bear interest prior to Maturity, insert--(i) the net payment
of principal of (and interest on overdue principal, if any, on) this Security
and (ii) the net proceeds from the sale or exchange of this Security, to the
extent of the issue price plus accrued but unpaid original issue discount],
after deduction or withholding for or on account of any present or future tax,
assessment or other governmental charge imposed by the United States of America
or any political subdivision or taxing authority thereof or therein upon or as a
result of such payment [If the Security is not to bear interest prior to
Maturity, insert--or as a result of such sale or exchange], will not be less
than the amount provided for in this Security [If the Security is
interest-bearing, insert--or in such coupon] to be then due and payable [If the
Security is not to bear interest prior to Maturity, insert--or, in the case of a
sale or exchange, the amount of the net proceeds from the sale or exchange
before any such tax, assessment or other governmental charge], provided,
however, that the Company shall not be required to make any payment of
additional amounts for or on account of:

                  (a) any tax, assessment or other governmental charge which
         would not have been imposed but for (i) the existence of any present or
         former connection between such Holder (or between a fiduciary, settlor,
         beneficiary, member or shareholder of, or possessor of a power over,
         such Holder, if such Holder is an estate, trust, partnership or
         corporation) and the United States of America, including, without
         limitation, such Holder (or such fiduciary, settlor, beneficiary,
         member, shareholder or possessor) being or having been a citizen or
         resident thereof or being or having been present or engaged in trade or
         business therein or having or having

                                      D-2
<PAGE>

had a permanent establishment therein or (ii) the presentation by the Holder of
such Security [If the Security is interest-bearing, insert--or any coupon
appertaining thereto] for payment on a date more than 10 days after the date on
which such payment became due and payable or the date on which payment thereof
is duly provided for, whichever occurs later;

     (b) any estate, inheritance, gift, sales, transfer, personal property tax
or similar tax, assessment or other governmental charge;

     (c) any tax, assessment or other governmental charge imposed by reason of
such Holder's past or present status as a personal holding company or foreign
personal holding company with respect to the United States of America or as a
corporation which accumulates earnings to avoid United States federal income
tax;

     (d) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments of [If the Security is
interest-bearing, insert--principal of [(and premium, if any)] or interest on,
such Security] [If the Security is not to bear interest prior to Maturity,
insert--principal of ([and premium, if any] or interest on overdue principal, if
any, on) such Security or from payments from the proceeds of a sale or exchange
of such Security];

     (e) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of principal of [(and premium, if
any)] or interest on, the Securities, if such payment can be made without such
withholding by any of the other Paying Agents in Western Europe;

     (f) any tax, assessment or other governmental charge which would not have
been imposed but for the failure to comply with certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connections with the United States of America of the
Holder or beneficial owner of such Security [If the Security is
interest-bearing, insert--or any coupon appertaining thereto], if such
compliance is required by statute or by regulation of the United States Treasury
Department as a pre-condition to relief or exemption from such tax, assessment
or other governmental charge;

     (g) any tax, assessment or other governmental charge imposed [If the
Security is interest-bearing, insert--on interest received by (i) a 10%
shareholder (as defined in Section 871(h)(3)(B) of the United States Internal
Revenue Code of 1986, as amended, and the regulations that may be promulgated
thereunder) of the Company or (ii) a controlled foreign corporation within the
meaning of the United States Internal Revenue Code of 1986, as amended] [If the
Security is not to bear interest prior to Maturity, insert--(i) by reason of
such Holder's past or present status as a 10% shareholder (as defined in Section
871(h)(3)(B) of the United States Internal Revenue Code of 1986, as amended, and
the regulations that may be promulgated thereunder) of the Company or (ii) by
reason of such Holder's past or present status as a controlled foreign
corporation within the meaning of the United States Internal Revenue Code of
1986, as amended)]; or

                                      D-3
<PAGE>

          (h)    any combination of items (a), (b), (c), (d), (e), (f) and (g);

          nor will additional amounts be paid with respect to any payment of [If
          the Security is interest-bearing, insert--principal of [(and premium,
          if any)] or interest on this Security] [If the Security is not to bear
          interest prior to Maturity, insert--principal of [or interest on
          overdue principal, if any, on] this Security or of the proceeds of any
          sale or exchange of this Security] to any Holder which is a United
          States Alien who is a fiduciary or partnership or other than the sole
          beneficial owner of any such payment to the extent that a beneficiary
          or settlor with respect to such fiduciary, a member of such a
          partnership or the beneficial owner would not have been entitled to
          the additional amounts had such beneficiary, settlor, member or
          beneficial owner been the Holder of this Security [If the Security is
          interest-bearing, insert--or any coupon appertaining hereto]. Except
          as specifically provided in the Securities of this series, the Company
          shall not be required to make any payment with respect to any tax,
          assessment or governmental charge imposed by any government or any
          political subdivision thereof or taxing authority therein. Whenever in
          this Security there is mentioned, in any context, the payment of the
          principal of [(or premium, if any)] or interest on, or in respect of,
          a Security [If the Security is interest-bearing, insert--or any coupon
          appertaining thereto], such mention shall be deemed to include mention
          of the payment of additional amounts provided for herein to the extent
          that, in such context, additional amounts are, were or would be
          payable in respect thereof pursuant to the provisions hereof and
          express mention of the payment of additional amounts (if applicable)
          in any provisions hereof shall not be construed as excluding
          additional amounts in those provisions hereof where such express
          mention is not made. The term "United States Alien" means any Person
          who, for United States federal income tax purposes, is a foreign
          corporation, a non-resident alien individual, a non-resident alien
          fiduciary of a foreign estate or trust, or a foreign partnership to
          the extent that one or more of its members is, for United States
          federal income tax purposes, a foreign corporation, a non-resident
          alien individual or a non-resident alien fiduciary of a foreign estate
          or trust.

     [Notwithstanding the foregoing, if and so long as a certification,
information, documentation or other reporting requirement with respect to any
and all Securities of this series referred to in the [fourth] paragraph on the
reverse hereof would be fully satisfied by payment of a withholding tax, backup
withholding tax or similar charge, the Company may elect to have the provisions
of this paragraph apply in lieu of the provisions of such paragraph, which
election may be stated in the Determination Notice (as defined in such [fourth]
paragraph). In such event, the Company will pay as additional amounts with
respect to any Security of this series that the Company determines is subject to
such requirement such amounts as may be necessary so that every net payment made
following the effective date of such requirement outside the United States by
the Company or any of its Paying Agents of principal [(and premium, if any)] [If
the Security is interest-bearing, insert--or interest] due in respect of any
Bearer Security [If the Security is interest-bearing, insert--or any coupon
appertaining thereto] of which the beneficial owner is a United States Alien
(but without any requirement that the nationality, residence or identity of such
beneficial owner be disclosed to the Company, any Paying Agent or any
governmental authority), after deduction or withholding for or on account of
such withholding tax, backup

                                      D-4
<PAGE>

withholding tax or similar charge (other than a withholding tax, backup
withholding tax or similar charge which (a) would not be applicable to a payment
made to a custodian, nominee or other agent of the beneficial owner or which can
be satisfied by such a custodian, nominee or other agent certifying to the
effect that such beneficial owner is a United States Alien; provided, however,
in each case that payment by such custodian, nominee or agent to such beneficial
owner is not otherwise subject to any requirement referred to in this paragraph,
(b) is applicable only to payment by a custodian, nominee or other agent of the
beneficial owner to such beneficial owner, (c) would not be applicable to a
payment made by any other Paying Agent of the Company in Western Europe, or (d)
is imposed as a result of the presentation of such Bearer Security [If the
Security is interest-bearing, insert--or coupon] for payment on a date more than
10 days after the date on which such payment becomes due and payable or the date
on which payment thereof is duly provided for, whichever occurs later), will not
be less than the amount provided for in such Bearer Security [If the Security is
interest-bearing, insert--or coupon] to be then due and payable.]

         Reference is hereby made to the further provisions of this Security set
forth on the-reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. This Security is one of the
Securities originally sold under the Company's Prospectus dated     ,19  , as
supplemented by a Prospectus Supplement dated      , 19

         Unless the certificate of authentication hereon has been executed by or
on behalf of Chemical Bank, the Trustee under the Indenture, or its successor
thereunder, by the manual signature of one of its authorized officers, neither
this Security, nor any coupon appertaining hereto, shall be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal and coupons bearing the facsimile signature of
                  to be annexed hereto.

Dated as of               , 19

                                             UNIVERSAL CORPORATION
                                                By: ___________________________
                                                Name:
                                                Title:

[Seal]

                                      D-5
<PAGE>

Attest:


- ---------------------------------
           Secretary

                                [Form of Reverse]

         This Security is one of a duly authorized issue of Securities (herein
called the "Securities") of the Company, unlimited in aggregate principal
amount, issued and to be issued in one or more series under an indenture dated
as of _________, 1991 between the Company and Chemical Bank, Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture (as hereinafter defined)), to which indenture and all indentures
supplemental thereto (the indenture as supplemented, being herein called the
"Indenture") reference is hereby made for a statement of the respective rights
thereunder of the Company, the Trustee and the Holders of the Securities and any
coupons appertaining thereto and of the terms upon which the Securities are, and
are to be, authenticated-and delivered. This Security is one of the series
designated on the face hereof [, limited in aggregate principal amount to U.S. $
   ]. The Securities of this series are issuable as Bearer Securities, with
interest coupons attached, in the denomination of U.S. $    [, and as Registered
Securities, without coupons, in denominations of U.S. $    and any integral
multiple thereof]. [As provided in the Indenture and subject to certain
limitations therein set forth, Bearer Securities and Registered Securities of
this series are exchangeable for a like aggregate principal amount of Registered
Securities of this series and of like tenor of any authorized denominations, as
requested by the Holder surrendering the same, upon surrender of the Security or
Securities to be exchanged, with all unmatured coupons and all matured coupons
in default thereto appertaining, at any office or agency described below where
Registered Securities of this series may be presented for registration of
transfer; provided, however, that Bearer Securities surrendered in exchange for
Registered Securities between a Record Date and the relevant Interest Payment
Date shall be surrendered without the coupon relating to such Interest Payment
Date. Registered Securities, including Registered Securities received in
exchange for Bearer Securities, may not be exchanged for Bearer Securities.]

         [If applicable, insert--The Securities of this series are subject to
redemption [(1)] [If applicable, insert--( 1) on      in any year commencing
with the year     and ending with the year     through operation of the sinking
fund for this series at a Redemption Price equal to [insert formula for
determining the amount], [and (2)]] [If applicable, insert--at any time [on or
after     ,19  ], as a whole or in part, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal amount):
if redeemed [on or before      , %      , and if redeemed] during the 12-month
period beginning of the years indicated,

                             Redemption                         Redemption
         Year                   Price             Year             Price
         ----                   -----             ----             -----



                                      D-6
<PAGE>

and thereafter at a Redemption Price equal to      % of the principal amount, I
[and ( )] under the circumstances described in the next [two] succeeding
paragraph(s) at a Redemption Price equal to [Insert formula for determining the
amount] [If the Security is interest-bearing, insert--, together in the case of
any such redemption [If applicable, insert--(whether through operation of the
sinking fund or otherwise)] with accrued interest to the Redemption Date;
provided, however, that interest installments on this Security whose Stated
Maturity is on or prior to such Redemption Date will be payable only upon
presentation and surrender of coupons for such interest (at an office or agency
located outside the United States, except as herein provided otherwise)].]

         [If applicable, insert--The Securities of this series are subject to
redemption (1) on in any year commencing with the year     and ending with the
year     through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [on or after     , 19  ], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the
principal -amount) set forth in the table below: if redeemed during the
12-month period beginning      of the years indicated,

               Redemption Price                       Redemption Price
               For Redemption                         For Redemption Otherwise
               Through Operation                      Than Through Operation
Year           Of The Sinking Fund                    Of The Sinking Fund
- ----           -------------------                    -------------------







and thereafter at a Redemption Price equal to    % of the principal amount, and
(3) under the circumstances described in the next [two] succeeding paragraph[s]
at a Redemption Price equal to [Insert formula for determining the amount] [If
the Security is interest-bearing, insert--, together in the case of any such
redemption (whether through operation of the sinking fund or otherwise) with
accrued interest to the Redemption Date; provided, however, that installments of
interest on this Security whose Stated Maturity is on or prior to such
Redemption Date will be payable only upon presentation and surrender of coupons
for such interest (at an office or agency located outside the United States,
except as herein provided otherwise)].] [Notwithstanding the foregoing, the
Company may not, prior to      redeem any Securities of this series as
contemplated by Clause [(2)] above as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than    % per annum.]

         The Securities of this series may be redeemed, as a whole but not in
part,      at the option of the Company, at a Redemption Price determined as set
forth in the preceding paragraph [If the Security is interest-bearing, insert--,
together with interest accrued to the date fixed for redemption,] if, as a
result of any amendment to, or change in, the laws (or any regulations or
rulings promulgated thereunder) of the United States

                                      D-7
<PAGE>

of America or any political subdivision or taxing authority thereof or therein
affecting taxation, or any amendment to or change in an official position
regarding the application or interpretation of such laws, regulations or
rulings, which amendment or change is effective on or after      , 19 , the
Company will become obligated to pay additional amounts (as described on the
face hereof) [If the Security is interest-bearing, insert--on the next
succeeding Interest Payment Date] [If the Security is not to bear interest prior
to Maturity, insert--at Maturity or upon the sale or exchange of any Security],
provided that such obligation to pay additional amounts cannot be avoided by the
use of reasonable measures available to the Company; provided, however, that in
the opinion of the Company, which opinion shall be rendered in good faith, such
measures need not be used if they have or will have a material adverse impact on
the conduct of its business; provided further, however, that (a) no notice of
such redemption may be given earlier than 90 days prior to the earliest date on
which the Company would be obligated to pay such additional amounts [If the
Security is interest-bearing, insert--were a payment in respect of the
Securities of this series then due] [If the Security is not to bear interest
prior to Maturity, insert--were a payment in respect of the Securities of this
series then due or a sale or exchange of a Security of this series then made],
and (b) at the time notice of such redemption is given, such obligation to pay
such additional amounts remains in effect. Immediately prior to the giving of
any notice of redemption pursuant to this paragraph, the Company shall deliver
to the Trustee a certificate stating that the Company is entitled to effect such
redemption and setting forth a statement of facts showing that the conditions
precedent to the right of the Company so to redeem have occurred and an opinion
of McGuire, Woods, Battle & Boothe to such effect based on such statement of
facts.

         [If applicable*, insert--In addition, if the Company determines that
any payment made outside the United States by the Company or any of its Paying
Agents of the full amount of principal [,premium, if any,] or interest due with
respect to any Bearer Security or coupon would, under any present or future laws
or regulations of the United States affecting taxation or otherwise, be subject
to any certification, information, documentation or other reporting requirement
of any kind, the effect of which requirement is the disclosure to the Company,
any Paying Agent or any governmental authority of the nationality, residence or
identity of a beneficial owner of such Bearer Security or coupon who is a United
States Alien (as defined on the face hereof) (other than such a requirement (a)
which would not be applicable to a payment made by the Company or any one of its
Paying Agents (i) directly to the beneficial owner or (ii) to any custodian,
nominee or other agent of the beneficial owner, or (b) which can be satisfied by
the custodian, nominee or other agent certifying that the beneficial owner is a
United States Alien, provided in each case referred to in clauses (a)(ii) and
(b) that payment by such custodian, nominee or other agent of such beneficial
owner is not otherwise subject to any such requirement or (c) would not be
applicable to a payment made to any other Paying Agent in Western Europe), the
Company at its election will either (x) redeem the Securities of this series, as
a whole but not in part, at a Redemption Price determined as set forth in the
next preceding paragraph, together with interest accrued to the date fixed for
redemption, or (y) if and so



- -------------------
*    This provision will only be applicable if the Securities of the series are
     interest-bearing and generally only if the Securities bear interest at a
     fixed rate.

                                      D-8
<PAGE>

long as the conditions of the third paragraph on the face of this Security are
satisfied, pay the additional amounts specified in such paragraph. The Company
will make such determination and election and notify the Trustee thereof as soon
as practicable, and the Trustee will promptly give notice of such determination
in the manner provided below (the "Determination Notice"), in each case stating
the effective date of such certification, information, documentation or other
reporting requirement, whether the Company will redeem the Securities or will
pay the additional amounts specified in such paragraph and (if applicable) the
last date by which the redemption of the Securities must take place. If the
Company elects to redeem the Securities, such redemption shall take place on
such date, not later than one year after publication of the Determination
Notice, as the Company elects by notice to the Trustee at least 75 days before
such date, unless shorter notice is acceptable to the Trustee. Upon receipt of
notice from the Company as to the date of redemption, the Trustee shall cause
notice thereof to be duly given in the manner provided below. Notwithstanding
the foregoing, the Company will not so redeem the Securities if the Company
subsequently determines, not less than 30 days prior to the date fixed for
redemption, that subsequent payments on Securities would not be subject to any
such requirement, in which case the Company will promptly notify the Trustee,
which will promptly give notice of that determination in the manner provided
below, and any earlier redemption notice will thereupon be revoked and of no
further effect. If the Company elects as provided in clause (y) above to pay
additional amounts, and as long as the Company is obligated to pay such
additional amounts, the Company may subsequently redeem the Securities, at any
time, as a whole but not in part, at a Redemption Price determined as set forth
in the next preceding paragraph, together with interest accrued to the date
fixed for redemption, including any additional amounts required to be paid but
without reduction for applicable United States of America withholding taxes.]

         [If applicable*, insert--In addition, if the Company determines that
any payment made outside the United States by the Company or any of its Paying
Agents of the full amount due with respect to any Bearer Security would, under
any present or future laws or regulations of the United States of America
affecting taxation or otherwise, be subject to any certification, information,
documentation or other reporting requirement of any kind, the effect of which
requirement is the disclosure to the Company, any Paying Agent or any
governmental authority of the nationality, residence or identity of a beneficial
owner of such Bearer Security who is a United States Alien (as defined on the
face hereof) (other than such a requirement (a) which would not be applicable to
a payment made by the Company or any one of its Paying Agents (i) directly to
the beneficial owner or (ii) to any custodian, nominee or other agent of the
beneficial owner, or (b) which can be satisfied by the custodian, nominee or
other agent certifying that such beneficial owner is a United States Alien,
provided in each case referred to in clauses (a)(ii) and (b) that payment by
such custodian, nominee or other agent of such beneficial owner is not otherwise
subject to any such requirement or (c) would not be applicable to a payment made
to any other Paying Agent in Western Europe), the Company at its election will
either (x) permit any Holder of a Security to present such Security for
redemption within 90 days of notice of



- -------------------
*    This provision will only be applicable if the Securities of the series are
     not to bear interest prior to Maturity.

                                      D-9
<PAGE>

such redemption, at a Redemption Price determined as set forth in the next
preceding paragraph, provided that if any such Holder fails to present its
Security for redemption, such Holder will not be entitled to any additional
amounts, or (y) if and so long as the conditions of the [third] paragraph on the
face of this Security are satisfied, pay the additional amounts specified in
such paragraph. The Company will make such determination and election and notify
the Trustee thereof as soon as practicable, and the Trustee will promptly give
notice of such determination in the manner provided below (the "Determination
Notice"), in each case stating the effective date of such certification,
information, documentation or other reporting requirement, whether the Company
has elected to permit redemption of the Securities or to pay the additional
amounts specified in such paragraph and (if applicable) the last day by which
the Company may publish any notice of redemption. If the Company elects to
permit redemption of the Securities, notice of the redemption will be given not
more than 268 days following the Determination Notice and will specify the date
fixed for redemption. The Securities will be redeemed on the day 97 days after
notice of the redemption has been given. Notwithstanding the foregoing, the
Company will not permit redemption of the Securities if the Company subsequently
determines, not less than 30 days prior to the date fixed for redemption, that
subsequent payments would not be subject to any such requirement, in which case
the Company will promptly notify the Trustee, which will promptly give notice of
that determination in the manner described below, and any earlier redemption
notice will thereupon be revoked and of no further effect.]

         With respect to any redemption made pursuant to the terms of this
Security, no payment in respect of the portion of the Redemption Price which
represents accrued interest thereon or amounts received in respect of original
issue discount shall be made at any office or agency of the Company in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States.

         [The sinking fund for this series provides for the redemption on in
each year, beginning with the year and ending with the year , of [not less than]
U.S.$   [("mandatory sinking fund") and not more than U.S.$ ] aggregate
principal amount of Securities of this series. [Securities of this series
acquired or redeemed by the Company otherwise than through [mandatory] sinking
fund payments may be credited against subsequent [mandatory] sinking fund
payments otherwise required to be made [in the inverse order in which they
become due].]

         Notice of redemption will be given by publication in an Authorized
Newspaper in The City of New York and, if the Securities of this series are then
listed on [The International Stock Exchange of the United Kingdom and the
Republic of Ireland Limited] [the Luxembourg Stock Exchange] [or] any [other]
stock exchange located outside the United States and such stock exchange shall
so require, in [London] [Luxembourg] [or] in any [other] required city outside
the United States or, if not practicable, elsewhere in Europe, [and by mail to
Holders of Registered Securities,] not less than 30 nor more than 60 days prior
to the date fixed for redemption, all as provided in the Indenture.

                                     D-10
<PAGE>

         If an Event of Default with respect to Securities of this series shall
occur and be continuing, an amount of principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture. Such amount shall be equal to[--insert formula for determining
the amount]. Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal and overdue interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and [any] interest on the Securities of this series shall
terminate.

         [[Except as otherwise provided herein,] the Securities of this series
are not subject to any sinking fund and are not subject to redemption at the
option of the Company prior to maturity.]

         The provisions of Article Fourteen of the Indenture [do not] apply to
Securities of this series.

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

         As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series [If the Security is interest-bearing,
insert--or any related coupon] will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default with respect to this series, the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series shall have made
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee, and the Trustee shall not have received from the
Holders of a majority in principal amount of the Outstanding Securities of this
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof [If the
Security is interest-bearing, insert--or if any related coupon] for the
enforcement of payment of the principal of [(and premium, if any)] or [any]
interest on this Security [If the Security is interest-bearing, insert--or
payment of such coupon] on or after the respective due dates expressed herein
[If the Security is interest-bearing, insert--or in such coupon].

                                     D-11
<PAGE>

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of [(and premium, if any)]
and [any] interest (including additional amounts, as described on the face
hereof) on this Security at the times, places and rate, and in the coin or
currency, herein prescribed.

         Title to [Bearer] Securities and coupons shall pass by delivery. [As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of Registered Securities may be registered on the Security Register
of the Company, upon surrender of a Registered Security for registration of
transfer at the [Corporate Trust Office of the Trustee or such other office or
agency of the Company as may be designated by it in the Borough of Manhattan,
The City of New York, or, subject to any laws or regulations applicable thereto
and to the right of the Company (limited as provided in the Indenture) to
rescind the designation of any such transfer agent, at the [main] offices of
in      and      in      or at such other offices or agencies as the Company may
designate, 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 thereof or his attorney duly authorized in writing, and thereupon one
or more new Registered Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.]

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

         The Company, the Trustee and any agent of the Company may treat the
bearer of a Bearer Security of any series and any coupon appertaining thereto[,
and prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered,] as the owner
thereof for all purposes, whether or not such Security or such coupon be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.

         Each Security of this series shall be dated the date of [In the case of
Securities of a series to be offered pursuant to a Periodic Offering, insert --
the related Predecessor Security; if there is no Predecessor Security, insert --
its authentication] [In the case of Securities of a series other than a series
to be offered pursuant to a Periodic Offering, insert -- the original issuance
of the first Security of such series to be issued].

         The Indenture, the Securities and any coupons appertaining thereto
shall be governed by and construed in accordance with the laws of the State of
New York.

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

                                     D-12
<PAGE>

                            [Form of Face of Coupon]

         ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

                              UNIVERSAL CORPORATION

                                 No. ___________
                                U.S.$ ___________
                                 Due ___________

         Unless the Security to which this coupon appertains shall have been
called for previous redemption and payment thereof duly provided for on the date
set forth hereon, Universal Corporation (herein called the "Company") will pay
to bearer, upon surrender hereof, the amount shown hereon (together with any
additional amounts in respect thereof-which the Company may be required to pay
according to the terms of said Security and the Indenture referred to therein)
at the Paying Agents set out on the reverse hereof or at such other offices or
agencies (which, except as otherwise provided in the Security to which this
coupon appertains, shall be located outside the United States of America
(including the States and the District of Columbia) and its possessions
(including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and Northern Mariana Islands) (the "United States")) as the Company may
designate from time to time, at the option of the Holder, by United States
dollar check drawn on a bank in The City of New York or by transfer of United
States dollars to an account maintained by the payee with a bank located outside
the United States, being [one year's] interest then payable on said Security,
provided that no such check shall be mailed by any Paying Agent to an address in
the United States, and no transfer of funds shall be made to an account
maintained by the payee in the United States.

                              UNIVERSAL CORPORATION


                         By: ___________________________


                                     D-13
<PAGE>


                               [Reverse of Coupon]

                                                   *
                            ________________________
                            ________________________
                            ________________________
                            ________________________
                            ________________________
                            ________________________



- -------------------
*    Insert names and addresses of initial paying Agents located outside the
     United States.

                                     D-14
<PAGE>

                                    EXHIBIT E
                       (FORM OF TEMPORARY GLOBAL SECURITY)

                                 (Form of Face)

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


                              UNIVERSAL CORPORATION


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


                            TEMPORARY GLOBAL SECURITY


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


         ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

         [Insert any other legend required by the Internal Revenue Code and the
Regulations thereunder.]

         THIS SECURITY IS A TEMPORARY GLOBAL SECURITY, WITHOUT COUPONS,
EXCHANGEABLE FOR ONE OR MORE PERMANENT GLOBAL SECURITIES OF THIS SERIES, WITHOUT
COUPONS, FOR DEFINITIVE REGISTERED SECURITIES OF THIS SERIES, WITHOUT COUPONS,
FOR DEFINITIVE BEARER SECURITIES OF THIS SERIES, WITH INTEREST COUPONS ATTACHED,
OR FOR A COMBINATION THEREOF, AT THE PRINCIPAL OFFICE OF THE [TRUSTEE] [SECURITY
REGISTRAR] (AS DEFINED HEREIN) IN LONDON, ON OR AFTER 45 DAYS FROM THE DATE OF
ORIGINAL ISSUANCE HEREOF UPON PRESENTATION OF THE CERTIFICATION SPECIFIED IN THE
INDENTURE (AS DEFINED HEREIN). THE RIGHTS ATTACHING TO THIS TEMPORARY GLOBAL
SECURITY AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR A
PERMANENT GLOBAL SECURITY OF THIS SERIES OR FOR DEFINITIVE REGISTERED SECURITIES
OF THIS SERIES OF DEFINITIVE BEARER SECURITIES OF THIS SERIES ARE AS SPECIFIED
HEREIN AND IN THE INDENTURE.

         NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL
SECURITY SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON EXCEPT PURSUANT
TO THE PROVISIONS HEREOF.
<PAGE>

No.

         This temporary global Security is one of a duly authorized issue of
securities (herein called the "Securities") of Universal Corporation, a Virginia
corporation (hereinafter called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), unlimited in aggregate
principal amount, issued and to be issued in one or more series under an
indenture dated as of ___________, 1991 between the Company and Chemical Bank,
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture (as hereinafter defined)), to which indenture and all
indentures supplemental thereto (the indenture as supplemented being herein
called the "Indenture") reference is hereby made for a statement of the
respective rights thereunder of the Company, the Trustee and the Holders of the
Securities and any coupons appertaining thereto and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This temporary
global Security is one of the series of Securities designated on the face
hereof, of an aggregate initial principal amount of Thousand United States
Dollars (as adjusted from time to time in accordance with the terms and
provisions hereof and as set forth on Schedule A hereto, the "Principal
Amount"), with the Interest Payment Dates, date of original issuance, and date
of Maturity specified herein and bearing interest on said Principal Amount at
the interest rate specified herein.

         The Company, for value received, hereby promises to pay to the bearer,
upon presentation and surrender of this temporary global Security, the Principal
Amount hereof on [If the temporary global Security is interest-bearing,
insert--, and to pay interest thereon, from the date hereof, [semi-annually in
arrears on and in each year] [annually in arrears on in each year,] commencing
          , 19 , and at Maturity, at the rate of % per annum, until the
principal hereof is paid or duly made available for payment [If applicable,
insert--,and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of     % per annum on any overdue principal and premium
and on any overdue installment of interest]. [If the temporary global Security
is not to bear interest prior to Maturity, insert--The principal of this
temporary global Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity, and in such case the overdue principal of this temporary global
Security shall bear interest at the rate of      % per annum (to the extent that
the payment of such interest shall be legally enforceable), which shall accrue
from the date of such default in payment to the date payment of such principal
has been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any interest on any overdue principal shall bear interest at
the rate of      % per annum (to the extent that the payment of such interest
shall be legally enforceable), which shall accrue from the date of such default
in payment to the date payment of such interest has been made or duly provided
for, and such interest shall also be payable on demand.]

         This temporary global Security shall be exchanged in whole or from time
to time in part for (i) a permanent global Security of this series, with
interest coupons, (ii) definitive Bearer Securities of this series [If the
temporary global Security is interest-bearing, insert--, with interest coupons
attached] [If the temporary global Security is not to bear interest prior to
Maturity, insert--without interest coupons], (iii) definitive Registered
Securities of this series, without interest coupons, or (iv) a combination of
the foregoing, provided that the

                                      E-2
<PAGE>

permanent global Security or the definitive Securities so issued in exchange for
this temporary global Security shall be in authorized denominations and be of
like tenor and of an equal aggregate principal amount as the portion of this
temporary global Security to be exchanged, and provided further that, unless the
Company agrees otherwise, definitive Bearer Securities of this series or
definitive Registered Securities of this series will be issued in exchange for
this temporary global Security, or any portion hereof, only if prior to the
issuance of this temporary global Security, such definitive Bearer Securities or
definitive Registered Securities were requested by written notice to the London
office of the Security Registrar and the London office of a common depositary
(the "Common Depositary"), by or on behalf of a Person who is a beneficial owner
of an interest herein, given through Morgan Guaranty Trust Company of New York,
Brussels office, as the operator of the Euroclear System (the "Euroclear
Operator"), or Centrale de Livraison de Valeurs Mobilieres, S.A. ("CEDEL" S.A.).

         In the event that this temporary global Security or any portion hereof
is exchanged for one or more permanent global Securities of this series or an
interest therein, such permanent global Security will be deposited in London
with the main office in London of the Common Depositary for the Euroclear
Operator and CEDEL S.A. Any exchange of this temporary global Security or
portion hereof, whether for a permanent global Security of this series or an
interest therein, one or more definitive Registered Securities of this series or
one or more definitive Bearer Securities of this series, will be made at the
London office of the Security Registrar, upon request and by or on behalf of the
Person who is the beneficial owner of an interest herein given through the
Euroclear Operator or CEDEL S.A., only (i) on or after a date which is at least
45 days after the date of original issuance hereof (the "Exchange Date") and
(ii) in accordance with the procedures and certification requirements set forth
in the Indenture. Upon exchange of any portion of this temporary global Security
for a permanent global Security of this series or one or more definitive
Registered Securities of this series or one or more definitive Bearer Securities
of this series, or both, the Security Registrar shall endorse Schedule A of this
temporary global Security to reflect the reduction of its Principal Amount by an
amount equal to the aggregate principal amount of the definitive Registered
Securities of this series or Bearer Securities of this series so issued in
exchange or by the aggregate principal amount to be entered on the permanent
global Security of this series, or both, whereupon the Principal Amount hereof
shall be reduced for all purposes by the amount so exchanged and noted. Except
as otherwise provided herein or in the Indenture, until exchanged in full for a
permanent global Security of this series or interests therein or one or more
definitive Registered Securities of this series or one or more definitive Bearer
Securities of this series, or both, this temporary global Security shall in all
respects be subject to and entitled to the same benefits and conditions under
the Indenture as a duly authenticated and delivered permanent global Security of
this series or definitive Registered Security of this series or definitive
Bearer Security of this series.

         Except as provided in the next paragraph, neither the Holder of this
temporary global Security nor any beneficial owner of any portion of this
temporary global Security shall be entitled to receive payment of [If the
temporary global Security is interest-bearing, insert--accrued interest][ [If
the temporary global Security is not to bear interest prior to Maturity,
insert--accrued interest on overdue principal, if any,] hereon until this
temporary

                                      E-3
<PAGE>

global Security or the relevant portion hereof has been exchanged for a
permanent global Security of this series or an interest therein or for one or
more definitive Registered Securities of this series or one or more definitive
Bearer Securities of this series or a combination thereof, as provided herein
and in the Indenture.

         The principal and any [premium or] interest in respect of any portion
of this temporary global Security payable [If the temporary global Security is
interest-bearing, insert--in respect of an Interest Payment Date or at the
Stated Maturity thereof] [If the temporary global Security is not to bear
interest prior to Maturity, insert--at Maturity or upon the sale or exchange
thereof], in each case occurring prior to the exchange of such portion for a
permanent global Security of this series or interests therein or a definitive
Registered Security or Securities of this series or a definitive Bearer Security
or Securities of this series, as the case may be, will be paid to each of the
Euroclear Operator and CEDEL S.A. with respect to the portion of this temporary
global Security held for its account only upon compliance with the procedures
and certification requirements set forth in the Indenture. If such Interest
Payment Date occurs on or after the Exchange Date, the Euroclear Operator or
CEDEL S.A., as the case may be, following the receipt of such written
certification shall exchange, in accordance with the procedures set forth in the
Indenture, the portion of the temporary global Security that relates to such
certificate for definitive Securities (which, in the absence of instructions to
the contrary, shall be an interest in a permanent global Security).

         Payment of the principal of and any premium or interest on this
temporary global Security shall be made, subject to any laws or regulations
applicable thereto and to the right of the Company (limited as provided in the
Indenture) to rescind the designation of any such Paying Agent, at the [main]
offices of    in    ,    in    ,     in     ,     in    and       in
      , or at such other office or agencies outside the United States of America
(including the States and the District of Columbia) and its possessions
(including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and Northern Mariana Islands) (the "United States") as the Company may
designate, at the option of the Holder, by United States dollar check drawn on a
bank in The City of New York or by transfer of United States dollars to an
account maintained by the payee with a bank located outside the United States.
[If the temporary global Security is interest-bearing, insert--Interest on this
temporary global Security due on or before Maturity shall be payable only upon
presentation at such an office or agency of this temporary global Security.] To
the extent necessary under the taxation laws of the United States or any
official application or interpretation of the taxation laws of the United States
for such payments to be treated as having been made outside the United States,
no such check shall be mailed by any Paying Agent to any address in the United
States and no transfer of funds shall be made to an account maintained by the
payee in the United States [If the temporary global Security is denominated and
payable in United States dollars, insert--; provided, however, that payment of
principal of [(and premium, if any)] and [any] interest on this temporary global
Security (including any additional amounts which may be payable as provided
below) shall be made at the office of the Company's Paying Agent in the Borough
of Manhattan, The City of New York if (but only if) payment in United States
dollars of the full amount of such principal, [premium], interest or additional
amounts, as the case may be, at all offices or agencies outside the United
States maintained for the purpose by the Company


                                      E-4
<PAGE>

in accordance with the Indenture is illegal or effectively precluded by exchange
controls or other similar restrictions].

     The Company will pay to any Holder of any Security of this series [If the
temporary global Security is interest-bearing, insert--or any coupon
appertaining thereto) who is a United States Alien (as defined below) such
additional amounts as may be necessary in order that [If the temporary global
Security is interest-bearing, insert--every net payment of the principal of
[(and premium, if any)] and interest on such Security] [If the temporary global
Security is not to bear interest prior to Maturity, insert-- (i) the net payment
of principal of (and interest on overdue principal, if any, on) such Security
and (ii) the net proceeds from the sale or exchange of such Security, to the
extent of issue price plus accrued but unpaid original issue discount], after
deduction or withholding for or on account of any present or future tax,
assessment or other governmental charge imposed by the United States of America
or any political subdivision or taxing authority thereof or therein upon or as a
result of such payment [If the temporary global Security is not to bear interest
prior to Maturity, insert--or as a result of such sale or exchange], will not be
less than the amount provided for in such Security [If the temporary global
Security is interest-bearing; insert--or in such coupon] to be then due and
payable [If the temporary global Security is not to bear interest prior to
Maturity, insert--or, in the case of a sale or exchange, the amount of the net
proceeds from the sale or exchange before any such tax, assessment or other
governmental charge]; provided, however, that the Company will not be required
to make any payment of additional amounts for or on account of:

          (a) any tax, assessment or other governmental charge which would not
     have been imposed but for (i) the existence of any present or former
     connection between such Holder (or between a fiduciary, settlor,
     beneficiary, member or shareholder of, or possessor of a power over, such
     Holder, if such Holder is an estate, trust, partnership or corporation) and
     the United States of America, including, without limitation, such Holder
     (or such fiduciary, settlor, beneficiary, member, shareholder or possessor)
     being or having been a citizen or resident thereof or being or having been
     present or engaged in trade or business therein or having or having had a
     permanent establishment therein or (ii) the presentation by the Holder of
     such Security [If the temporary global Security is interest-bearing,
     insert--or any coupon appertaining thereto] for payment on a date more than
     10 days after the date on which such payment became due and payable or the
     date on which payment thereof is duly provided for, whichever occurs later;

          (b) any estate, inheritance, gift, sales, transfer, personal property
     tax or similar tax, assessment or other governmental charge;

          (c) any tax, assessment or other governmental charge imposed by reason
     of such Holder's past or present status as a personal holding company or
     foreign personal holding company with respect to the United States of
     America or as a corporation which accumulates earnings to avoid United
     States federal income tax;

          (d) any tax, assessment or other governmental charge which is payable
     otherwise than by withholding from payments of [If the temporary global
     Security is interest-bearing, insert--principal of [(and premium, if any)]
     or interest on, such

                                      E-5
<PAGE>

         Security] [If the temporary global Security is not to bear interest
         prior to Maturity, insert--principal of [(and premium, if any)] or
         interest on overdue principal, if any, on such Security or from
         payments from the proceeds of a sale or exchange of such Security];

                  (e) any tax, assessment or other governmental charge required
         to be withheld by any Paying Agent from any payment of principal of
         [(and premium, if any)] or interest on, the Securities, if such payment
         can be made without such withholding by any of the other Paying Agents
         in Western Europe;

                  (f) any tax, assessment or other governmental charge which
         would not have been imposed but for the failure to comply with
         certification, information, documentation or other reporting
         requirements concerning the nationality, residence, identity or
         connections with the United States of America of the Holder or
         beneficial owner of such Security [If the temporary global Security is
         interest-bearing, insert--or any coupon appertaining thereto], if such
         compliance is required by statute or by regulation of the United States
         Treasury Department as a pre-condition to relief or exemption from such
         tax, assessment or other governmental charge;

                  (g) any tax, assessment or other governmental charge imposed
         [If the temporary global Security is interest-bearing, insert--on
         interest received by (i) a 10% shareholder (as defined in Section
         871(h)(3)(B) of the United States Internal Revenue Code of 1986, as
         amended, and the regulations that may be promulgated thereunder) of the
         Company or (ii) a controlled foreign corporation within the meaning of
         the United States Internal Revenue Code of 1986, as amended [If the
         temporary global Security is not to bear interest prior to Maturity,
         insert--(i) by reason of such Holder's past or present status as a 10%
         shareholder (as defined in Section 871(h)(3)(B) of the United States
         Internal Revenue Code of 1986, as amended, and the regulations that may
         be promulgated thereunder) of the Company or (ii) by reason of such
         Holder's past or present status as a controlled foreign corporation
         within the meaning of the United States Internal Revenue Code of 1986,
         as amended]; or

                  (h) any combination of items (a), (b), (c), (d), (e), (f) and
         (g);

         nor will additional amounts be paid with respect to any payment of [If
         the temporary global Security is interest-bearing, insert--principal of
         [(and premium, if any)] or interest on any such Security] [If the
         temporary global Security is not to bear interest prior to Maturity,
         insert--principal of (or interest on overdue principal, if any, on)
         such Security or of the proceeds of any sale or exchange of such
         Security] to any Holder which is a United States Alien who is a
         fiduciary or partnership or other than the sole beneficial owner of any
         such payment to the extent that a beneficiary or settlor with respect
         to such fiduciary, a member of such a partnership or the beneficial
         owner would not have been entitled to the additional amounts had such
         beneficiary, settlor, member or beneficial owner been the Holder of
         such Security [If the temporary global Security is interest-bearing,
         insert--or any coupon appertaining thereto]. Except as specifically
         provided in the Securities of this series

                                      E-6
<PAGE>

         (including this temporary global Security), the Company shall not be
         required to make any payment with respect to any tax, assessment or
         governmental charge imposed by any government or any political
         subdivision thereof or taxing authority therein. Whenever in this
         temporary global Security there is mentioned, in any context, the
         payment of the principal of [(or premium, if any)] or interest on, or
         in respect of, a Security [If the temporary global Security is
         interest-bearing, insert--or any coupon appertaining thereto], such
         mention shall be deemed to include mention of the payment of additional
         amounts provided for herein or therein to the extent that, in such
         context, additional amounts are, were or would be payable in respect
         thereof pursuant to the provisions hereof or thereof and express
         mention of the payment of additional amounts (if applicable) in any
         provisions hereof or thereof shall not be construed as excluding
         additional amounts in those provisions hereof where such express
         mention is not made. The term "United States Alien" means any Person
         who, for United States federal income tax purposes, is a foreign
         corporation, a non-resident alien individual, a non-resident alien
         fiduciary of a foreign estate or trust or a foreign partnership to the
         extent that one or more of the members of which is, for United States
         federal income tax purposes, a foreign corporation, a-non-resident
         alien individual or a non-resident alien fiduciary of a foreign estate
         or trust.

         Notwithstanding the foregoing, if and so long as a certification,
information, documentation or other reporting requirement with respect to any
and all Securities of this series (including this temporary global Security)
referred to in the [fourth][fifth] paragraph on the reverse hereof would be
fully satisfied by payment of a withholding tax, backup withholding tax or
similar charge, the Company may elect to have the provisions of this paragraph
apply in lieu of the provisions of such paragraph, which election may be stated
in the Determination Notice (as defined in such [fourth][fifth] paragraph). In
such event, the Company will pay as additional amounts with respect to any
Security of this series (including this temporary global Security) that the
Company determines is subject to such requirement such amounts as may be
necessary so that every net payment made following the effective date of such
requirement outside the United States by the Company or any of its Paying Agents
of principal [(and premium, if any)] or [any] interest due in respect of any
Bearer Security of this series [If the temporary global Security is
interest-bearing, insert--or any coupon appertaining thereto] of which the
beneficial owner is a United States Alien (but without any requirement that the
nationality, residence or identity of such beneficial owner be disclosed to the
Company, any Paying Agent or any governmental authority), after deduction or
withholding for or on account of such withholding tax, backup withholding tax or
similar charge (other than a withholding tax, backup withholding tax or similar
charge which (a) would not be applicable to a payment made to a custodian,
nominee or other agent of the beneficial owner or which can be satisfied by such
a custodian, nominee or other agent certifying to the effect that such
beneficial owner is a United States Alien; provided, however, in each case that
payment by such custodian, nominee or agent to such beneficial owner is not
otherwise subject to any requirement referred to in this paragraph, (b) is
applicable only to payment by a custodian, nominee or other agent of the
beneficial owner to such beneficial owner, (c) would not be applicable to a
payment made by any other Paying Agent of the Company in Western Europe, or (d)
is imposed as a result of the presentation of such Bearer Security [If the
temporary global

                                      E-7
<PAGE>

Security is interest-bearing, insert--or coupon] for payment on a date more than
10 days after the date on which such payment becomes due and payable or the date
on which payment thereof is duly provided for, whichever occurs later), will not
be less than the amount provided for in such Bearer Security [If the temporary
global Security is interest-bearing, insert--or coupon] to be then due and
payable.

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

         Unless the certificate of authentication hereon has been executed by or
on behalf of Chemical Bank, the Trustee under the Indenture, or its successors
thereunder, by the manual signature of one of its authorized officers, this
temporary global Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal:

                                              UNIVERSAL CORPORATION

Dated:


(Seal)                                        By:  ___________________________
                                              Name:
Attest:                                       Title:


- --------------------------------
          Secretary


                                [Form of Reverse]

         The Securities of this series of which this temporary global Security
is a part are issuable as Bearer Securities, with interest coupons attached, in
the denomination of U.S.$ [and as Registered Securities, without coupons, in
denominations of U.S.$ and any integral multiple thereof]. [As provided in the
Indenture and subject to certain limitations therein set forth, Bearer
Securities and Registered Securities of the series of which this temporary
global Security is a part are exchangeable for a like aggregate principal amount
of Registered Securities of this series and of like tenor of any authorized
denominations, as requested by the Holder surrendering the same, upon surrender
of the Security or Securities to be exchanged, with all unmatured coupons and
all matured coupons in default thereto appertaining, at any office or agency
described below where Registered Securities of this series may be presented for
registration of transfer; provided, however, that Bearer Securities surrendered
in exchange for Registered Securities between a Regular Record Date and the
relevant Interest Payment Date shall be surrendered without the coupon

                                      E-8
<PAGE>

relating to such Interest Payment Date. Registered Securities, including
Registered Securities received in exchange for Bearer Securities, may not be
exchanged for Bearer Securities.]

         [If applicable, insert--The Securities of this series (including this
temporary global Security and the interests represented hereby) are subject to
redemption (1)] [If applicable, insert--on       in any year commencing with the
year     and ending with the year       through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal amount, and
(2)] [If applicable, insert--at any time [on or after       ,19   ], as a whole
or in part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount), if redeemed [on or before ,
      %, and if redeemed] during the 12-month period beginning of the years
indicated:

                                      E-9
<PAGE>

                     Redemption                         Redemption
        Year           Price            Year              Price
        ----         ----------         ----            ----------





and thereafter at a Redemption Price equal to % of the principal amount,] [and
( )] [under the circumstances described in the next [two] succeeding
paragraph[s] at a Redemption Price equal to [100% of the principal amount--or
insert applicable formula for determining the amount] [If the temporary global
Security is interest-bearing, insert--, together in the case of any such
redemption [If applicable, insert--(whether through operation of the sinking
fund or otherwise)] with accrued interest to the Redemption Date; provided,
however, that interest installments on this temporary global Security whose
Stated Maturity is on or prior to such Redemption Date will be payable only upon
presentation of this temporary global Security (at an office or agency located
outside the United States, except as herein provided otherwise)].]

         [If applicable, insert--The Securities of this series (including this
temporary global Security and the interests represented hereby) are subject to
redemption (1) on     in any year commencing with the year     and ending with
the year through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [on or after        , 19 ], as a whole or in part, at the election of
the Company at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below, if redeemed during the 12-month period beginning
          of the years indicated:

                  Redemption Price                  Redemption Price
                  for Redemption                    for Redemption Otherwise
                  Through Operation                 than Through Operation
Year              of the Sinking Fund               of the Sinking Fund
- ----              -------------------               -------------------







and thereafter at a Redemption Price equal to % of the principal amount, and (3)
under the circumstances described in the next [two] succeeding paragraph[s] at a
Redemption Price equal to [100% of the principal amount--or insert applicable
formula for determining the amount] [If the temporary global Security is
interest-bearing, insert--, together in the case of any such redemption (whether
through operation of the sinking fund or otherwise) with accrued interest to the
Redemption Date; provided, however, that interest installments on this temporary
global Security whose Stated Maturity is on or prior to such Redemption Date
will be payable only upon presentation of this temporary global Security (at an
office or agency located outside the United States, except as herein provided
otherwise)].] [Notwithstanding the foregoing, the Company may not, prior to    ,
redeem the Securities of this series (including this temporary global Security
and the interests


                                     E-10
<PAGE>

represented hereby) as contemplated by Clause [(2)] above as a part of, or in
anticipation of, any refunding operation by the application, directly or
indirectly, of moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial practice) of less
than % per annum.]

         The Securities of this series (including this temporary global Security
and the interests represented hereby) may be redeemed, as a whole but not in
part, at the option of the Company, at a Redemption Price determined as set
forth in the preceding paragraph [If the temporary global Security is
interest-bearing, insert--, together with interest accrued to the date fixed for
redemption,] if, as a result of any amendment to, or change in, the laws (or any
regulations or rulings promulgated thereunder) of the United States of America
or any political subdivision or taxing authority thereof or therein affecting
taxation, or any amendment to or change in an official position regarding the
application or interpretation of such laws, regulations or rulings, which
amendment or change is effective on or after     19 , the Company will become
obligated to pay additional amounts (as described on the face thereof or hereof)
[If the temporary global Security is interest-bearing, insert--on the next
succeeding Interest Payment Date] [If the temporary global Security is not to
bear interest prior to Maturity, insert--at Maturity or upon the sale or
exchange of any Security], provided that such obligation to pay additional
amounts cannot be avoided by the use of reasonable measures available to the
Company; provided, however, that in the opinion of the Company, which opinion
shall be rendered in good faith, such measures need not be used if they have or
will have a material adverse impact on the conduct of its business; provided
further, however, that (a) no notice of such redemption may be given earlier
than 90 days prior to the earliest date on which the Company would be obligated
to pay such additional amounts [If the temporary global Security is
interest-bearing, insert--were a payment in respect of the Securities of this
series (including this temporary global Security and the interests represented
hereby) then due] [If the temporary global Security is not to bear interest
prior to Maturity, insert--were a payment in respect of the Securities of this
series (including this temporary global Security and the interests represented
hereby) then due or a sale or exchange of a Security of this series then made],
and (b) at the time such notice is given, such obligation to pay such additional
amounts remains in effect. Immediately prior to the giving of any notice of
redemption as provided in this paragraph, the Company shall deliver to the
Trustee a certificate stating that the Company is entitled to effect such
redemption and setting forth a statement of facts showing that the conditions
precedent to the right of the Company so to redeem have occurred and an opinion
of McGuire, Woods, Battle & Boothe to such effect based on such statement of
facts.

         [If applicable*, insert--In addition, if the Company determines that
any payment made outside the United States by the Company or any of its Paying
Agents of the full amount of principal [,premium, if any,] or interest due with
respect to any Bearer Security of the series of which this temporary global
Security is a part or any related coupon would, under any present or future laws
or regulations of the United States of America affecting



- -------------------
*    Generally, this provision will only be applicable if the Securities of the
     series are interest-bearing and generally only if the Securitities bear
     interest at a fixed rate.

                                     E-11
<PAGE>

taxation or otherwise, be subject to any certification, information,
documentation or other reporting requirement of any kind, the effect of which
requirement is the disclosure to the Company, any Paying Agent or any
governmental authority of the nationality, residence or identity of a beneficial
owner of such Bearer Security or coupon who is a United States Alien (as defined
on the face hereof) (other than such a requirement (a) which would not be
applicable to a payment made by the Company or any one of its Paying Agents (i)
directly to the beneficial owner or (ii) to any custodian, nominee or other
agent of the beneficial owner, or (b) which can be satisfied by the custodian,
nominee or other agent certifying that the beneficial owner is a United States
Alien, provided in each case referred to in clauses (a)(ii) and (b) that payment
by such custodian, nominee or other agent of such beneficial owner is not
otherwise subject to any such requirement or (c) would not be applicable to a
payment made to any other Paying Agent in Western Europe), the Company at its
election will either (x) redeem the Securities of this series (including this
temporary global Security and the interests represented hereby), as a whole but
not in part, at a Redemption Price determined as set forth in the next preceding
paragraph, together with interest accrued to the date fixed for redemption, or
(y) if and so long as the conditions of the [ninth] paragraph on the face of
this temporary global Security are satisfied, pay the-additional amounts
specified in such paragraph. The Company will make such determination and
election and notify the Trustee thereof as soon as practicable, and the Trustee
will promptly give notice of such determination in the manner provided below
(the "Determination Notice"), in each case stating the effective date of such
certification, information, documentation or other reporting requirement,
whether the Company will redeem the Securities (including this temporary global
Security and the interests represented hereby) or will pay the additional
amounts specified in such paragraph and (if applicable) the last date by which
the redemption of the Securities (including this temporary global Security and
the interests represented hereby) must take place. If the Company elects to
redeem the Securities (including this temporary global Security and the
interests represented hereby) such redemption shall take place on such date, not
later than one year after publication of the Determination Notice, as the
Company elects by notice to the Trustee at least 75 days before such date,
unless shorter notice is acceptable to the Trustee. Upon receipt of notice from
the Company as to the date of redemption, the Trustee will cause notice thereof
to be duly published in the manner provided below. Notwithstanding the
foregoing, the Company will not so redeem the Securities (including this
temporary global Security and the interests represented hereby) if the Company
subsequently determines, not less than 30 days prior to the date fixed for
redemption, that subsequent payments on the Securities (including this temporary
global Security and the interests represented hereby) would not be subject to
any such requirement, in which case the Company will promptly notify the
Trustee, which will promptly give notice of that determination in the manner
provided below, and any earlier redemption notice will thereupon be revoked and
of no further effect. If the Company elects as provided in clause (y) above to
pay additional amounts, and as long as the Company is obligated to pay such
additional amounts, the Company may subsequently redeem the Securities
(including this temporary global Security and the interests represented hereby),
at any time, as a whole but not in part, at a Redemption Price determined as set
forth in the next preceding paragraph, together with interest accrued to the
date fixed for redemption, including any additional amounts required to be paid
but without reduction for applicable United States of America withholding
taxes.]


                                     E-12
<PAGE>

         [If applicable*, insert--In addition, if the Company determines that
any payment made outside the United States by the Company or any of its Paying
Agents of the full amount due with respect to any Bearer Security of the series
of which this temporary global Security is a part would, under any present or
future laws or regulations of the United States of America affecting taxation or
otherwise, be subject to any certification, information, documentation, or other
reporting requirement of any kind, the effect of which requirement is the
disclosure to the Company, any Paying Agent or any governmental authority of the
nationality, residence or identity of a beneficial owner of such Bearer Security
who is a United States Alien (as defined on the face hereof) (other than such a
requirement (a) which would not be applicable to a payment made by the Company
or any one of its Paying Agents (i) directly to the beneficial owner or (ii) to
any custodian, nominee or other agent of the beneficial owner, or (b) which can
be satisfied by the custodian, nominee or other agent certifying that such
beneficial owner is a United States Alien, provided in each case referred to in
clauses (a)(ii) and (b) that payment by such custodian, nominee or other agent
of such beneficial owner is not otherwise subject to any such requirement or (c)
would not be applicable to a payment made to any other Paying-Agent in Western
Europe), the Company at its election will either (x) permit any Holder of a
Security to present such Security for redemption within 90 days of notice of
such redemption, at a Redemption Price determined as set forth in the next
preceding paragraph, provided that if any such Holder fails to present its
Security for redemption, such Holder will not be entitled to any additional
amounts, or (y) if and so long as the conditions of the [ninth] paragraph on the
face of this temporary global Security are satisfied, pay the additional amounts
specified in such paragraph. The Company will make such determination and
election and notify the Trustee thereof as soon as practicable, and the Trustee
will promptly give notice of such determination in the manner provided below
(the "Determination Notice"), in each case stating the effective date of such
certification, information, documentation or other reporting requirement,
whether the Company has elected to permit redemption of the Securities
(including this temporary global Security and the interests represented hereby)
or to pay the additional amounts specified in such paragraph and (if applicable)
the last day by which the Company may publish any notice of redemption. If the
Company elects to permit redemption of the Securities (including this temporary
global Security and the interests represented hereby), notice of the redemption
will be given not more than 268 days following the Determination Notice and will
specify the date fixed for redemption. The Securities (including this temporary
global Security and the interests represented hereby) will be redeemed on the
day 97 days after notice of the redemption has been given. Notwithstanding the
foregoing, the Company will not permit redemption of the Securities (including
this temporary global Security and the interests represented hereby) if the
Company subsequently determines, not less than 30 days prior to the date fixed
for redemption, that subsequent payments would not be subject to any such
requirement, in which case the Company will promptly notify the Trustee, which
will


- -------------------
*    Generally, this provision will only be applicable if the Securities of the
     series are not to bear interest prior to Maturity.

                                     E-13
<PAGE>

promptly give notice of that determination in the manner described below, and
any earlier redemption notice will thereupon be revoked and of no further
effect.]

         With respect to any redemption made pursuant to the terms of this
Security, no payment in respect of the portion of the Redemption Price which
represents accrued interest thereon shall be made at any office or agency of the
Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States.

         [The sinking fund for this series provides for the redemption on     in
each year, beginning with the year and ending with the year , of [not less than]
U.S.$ [("mandatory sinking fund") and not more than U.S.$ ] aggregate principal
amount of Securities of this series (including this temporary global Security
and the interests represented hereby). [Securities of this series (including
this temporary global Security and the interests represented hereby) acquired or
redeemed by the Company otherwise than through [mandatory] sinking fund payments
may be credited against subsequent [mandatory] sinking fund payments otherwise
required to be made [--in the inverse order in which they become due.]]

         [[Except as otherwise provided herein,] the Securities of this series
(including this temporary global Security and the interests represented hereby)
are not subject to any sinking fund and are not subject to redemption at the
option of the Company prior to maturity.]

         The provisions of Article Fourteen of the Indenture [do not] apply to
Securities of this series.

         Notice of redemption will be given by publication in an Authorized
Newspaper in The City of New York and, if the Securities of this series are then
listed on [The International Stock Exchange of the United Kingdom and the
Republic of Ireland, Limited] [the Luxembourg Stock Exchange] [or] any [other]
stock exchange located outside the United States and such stock exchange shall
so require, in [London] [Luxembourg] [or] in any [other] required city outside
the United States or, if not practicable, elsewhere in Europe, [and by mail to
Holders of Registered Securities], not less than 30 nor more than 60 days prior
to the dated fixed for redemption, all as provided in the Indenture.

         If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series
(including this temporary global Security and the interests represented hereby)
may be declared due and payable in the manner and with the effect provided in
the Indenture. [If the temporary global Security is not to bear interest prior
to Maturity, insert--Such amount shall be equal to [Insert formula for
determining the amount.] Upon payment (i) of the amount of principal so declared
due and payable and (ii) of interest on any overdue principal and overdue
interest (in each case to the extent that the payment of such interest shall be
legally enforceable), all of the Company's obligations in respect of the payment
of the principal of and [any] interest on the Securities of this series
(including this temporary global Security and the interests represented hereby)
shall terminate.]

                                     E-14
<PAGE>

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected [If the temporary global Security is interest-bearing, insert--and any
related coupons] under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Securities at the time Outstanding of each series and affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of each series at
the time Outstanding on behalf of the Holders of all Securities of such series
[If the temporary global Security is interest-bearing, insert--and any related
coupons] 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 temporary global Security shall
be conclusive and binding upon such Holder and upon all future Holders of this
temporary global Security and the Persons who are beneficial owners of interests
represented hereby, and of any Security (including any permanent global
Security) issued in exchange herefor or in lieu hereof whether or not notation
of such consent or waiver is made upon this temporary global Security.

         As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series [If the temporary global Security is
interest-bearing, insert--or any related coupon will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written notice of
a continuing Event of Default with respect to this series, the Holders of not
less than 25% in principal amount of the Outstanding Securities of this series
shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, and the Trustee shall not have
received from the Holders of a majority in principal amount of the Outstanding
Securities of this series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days; provided, however, that
such limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of [(and premium, if any)] or [any]
interest on this temporary global Security on or after the respective due dates
expressed herein.

         No reference herein to the Indenture and no provision of this temporary
global Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of [(and
premium, if any)] and [any] interest (including additional amounts, as described
on the face hereof) on this temporary global Security at the times, places and
rate, and in the coin or currency, herein prescribed.

         Title to [Bearer] Securities of the series of which this temporary
global Security is a part and coupons shall pass by delivery. [As provided in
the Indenture and subject to certain limitations therein set forth, the transfer
of Registered Securities of the series of which this temporary global Security
is a part may be registered in the Security Register of the Company, upon
surrender of a Registered Security for registration of transfer at the
[Corporate Trust Office of the Trustee] or such other office or agency of the
Company as may be designated by it in the Borough of Manhattan, The City of New
York, or, subject

                                     E-15
<PAGE>

to any laws or regulations applicable thereto and to the right of the Company
(limited as provided in the Indenture) to rescind the designation of any such
transfer agent, at the [main] offices of      in     and     in       or at such
other offices or agencies as the Company may designate, 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 thereof or his
attorney duly authorized in writing, and thereupon one or more new Registered
Securities of this series and of like tenor, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees.]

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

         The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of a Bearer Security of any series and any coupon
appertaining thereto[, and prior to due presentment of a Registered Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Security is registered,]
as the owner thereof for all purposes, whether or not such Security or such
coupon be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.

         Each Security of this series (including this temporary global Security)
shall be dated the date of [In the case of Securities of a series to be offered
pursuant to a Periodic Offering, insert --- the related Predecessor Security; if
there is no Predecessor Security, insert -- its authentication] [In the case of
Securities of a series other than a series to be offered pursuant to a Periodic
Offering, insert -- the original issuance of the first Security of such series
to be issued].

         The Indenture, the Securities (including this temporary global
Security) and any coupons appertaining thereto shall be governed by and
construed in accordance with the laws of the State of New York.

         All terms used in this temporary global Security which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

                                     E-16
<PAGE>

                                    EXHIBIT F

                       [Form of Permanent Global Security]

                                 [Form of Face]

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

                              UNIVERSAL CORPORATION

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

                            PERMANENT GLOBAL SECURITY

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

         [If The Permanent Global Security is to be deposited with a Common
Depositary, -- insert--ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL
BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE
LIMITATIONS PROVIDED IN SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE
CODE.

         [Insert any other legend required by the Internal Revenue Code and the
Regulations thereunder]

          [If the permanent global Security is to be deposited with a Common
Depositary, insert--THIS SECURITY IS A PERMANENT GLOBAL SECURITY, WITHOUT
COUPONS, EXCHANGEABLE FOR ONE OR MORE DEFINITIVE REGISTERED SECURITIES OF THIS
SERIES, WITHOUT COUPONS, FOR DEFINITIVE BEARER SECURITIES OF THIS SERIES, WITH
INTEREST COUPONS ATTACHED, OR FOR A COMBINATION THEREOF, AT THE PRINCIPAL OFFICE
OF THE [TRUSTEE] (AS DEFINED HEREIN) [SECURITY REGISTRAR] IN LONDON. THE RIGHTS
ATTACHING TO THIS PERMANENT GLOBAL SECURITY AND THE CONDITIONS AND PROCEDURES
GOVERNING ITS EXCHANGE FOR DEFINITIVE REGISTERED SECURITIES OF THIS SERIES OR
DEFINITIVE BEARER SECURITIES OF THIS SERIES ARE AS SPECIFIED HEREIN AND IN THE
INDENTURE.]

         [If the permanent global Security is to be deposited with a U.S.
Depository, insert--THIS SECURITY IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A U.S.
DEPOSITORY OR A NOMINEE OF A U.S. DEPOSITORY. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE U.S. DEPOSITORY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY
THE U.S. DEPOSITORY TO A NOMINEE OF THE U.S. DEPOSITORY OR BY A NOMINEE OF THE
U.S.
<PAGE>

DEPOSITORY TO THE U.S. DEPOSITORY OR ANOTHER NOMINEE OF THE U.S. DEPOSITORY) MAY
BE REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.]

         NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS PERMANENT GLOBAL
SECURITY SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON EXCEPT PURSUANT
TO THE PROVISIONS HEREOF.

No. __________________

         This permanent global Security is one of a duly authorized issue of
securities (herein called the "Securities") of Universal Corporation, a Virginia
corporation (hereinafter called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), unlimited in aggregate
principal amount, issued and to be issued in one or more series under an
indenture dated as of ___________, 1991 between the Company and Chemical Bank,
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture (as hereinafter defined)), to which indenture and all
indentures supplemental hereto (the indenture as supplemented being herein
called the "Indenture") reference is hereby made for a statement of the
respective rights thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This permanent global Security is one of the series
of Securities designated on the face hereof, of an aggregate initial principal
amount of __________________ Thousand United States Dollars (as adjusted from
time to time in accordance with the terms and provisions hereof and as set forth
on Schedule A hereto, the "Principal Amount"), with the Interest Payment Dates,
date of original issuance, and date of Maturity specified herein and bearing
interest on said Principal Amount at the interest rate specified herein.

         [If the permanent global Security is to be deposited with a Common
Depositary, insert--The Company, for value received, hereby promises to pay to
the bearer, upon presentation and surrender of this permanent global Security,
the Principal Amount hereof on          [If the permanent global Security is
interest-bearing, insert-- , and to pay interest thereon, from the date hereof,
[semi-annually in arrears on and           in each year] [annually in arrears on
         in each year,] commencing ,      19 , and at Maturity, at the rate of
    % per annum, until the principal hereof is paid or duly made available for
payment [If applicable, insert--, and (to the extent that the payment of such
interest shall be legally enforceable) at the rate of % per annum on any overdue
principal and premium and on any overdue installment of interest]. [If the
permanent global Security is not to bear interest prior to Maturity, insert--The
principal of this permanent global Security shall not bear interest except in
the case of a default in payment of principal upon acceleration, upon redemption
or at Stated Maturity, and in such case the overdue principal of this permanent
global Security shall bear interest at the rate of % per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such default in payment to the date payment of such
principal has been made or duly provided for. Interest on any overdue principal
shall be payable on demand. Any interest on any overdue principal shall bear
interest at the rate of % per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue

                                      F-2
<PAGE>

from the date of such default in payment to the date payment of such interest
has been made or duly provided for, and such interest shall also be payable on
demand.]

         [If the permanent global Security is to be deposited with a U.S.
Depository, insert--The Company, for value received, hereby promises to pay
to     , or registered assigns, the Principal Amount hereof on       [If the
permanent global Security is interest-bearing, insert--, and to pay interest
thereon, from     , 19  , or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, or, if the date of this
permanent global Security is an Interest Payment Date to which interest has
been paid or duly provided for, then from the date hereof [semi-annually
           in arrears on          and           in each year] [annually in
arrears on       in each year,] commencing        , 19    , and at Maturity,
at the rate of % per annum, until the principal hereof is paid or duly made
available for payment [If applicable, insert--, and (to the extent that the
payment of such interest shall be legally enforceable) at the rate of % per
annum on any overdue principal and premium and on any overdue installment of
interest]. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this permanent global Security [or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the        [or        ] (whether or not a
Business Day) [,as the case may be,] next preceding such Interest Payment Date.
[Except as otherwise provided in the Indenture,] any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may be paid to the Person in whose name
this permanent global Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date to be fixed by the
Trustee for the payment of such Defaulted Interest, notice whereof shall be
given to the Holder of this permanent global Security not less than 10 days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner [not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange], all as more fully provided in such
Indenture]. [If the permanent global Security is not] to bear interest prior to
Maturity, insert--The principal of this permanent global Security shall not bear
interest except in the case of a default in payment of principal upon
acceleration, upon redemption or at Stated Maturity, and in such case the
overdue principal of this permanent global Security shall bear interest at the
rate of % per annum (to the extent that the payment of such interest shall be
legally enforceable), which shall accrue from the date of such default in
payment to the date payment of such principal has been made or duly provided
for. Interest on any overdue principal shall be payable on demand. Any interest
on any overdue principal shall bear interest at the rate of % per annum (to the
extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such default in payment to the date payment of
such interest has been made or duly provided for, and such interest shall also
be payable on demand.]]

         [If the permanent global Security is to be deposited with a Common
Depositary, insert--This permanent global Security is exchangeable in whole or
from time to time in part for (i) definitive Bearer Securities of this series
[If the permanent global Security is interest-bearing, insert--, with interest
coupons attached] [If the permanent global Security is not to bear interest
prior to Maturity, insert--without interest coupons], (ii) definitive

                                      F-3
<PAGE>

Registered Securities of this series, without interest coupons, or (iii) a
combination of the foregoing, provided that the interest in this permanent
global Security being exchanged for such Bearer Securities of this series has
not been acquired from or otherwise beneficially owned by a United States
person, provided further that the definitive Securities so issued in exchange
for this permanent global Security shall be in authorized denominations and be
of like tenor and of an equal aggregate principal amount as the portion of this
permanent global Security to be exchanged, and provided further that, unless the
Company agrees otherwise, definitive Bearer Securities of this series or
definitive Registered Securities of this series will be issued in exchange for
this permanent global Security, or any portion hereof, only if at least 30 days
prior to such exchange, such definitive Bearer Securities or definitive
Registered Securities were requested by written notice to the London office of
the Security Registrar and the London office of a common depositary with respect
to the Securities of this series (the "Common Depositary"), by or on behalf of a
Person entitled thereto, given through Morgan Guaranty Trust Company of New
York, Brussels office, as the operator of the Euroclear System (the "Euroclear
Operator"), or Centrale de Livrasions de Valeurs Mobilieres, S.A. ("Cedel").]

         [If the permanent global Security is to be deposited with a U.S.
Depository, insert--This permanent global Security is exchangeable in whole or
from time to time in part for definitive Registered Securities of this series
only as provided in this paragraph. If (x) the U.S. Depository with respect to
the Securities of this series (the "U.S. Depository") notifies the Company that
it is unwilling or unable to continue as U.S. Depository for this permanent
global Security or if at any time the U.S. Depository ceases to be a clearing
agency registered under the Securities Exchange Act of 1934, as amended, (y) the
Company executes and delivers to the Trustee a Company Order providing that this
permanent global Security shall be so exchangeable or (z) there shall have
happened and be continuing an Event of Default or any event which, after notice
or lapse of time, or both, would become an Event of Default with respect to the
Securities of the series of which this permanent global Security is a part, this
permanent global Security or any portion hereof shall, in the case of clause (x)
above, be exchanged for definitive Registered Securities of this series, and in
the case of clauses (y) and (z) above, be exchangeable for definitive Registered
Securities of this series, provided that the definitive Securities so issued in
exchange for this permanent global Security shall be in authorized denominations
and be of like tenor and of an equal aggregate principal amount as the portion
of the permanent global Security to be exchanged, and provided further that, in
the case of clauses (y) and (z) above, definitive Registered Securities of this
series will be issued in exchange for this permanent global Security, or any
portion hereof, only if such definitive Registered Securities were requested by
written notice to the [Trustee] [Security Registrar] by or on behalf of a Person
who is a beneficial owner of an interest hereof given through the Holder hereof.
Any definitive Registered Securities of this series issued in exchange for this
permanent global Security, or any portion hereof, shall be registered in the
name or names of such Person or Persons as the Holder hereof shall instruct the
[Trustee] [Security Registrar]. Except as provided above, owners of beneficial
interests in this permanent global Security will not be entitled to receive
physical delivery of Securities in definitive form and will not be considered
the Holders thereof for any purpose under the Indenture.]

                                      F-4
<PAGE>

         [If the permanent global Security is to be deposited with a Common
Depositary, insert--Any exchange of this permanent global Security or portion
hereof, whether for one or more definitive Registered Securities of this series
or one or more definitive Bearer Securities of this series, will be made at the
London office of the Security Registrar, upon request of the Person who is the
beneficial owner of an interest herein given through the Euroclear Operator or
Cedel. Upon exchange of any portion of this permanent global Security for one or
more definitive Registered Securities of this series or one or more definitive
Bearer Securities of this series, or both, the Security Registrar shall endorse
Schedule A of this permanent global Security to reflect the reduction of its
Principal Amount by an amount equal to the aggregate principal amount of the
definitive Registered Securities of this series or Bearer Securities of this
series so issued in exchange, or both, whereupon the Principal Amount hereof
shall be reduced for all purposes by the amount so exchanged and noted.

         Except as otherwise provided herein or in the Indenture, until
exchanged in full for one or more definitive Registered Securities of this
series or one or more definitive Bearer Securities of this series, or both, this
permanent global Security shall in all respects be subject to and entitled to
the same benefits and conditions under the Indenture as a duly authenticated and
delivered definitive Registered Security of this series or definitive Bearer
Security of this series.]

         [If the permanent global Security is to be deposited with a U.S.
Depository, insert--Any exchange of this permanent global Security or portion
hereof for one or more definitive Registered Securities of this series will be
made at the New York office of the [Trustee] [Security Registrar]. Upon exchange
of any portion of this permanent global Security for one or more definitive
Registered Securities of this series, the [Trustee] [Security Registrar] shall
endorse Schedule A of this permanent global Security to reflect the reduction of
its Principal Amount by an amount equal to the aggregate principal amount of the
definitive Registered Securities of this series so issued in exchange, whereupon
the Principal Amount hereof shall be reduced for all purposes by the amount so
exchanged and noted. Except as otherwise provided herein or in the Indenture,
until exchanged in full for one or more definitive Registered Securities of this
series, this permanent global Security shall in all respects be subject to and
entitled to the same benefits and conditions under the Indenture as a duly
authenticated and delivered definitive Registered Security of this series.]

         [If the permanent global Security is to be deposited with a Common
Depositary, insert--Except as provided in the next paragraph, neither the Holder
of this permanent global Security nor any beneficial owner of any portion of
this permanent global Security shall be entitled to receive payment of [If the
permanent global Security is interest-bearing, insert--accrued interest] [If the
permanent global Security is not to bear interest prior to Maturity,
insert--accrued interest on overdue principal, if any,] hereon until this
permanent global Security or the relevant portion hereof has been exchanged
for an interest therein or for one or more definitive Registered Securities of
this series or one or more definitive Bearer Securities of this series or a
combination thereof, as provided herein and in the Indenture.

                                      F-5
<PAGE>

         The principal and any [premium or] interest in respect of any portion
of this permanent global Security payable [If the permanent global Security is
interest-bearing, insert--in respect of an Interest Payment Date or at the
Stated Maturity thereof [If the permanent global Security is not to bear
interest prior to Maturity, insert--at Maturity or upon the sale or exchange
thereof], in each case occurring prior to the exchange of such portion for a
definitive Registered Security or Securities of this series or a definitive
Bearer Security or Securities of this series, as the case may be, will be paid
to each of the Euroclear Operator and Cedel with respect to the portion of this
permanent global Security held for its account. Each of the Euroclear Operator
and Cedel will undertake in such circumstances to credit any such principal[,]
[premium] and interest received by it in respect of this permanent global
Security to the respective accounts of the Persons who are the beneficial owners
of such interests [on such Interest Payment Date or at Stated Maturity] [at
Maturity or upon the sale or exchange thereof]. [If the permanent global
Security is interest-bearing, insert--If a definitive Registered Security of
this series is issued in exchange for any portion of this permanent global
Security after the close of business at the office or agency where such exchange
occurs on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (iii any Special
Record Date and before the opening of business at such office or agency on the
related proposed date for payment of Defaulted Interest, interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Euroclear Operator and Cedel, and the
Euroclear Operator and Cedel will undertake in such circumstances to credit such
interest to the account of the Person who was the beneficial owner of such
portion of this permanent global Security on such Regular Record Date or Special
Record Date, as the case may be.]]

         [If the permanent global Security is to be deposited with a U.S.
Depository, insert--Except as provided in the next paragraph, neither the Holder
of this permanent global Security nor any beneficial owner of any portion of
this permanent global Security shall be entitled to receive payment of [If the
permanent global Security is interest-bearing, insert--accrued interest] [If the
permanent global Security is not to bear interest prior to Maturity,
insert--accrued interest on overdue principal, if any,] hereon until this
permanent global Security or the relevant portion hereof has been exchanged
for one or more definitive Registered Securities of this series, as provided
herein and in the Indenture.

         The principal and any [premium or] interest in respect of any portion
of   this permanent global Security payable [If the permanent global Security is
interest-bearing, insert--in respect of an Interest Payment Date or at the
Stated Maturity thereof [If the permanent global Security is not to bear
interest prior to Maturity, insert--at Maturity or upon the sale or exchange
thereof], in each case occurring prior to the exchange of such portion for a
definitive Registered Security or Securities of this series, will be paid, as
provided herein, to the Holder hereof which will undertake in such circumstances
to credit any such principal[,] [premium] and interest received by it in respect
of this permanent global Security to the respective accounts of the Persons who
are the beneficial owners of such interests [on such Interest Payment Date or at
Stated Maturity] [at Maturity or upon

                                      F-6
<PAGE>

the sale or exchange thereof]. [If the permanent global Security is
interest-bearing, insert--If a definitive Registered Security of this series is
issued in exchange for any portion of this permanent global Security after the
close of business at the office or agency where such exchange occurs on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of such Registered Security, but
will be payable on such Interest Payment Date or proposed date for payment, as
the case may be, only to the Holder hereof, and the Holder hereof will undertake
in such circumstances to credit such interest to the account of the Person who
was the beneficial owner of such portion of this permanent global Security on
such Regular Record Date or Special Record Date, as the case may be.]

         [If the permanent global Security is to be deposited with a Common
Depositary, insert--Payment of the principal of and any premium or interest on
this permanent global Security shall be made, subject to any laws or regulations
applicable thereto and to the right of the Company (limited as provided in the
Indenture) to rescind the designation of any such Paying Agent, at the [main]
offices of    in    ,    in    ,    in   ,in     and     in   , or at such other
office or agencies outside the United States of America (including the States
and the District of Columbia) and its possessions (including Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and Northern Mariana
Islands) (the "United States") as the Company may designate, at the option of
the Holder, by United States dollar check drawn on a bank in The City of New
York or by transfer of United States dollars to an account maintained by the
payee with a bank located outside the United States. [If the permanent global
Security is interest-bearing, insert--Interest on this permanent global Security
due on or before Maturity shall be payable only upon presentation at such an
office or agency of this permanent global Security.] To the extent necessary
under the taxation laws of the United States or any official application or
interpretation of the taxation laws of the United States for such payments to be
treated as having been made outside the United States, no such check shall be
mailed by any Paying Agent to any address in the United States and no transfer
of funds shall be made to an account maintained by the payee in the United
States [If the permanent global Security is denominated and payable in United
States dollars, insert--; provided, however, that payment of principal of [(and
premium, if any)] and [any] interest on this permanent global Security
(including any additional amounts which may be payable as provided below) shall
be made at the office of the Company's Paying Agent in the Borough of Manhattan,
The City of New York if (but only if) payment in United States dollars of the
full amount of such principal, [premium], interest or additional amounts, as the
case may be, at all offices or agencies outside the United States maintained for
the purpose by the Company in accordance with the Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions].]

         [If the permanent global Security is to be deposited with a U.S.
Depository, insert--Payment of the principal of [(and premium, if any)] and [If
applicable, insert--any such] interest on this permanent global Security will be
made at [the office or agency of the Company maintained for that purpose in
    , in such coin or currency of the United States

                                     F-7
<PAGE>

of America as at the time of payment is legal tender for payment of public and
private debts] [the option of the Holder (a) at [the Corporate Trust Office of
the Trustee] or such other office or agency of the Company as may be designated
by it for such 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
shall be legal tender for the payment of public and private debts or (b) subject
to any laws or regulations applicable thereto and to the right of the Company
(limited as provided in the Indenture) to rescind the designation of any such
Paying Agent, at the [main] offices of    in   ,   in   ,   in   ,   in     in
and    in    , or at such other offices or agencies as the Company may
designate, by [United States dollar] check drawn on, or transfer to a United
States dollar account maintained by the payee with, a bank in The City of New
York (so long as the applicable Paying Agent has received proper transfer
instructions in writing)] [If applicable, insert--; provided, however, that
payment of interest may be made at the option of the Company by [United States
dollar] check mailed to the addresses of the Persons entitled thereto as such
addresses shall appear in the Security Register] [or by transfer to a [United
States dollar] account maintained by the payee with, a bank in The City of New
York [so long as the applicable Paying Agent has received transfer instructions
in writing].]

         [If the permanent global Security is to be deposited with a Common
Depositary, insert--The Company will pay to any Holder of any Security of this
series [If the permanent global Security is interest-bearing, insert--or any
coupon appertaining thereto] who is a United States Alien (as defined below)
such additional amounts as may be necessary in order that [If the permanent
global Security is interest-bearing, insert--every net payment of the principal
of [(and premium, if any)] and interest on such Security] [If the permanent
global Security is not to bear interest prior to Maturity, insert--(i) the net
payment of principal of (and interest on overdue principal, if any, on) such
Security and (ii) the net proceeds from the sale or exchange of such Security to
the extent of the issue price plus accrued but unpaid original issue discount],
after deduction or withholding for or on account of any present or future tax,
assessment or other governmental charge imposed by the United States of America
or any political subdivision or taxing authority thereof or therein upon or as a
result of such payment [If the permanent global Security is not to bear interest
prior to Maturity, insert--or as a result of such sale or exchange], will not be
less than the amount provided for in such Security [If the permanent global
Security is interest-bearing, insert--or in such coupon] to be then due and
payable [If the permanent global Security is not to bear interest prior to
Maturity, insert--or, in the case of a sale or exchange, the amount of the net
proceeds from the sale or exchange before any such tax, assessment or other
governmental charge], provided, however, that the Company will not be required
to make any payment of additional amounts for or on account of:

                  (a) any tax, assessment or other governmental charge which
         would not have been imposed but for (i) the existence of any present or
         former connection between such Holder (or between a fiduciary, settlor,
         beneficiary, member or shareholder of, or possessor of a power over,
         such Holder, if such Holder is an estate, trust, partnership or
         corporation) and the United States of America, including, without
         limitation, such Holder (or such fiduciary, settlor, beneficiary,
         member, shareholder or possessor) being or having been a citizen or
         resident thereof or being or having been present or engaged in trade or
         business therein or having or having had a


                                      F-8
<PAGE>

permanent establishment therein or (ii) the presentation by the Holder of such
Security [If the permanent global Security is interest-bearing, insert--or any
coupon appertaining thereto] for payment on a date more than 10 days after the
date on which such payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later;

     (b)   any estate, inheritance, gift, sales, transfer, personal property tax
or similar tax, assessment or other governmental charge;

     (c)   any tax, assessment or other governmental charge imposed by reason of
such Holder's past or present status as a personal holding company or foreign
personal holding company with respect to the United States of America or as a
corporation which accumulates earnings to avoid United States federal income
tax;

     (d)   any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments of [If the permanent global Security
is interest-bearing, insert--principal of [(and premium, if any)] or interest
on, such Security] [If the permanent global Security is not to bear interest
prior to Maturity, insert--principal of [(and premium, if any)] or interest on
overdue principal, if any, on) such Security or from payments from the proceeds
of a sale or exchange of such Security];

     (e)   any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of principal of [(and premium, if
any)] or interest on, the Securities, if such payment can be made without such
withholding by any of the other Paying Agents in Western Europe;

     (f)   any tax, assessment or other governmental charge which would not have
been imposed but for the failure to comply with certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connections with the United States of America of the
Holder or beneficial owner of such Security [If the permanent global Security is
interest-bearing, insert--or any coupon appertaining thereto], if such
compliance is required by statute or by regulation of the United States Treasury
Department as a pre-condition to relief or exemption from such tax, assessment
or other governmental charge;

     (g)   any tax, assessment or other governmental charge imposed [If the
permanent global Security is interest-bearing, insert--on interest received by
(i) a 10% shareholder (as defined in Section 871(h)(3)(B) of the United States
Internal Revenue Code of 1986, as amended, and the regulations that may be
promulgated thereunder) of the Company or (ii) a controlled foreign corporation
within the meaning of the United States Internal Revenue Code of 1986, as
amended [If the permanent global Security is not to bear interest prior to
Maturity, insert--(i) by reason of such Holder's past or present status as a 10%
shareholder (as defined in Section 871(h)(3)(B) of the United States Internal
Revenue Code of 1986, as amended, and the regulations that may be promulgated
thereunder) of the Company or (ii) by reason of such Holder's past or present
status as a controlled foreign


                                      F-9
<PAGE>

     corporation within the meaning of the United States Internal Revenue Code
     of 1986, as amended]; or

          (h) any combination of items (a), (b), (c), (d), (e), (f) and (g); nor
     will additional amounts be paid with respect to any payment of [If the
     permanent global Security is interest-bearing, insert--principal of [(and
     premium, if any)] or interest on any such Security] [If the permanent
     global Security is not to bear interest prior to Maturity,
     insert--principal of (or interest on overdue principal, if any, on) such
     Security or of the proceeds of any sale or exchange of such Security] to
     any Holder which is a United States Alien who is a fiduciary or partnership
     or other than the sole beneficial owner of any such payment to the extent
     that a beneficiary or settlor with respect to such fiduciary, a member of
     such a partnership or the beneficial owner would not have been entitled to
     the additional amounts had such beneficiary, settlor, member or beneficial
     owner been the Holder of such Security [If the permanent global Security is
     interest-bearing, insert--or any coupon appertaining thereto]. Except as
     specifically provided in the Securities of this series (including this
     permanent global Security), the Company shall not be required to make any
     payment with respect to any tax, assessment or governmental charge imposed
     by any government or any political subdivision thereof or taxing authority
     therein. Whenever in this permanent global Security there is mentioned, in
     any context, the payment of the principal of [(or premium, if any)] or
     interest on, or in respect of, a Security [If the permanent global Security
     is interest-bearing, insert--or any coupon appertaining thereto], such
     mention shall be deemed to include mention of the payment of additional
     amounts provided for herein or therein to the extent that, in such context,
     additional amounts are, were or would be payable in respect thereof
     pursuant to the provisions hereof or thereof and express mention of the
     payment of additional amounts (if applicable) in any provisions hereof or
     thereof shall not be construed as excluding additional amounts in those
     provisions hereof where such express mention is not made. The term "United
     States Alien" means any Person who, for United States federal income tax
     purposes, is a foreign corporation, a non-resident alien individual, a
     non-resident alien fiduciary of a foreign estate or trust or a foreign
     partnership to the extent that one or more of the members of which is, for
     United States federal income tax purposes, a foreign corporation, a
     non-resident alien individual or a non-resident alien fiduciary of a
     foreign estate or trust.

     [If the permanent global Security is to be deposited with a Common
Depositary, insert--Notwithstanding the foregoing, if and so long as a
certification, information, documentation or other reporting requirement with
respect to any and all Securities of this series (including this permanent
global Security) referred to in the [fifth] paragraph on the reverse hereof
would be fully satisfied by payment of a withholding tax, backup withholding tax
or similar charge, the Company may elect to have the provisions of this
paragraph apply in lieu of the provisions of such paragraph, which election may
be stated in the Determination Notice (as defined in such [fifth] paragraph). In
such event, the Company will pay as additional amounts with respect to any
Security of this series (including this permanent global Security) that the
Company determines is subject to such requirement such amounts as may


                                      F-10
<PAGE>

be necessary so that every net payment made following the effective date of such
requirement outside the United States by the Company or any of its Paying Agents
of principal [(and premium, if any)] or [any] interest due in respect of any
Bearer Security of this series [If the permanent global Security is
interest-bearing, insert--or any coupon appertaining thereto] of which the
beneficial owner is a United States Alien (but without any requirement that the
nationality, residence or identity of such beneficial owner be disclosed to the
Company, any Paying Agent or any governmental authority), after deduction or
withholding for or on account of such withholding tax, backup withholding tax or
similar charge (other than a withholding tax, backup withholding tax or similar
charge which (a) would not be applicable to a payment made to a custodian,
nominee or other agent of the beneficial owner or which can be satisfied by such
a custodian, nominee or other agent certifying to the effect that such
beneficial owner is a United States Alien; provided, however, in each case that
payment by such custodian, nominee or agent to such beneficial owner is not
otherwise subject to any requirement referred to in this paragraph, (b) is
applicable only to payment by a custodian, nominee or other agent of the
beneficial owner to such beneficial owner, (c) would not be applicable to a
payment made by any other Paying Agent of the Company in Western Europe, or (d)
is imposed as a result of the presentation of such Bearer Security [If the
permanent global Security is interest-bearing, insert--or coupon] for payment on
a date more than 10 days after the date on which such payment becomes due and
payable or the date on which payment thereof is duly provided for, whichever
occurs later), will not be less than the amount provided for in such Bearer
Security [If the permanent global Security is interest-bearing, insert--or
coupon] to be then due and payable.]

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

         Unless the certificate of authentication hereon has been executed by or
on behalf of Chemical Bank, the Trustee under the Indenture, or its successors
thereunder, by the manual signature of one of its authorized officers, this
permanent global Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.


                                      F-11
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated: __________________                         UNIVERSAL CORPORATION

[Seal]
                                                  By: ______________________
                                                       Name:
                                                       Title:

Attest:


- -----------------------------
        Secretary

                                [Form of Reverse]

         [If the permanent global Security is to be deposited with a Common
Depositary; insert--The Securities of this series of which this permanent global
Security is a part are issuable as Bearer Securities, with interest coupons
attached, in the denomination of U.S.$    [, and as Registered Securities,
without coupons, in denominations of U.S.$   and any integral multiple thereof].
[As provided in the Indenture and subject to certain limitations therein set
forth, Bearer Securities and Registered Securities of this series of which this
permanent global Security is a part are exchangeable for a like aggregate
principal amount of Registered Securities of this series and of like tenor of
any authorized denominations, as requested by the Holder surrendering the same,
upon surrender of the Security or Securities to be exchanged, with all unmatured
coupons and all matured coupons in default thereto appertaining, at any office
or agency described below where Registered Securities of this series may be
presented for registration of transfer; provided, however, that Bearer
Securities surrendered in exchange for Registered Securities between a Regular
Record Date and the, relevant Interest Payment Date shall be surrendered without
the coupon relating to such Interest Payment Date. Registered Securities,
including Registered Securities received in exchange for Bearer Securities, may
not be exchanged for Bearer Securities.]]

         [If applicable, insert--The Securities of this series (including this
permanent global Security and the interests represented hereby) are subject to
redemption (1)] [If applicable, insert--on in any year commencing with the year
and ending with the year through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, and (2)] [If
applicable, insert--at any time [on or after , 19 ], as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount), if redeemed [on or before , %, and if
redeemed] during the 12-month period beginning of the years indicated:

                       Redemption                          Redemption
         Year             Price               Year            Price
         ----          ----------             ----         ----------



                                      F-12
<PAGE>

and thereafter at a Redemption Price equal to of the principal amount,] [and
(      )] under the circumstances described in the next [two] succeeding
paragraph[s] at a Redemption Price equal to [100% of the principal amount--or
insert applicable formula for determining the amount] [If the permanent global
Security is interest-bearing, insert--, together in the case of any such
redemption [If applicable, insert--(whether through operation of the sinking
fund or otherwise)] with accrued interest to the Redemption Date; provided,
however, that installments of interest on this permanent global Security whose
Stated Maturity is on or prior to such Redemption Date will be payable [If the
permanent global Security is to be deposited with a Common Depositary, insert--
only upon presentation of this permanent global Security (at an office or agency
located outside the United States, except as herein provided otherwise) [If the
permanent global Security is to be deposited with a U.S. Depository, insert--to
the Holder of this permanent global Security, or one or more Predecessor
Securities of record at the close of business on the relevant Regular Record
Dates referred to on the face hereof, all as provided in the Indenture]].

         [If applicable, insert--The Securities of this series (including this
permanent global Security and the interests represented hereby) are subject to
redemption (1) on       in any year commencing with the year     and ending with
the year        through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [on or after , 19 ], as a whole or in part, at the election
of the Company at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below, if redeemed during the 12-month period beginning
      of the years indicated:

              Redemption Price               Redemption Price
              For Redemption                 For Redemption Otherwise
              Through Operation              Than Through Operation
Year          Of The Sinking Fund            Of The Sinking Fund
- ----          -------------------            ------------------------







and thereafter at a Redemption Price equal to % of the principal amount, and (3)
under the circumstances described in the next [two] succeeding paragraph[s] at a
Redemption Price equal to [100% of the principal amount--or insert applicable
formula for determining the amount] [If the permanent global Security is
interest-bearing, insert--, together in the case of any such redemption (whether
through operation of the sinking fund or otherwise) with accrued interest to the
Redemption Date; provided, however, that installments of interest on this
permanent global Security whose Stated Maturity is on or prior to such
Redemption Date will be payable [If the permanent global Security is to be
deposited with a Common Depositary, insert--only upon presentation of this
permanent global Security (at an office or agency located outside the United
States, except as herein provided otherwise)


                                      F-13
<PAGE>

[If the permanent global Security is to be deposited with a U.S. Depository,
insert--to the Holder of this permanent global Security, or one or more
Predecessor Securities of record at the close of business on the relevant
Regular Record Dates referred to on the face hereof, all as provided in the
Indenture]].] [Notwithstanding the foregoing, the Company may not, prior to
redeem the Securities of this series (including this permanent global Security
and the interests represented hereby) as contemplated by Clause [(2)] above as a
part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than    % per annum.]

         [If the permanent global Security is to be deposited with a Common
Depositary, insert--The Securities of this series (including this permanent
global Security and the interests represented hereby) may be redeemed, as a
whole but not in part, at the option of the Company, at a Redemption Price
determined as set forth in the preceding paragraph [If the permanent global
Security is interest bearing, insert--, together with interest accrued to the
date fixed for redemption,] if, as a result of any amendment to, or change in,
the laws (or any regulations or rulings promulgated thereunder) of the United
States of-America or any political subdivision or taxing authority thereof or
therein affecting taxation, or any amendment to or change in an official
position regarding the application or interpretation of such laws, regulations
or rulings, which amendment or change is effective on or after          19 , the
Company will become obligated to pay additional amounts (as described on the
face thereof or hereof) [If the permanent global Security is interest-bearing,
insert--on the next succeeding Interest Payment Date) [If the permanent global
Security is not to bear interest prior to Maturity, insert--at Maturity or upon
the sale or exchange of any Security), provided that such obligation to pay
additional amounts cannot be avoided by the use of reasonable measures available
to the Company; provided, however, that in the opinion of the Company, which
opinion shall be rendered in good faith, such measures need not be used if they
have or will have a material adverse impact on the conduct of its business;
provided further, however, that (a) no notice of such redemption may be given
earlier than 90 days prior to the earliest date on which the Company would be
obligated to pay such additional amounts [If the permanent global Security is
interest-bearing, insert--were a payment in respect of the Securities of this
series (including this permanent global Security and the interests represented
hereby) then due] [If the permanent global Security is not to bear interest
prior to Maturity, insert--were a payment in respect of the Securities of this
series (including this permanent global Security and the interests represented
hereby) then due or a sale or exchange of a Security of this series then made],
and (b) at the time such notice is given, such obligation to pay such additional
amounts remains in effect. Immediately prior to the giving of any notice of
redemption as provided in this paragraph, the Company shall deliver to the
Trustee a certificate stating that the Company is entitled to effect such
redemption and setting forth a statement of facts showing that the conditions
precedent to the right of the Company so to redeem have occurred and an opinion
of McGuire, Woods, Battle & Boothe to such effect based on such statement of
facts.]



                                      F-14
<PAGE>

         [If the permanent global Security is to be deposited with a Common
Depositary and if applicable*, insert--In addition, if the Company determines
that any payment made outside the United States by the Company or any of its
Paying Agents of the full amount of principal [, premium, if any, ] or interest
due with respect to any Bearer Security of the series of which this permanent
global Security is a part or any related coupon would, under any present or
future laws or regulations of the United States of America affecting taxation or
otherwise, be subject to any certification, information, documentation or other
reporting requirement of any kind, the effect of which requirement is the
disclosure to the Company, any Paying Agent or any governmental authority of the
nationality, residence or identity of a beneficial owner of such Bearer Security
or coupon who is a United States Alien (as defined on the face hereof) (other
than such a requirement (a) which would not be applicable to a payment made by
the Company or any one of its Paying Agents (i) directly to the beneficial owner
or (ii) to any custodian, nominee or other agent of the beneficial owner, or (b)
which can be satisfied by the custodian, nominee or other agent certifying that
the beneficial owner is a United States Alien, provided in each case referred to
in clauses (a)(ii) and (b) that payment by such custodian, nominee or other
agent of such beneficial owner is not otherwise subject to any such requirement
or (c) would not be applicable to a payment made to any other Paying Agent in
Western Europe), the Company at its election will either (x) redeem the
Securities of this series (including this permanent global Security and the
interests represented hereby), as a whole but not in part, at a Redemption Price
determined as set forth in the next preceding paragraph, together with interest
accrued to the date fixed for redemption, or (y) if and so long as the
conditions of the [ninth] [tenth] paragraph on the face of this permanent global
Security are satisfied, pay the additional amounts specified in such paragraph.
The Company will make such determination and election and notify the Trustee
thereof as soon as practicable, and the Trustee will promptly give notice of
such determination in the manner provided below (the "Determination Notice"), in
each case stating the effective date of such certification, information,
documentation or other reporting requirement, whether the Company will redeem
the Securities (including this permanent global Security and the interests
represented hereby) or will pay the additional amounts specified in such
paragraph and (if applicable) the last date by which the redemption of the
Securities (including this permanent global Security and the interests
represented hereby) must take place. If the Company elects to redeem the
Securities (including this permanent global Security and the interests
represented hereby) such redemption shall take place on such date, not later
than one year after publication of the Determination Notice, as the Company
elects by notice to the Trustee at least 75 days before such date, unless
shorter notice is acceptable to the Trustee. Upon receipt of notice from the
Company as to the date of redemption, the Trustee will cause notice thereof to
be duly published in the manner provided below. Notwithstanding the foregoing,
the Company will not so redeem the Securities (including this permanent global
Security and the interests represented hereby) if the Company subsequently
determines, not less than 30 days prior to the date fixed for redemption, that
subsequent payments on the Securities (including this permanent global Security
and the interests represented hereby) would not be subject to any such
requirement, in which case



- -------------------
*    Generally this provision will only be applicable if the Securities of the
     series are interest-bearing and generally only if the Securities bear
     interest at a fixed rate.


                                      F-15
<PAGE>

the Company will promptly notify the Trustee, which will promptly give notice of
that determination in the manner provided below, and any earlier redemption
notice will thereupon be revoked and of no further effect. If the Company elects
as provided in clause (y) above to pay additional amounts, and as long as the
Company is obligated to pay such additional amounts, the Company may
subsequently redeem the Securities (including this permanent global Security and
the interests represented hereby), at any time, as a whole but not in part, at a
Redemption Price determined as set forth in the next preceding paragraph,
together with interest accrued to the date fixed for redemption, including any
additional amounts required to be paid but without reduction for applicable
United States of America withholding taxes.]

         [If the permanent global Security is to be deposited with a Common
Depositary and if applicable*, insert--In addition, if the Company determines
that any payment made outside the United States by the Company or any of its
Paying Agents of the full amount due with respect to any Bearer Security of the
series of which this permanent global Security is a part would, under any
present or future laws or regulations of the United States of America affecting
taxation or otherwise, be subject to any certification, information,
documentation, or other reporting requirement of any kind, the effect of which
requirement is the disclosure to the Company, any Paying Agent or any
governmental -authority of the nationality, residence or identity of a
beneficial owner of such Bearer Security who is a United States Alien (as
defined on the face hereof) (other than such a requirement (a) which would not
be applicable to a payment made by the Company or any one of its Paying Agents
(i) directly to the beneficial owner or (ii) to any custodian, nominee or other
agent of the beneficial owner, or (b) which can be satisfied by the custodian,
nominee or other agent certifying that such beneficial owner is a United States
Alien, provided in each case referred to in clauses (a)(ii) and (b) that payment
by such custodian, nominee or other agent of such beneficial owner is not
otherwise subject to any such requirement or (c) would not be applicable to a
payment made to any other Paying Agent in Western Europe), the Company at its
election will either (x) permit any Holder of a Security to present such
Security for redemption within 90 days of notice of such redemption, at a
Redemption Price determined as set forth in the next preceding paragraph,
provided that if any such Holder fails to present its Security for redemption,
such Holder will not be entitled to any additional amounts, or (y) if and so
long as the conditions of the [ninth] [tenth] paragraph on the face of this
permanent global Security are satisfied, pay the additional amounts specified in
such paragraph. The Company will make such determination and election and notify
the Trustee thereof as soon as practicable, and the Trustee will promptly give
notice of such determination in the manner provided below (the "Determination
Notice"), in each case stating the effective date of such certification,
information, documentation or other reporting requirement, whether the Company
has elected to permit redemption of the Securities (including this permanent
global Security and the interests represented hereby) or to pay the additional
amounts specified in such paragraph and (if applicable) the last day by which
the Company may publish any notice of redemption. If the Company elects to
permit redemption of the Securities (including this


- -------------------
*    Generally this provision will only be applicable if the Securities of the
     series are not to bear interest prior to Maturity.


                                     F-16
<PAGE>

permanent global Security and the interests represented hereby), notice of the
redemption will be given not more than 268 days following the Determination
Notice and will specify the date fixed for redemption. The Securities (including
this permanent global Security and the interests represented hereby) will be
redeemed on the day 97 days after notice of the redemption has been given.
Notwithstanding the foregoing, the Company will not permit redemption of the
Securities (including this permanent global Security and the interests
represented hereby) if the Company subsequently determines, not less than 30
days prior to the date fixed for redemption, that subsequent payments would not
be subject to any such requirement, in which case the Company will promptly
notify the Trustee, which will promptly give notice of that determination in the
manner described below, and any earlier redemption notice will thereupon be
revoked and of no further effect.]

         [If the permanent global Security is to be deposited with a Common
Depositary, insert--With respect to any redemption made pursuant to the terms of
this Security, no payment in respect of the portion of the Redemption Price
which represents accrued interest thereon or amounts received in respect of
original issue discount shall be made at any office or agency of the Company in
the United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States.]

         [The sinking fund for this series provides for the redemption on in
each year, beginning with the year and ending with the year , of [not less than]
U.S.$     [("mandatory sinking fund") and not more than U.S.$ ] aggregate
principal amount of Securities of this series (including this permanent global
Security and the interests represented hereby). [Securities of this series
(including this permanent global Security and the interests represented hereby)
acquired or redeemed by the Company otherwise than through [mandatory] sinking
fund payments may be credited against subsequent [mandatory] sinking fund
payments otherwise required to be made--[in the inverse order in which they
become due.]]

         [[Except as otherwise provided herein,] the Securities of this series
(including this permanent global Security and the interests represented hereby)
are not subject to any sinking fund and are not subject to redemption at the
option of the Company prior to maturity.]

         The provisions of Article Fourteen of the Indenture [do not] apply to
Securities of this series.

         [If the permanent global Security is to be deposited with a Common
Depositary, insert--Notice of redemption will be given by publication in an
Authorized Newspaper in The City of New York and, if the Securities of this
series are then listed on [The International Stock Exchange of the United
Kingdom and the Republic of Ireland Limited] [the Luxembourg Stock Exchange]
[or] any [other] stock exchange located outside the United States and such stock
exchange shall so require, in [London] [Luxembourg] [or] in any [other] required
city outside the United States or, if not practicable, elsewhere in Europe, [and
by mail to Holders of Registered Securities], not less than 30 nor more than 60
days prior to the date fixed for redemption, all as provided in the Indenture.]


                                      F-17
<PAGE>

         [If the permanent global Security is to be deposited with a U.S.
Depository, insert--Notice of redemption will be given by mail to Holders of
Securities, not less than 30 nor more than 60 days prior to the date fixed for
redemption, all as provided in the Indenture.]

         If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series
(including this permanent global Security and the interests represented hereby)
may be declared due and payable in the manner and with the effect provided in
the Indenture. [If the permanent global Security is not to bear interest prior
to Maturity, insert--Such amount shall be equal to [Insert formula for
determining the amount.] Upon payment (i) of the amount of principal so declared
due and payable and (ii) of interest on any overdue principal and overdue
interest (in each case to the extent that the payment of such interest shall be
legally enforceable), all of the Company's obligations in respect of the payment
of the principal of and [any] interest on the Securities of this series
(including this permanent global Security and the interests represented hereby)
shall terminate.]

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected [If the permanent global Security is interest-bearing, insert--and any
related coupons] under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Securities at the time Outstanding of each series and affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of each series at
the time Outstanding on behalf of the Holders of all Securities of such series
[If the permanent global Security is to be deposited with a Common Depositary
and the Securities of the Series is interest bearing, insert--and any related
coupons] 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 permanent global Security shall
be conclusive and binding upon such Holder and upon all future Holders of this
permanent global Security and the Persons who are beneficial owners of interests
represented hereby, and of any Security issued in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this
permanent global Security.

         As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series [If the permanent global Security is
deposited with a Common Depositary and the permanent global Security is
interest-bearing, insert--or any related coupon] will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to this series, the
Holders of not less than 25% in principal amount of the Outstanding Securities
of this series shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, and the
Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Securities of this series a direction


                                      F-18
<PAGE>

inconsistent with such request and shall have failed to institute such
proceeding within 60 days; provided, however, that such limitations do not apply
to a suit instituted by the Holder hereof for the enforcement of payment of the
principal of [(and premium, if any)] or [any] interest on this permanent global
Security on or after the respective due dates expressed herein.

         No reference herein to the Indenture and no provision of this permanent
global Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of [(and
premium, if any)] and [any] interest [If the permanent global Security is to be
deposited with a Common Depositary, insert--[including additional amounts, as
described on the face hereof)] on this permanent global Security at the times,
places and rate, and in the coin or currency, herein prescribed.

         [If the permanent global Security is to be deposited with a Common
Depositary, insert--Title to [Bearer] Securities of the series of which this
permanent global Security is a part and coupons shall pass by delivery. (As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of Registered Securities of the series of which this permanent
global Security is a part may be registered in the Security Register of the
Company, upon surrender of a Registered Security for registration of transfer at
the [Corporate Trust Office of the Trustee or such other office or agency of the
Company as may be designated by it in the Borough of Manhattan, the City of New
York, or, subject to any laws or regulations applicable thereto and to the right
of the Company (limited as provided in the Indenture) to rescind the designation
of any such transfer agent, at the [main] offices of in and in or at such other
offices or agencies as the Company may designate, 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 thereof or his
attorney duly authorized in writing, and thereupon one or more new Registered
Securities of this series and of like tenor, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees.]]

         [If the permanent global Security is to be deposited with a U.S.
Depository, insert--As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of Registered Securities of the
series of which this permanent global Security is a part may be registered on
the Security Register of the Company, upon surrender of such Securities for
registration of transfer at the office or agency of the Company in [any place
where the principal of [(and premium, if any)] and [any] interest of such
Securities are payable] [the Borough of Manhattan, the City of New York, or,
subject to any laws or regulations applicable thereto and to the right of the
Company (limited as provided in the Indenture) to rescind the designation of any
such transfer agent, at the [main] offices of    in    and   in      or at such
other offices or agencies as the Company may designate], 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 thereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.]


                                      F-19
<PAGE>

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

         [If the permanent global Security is to be deposited with a Common
Depositary, insert--The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of a Bearer Security of any series and any coupon
appertaining thereto [, and prior to due presentment of a Registered Security
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Security is
registered,] as the owner thereof for all purposes, whether or not such Security
or such coupon be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.]

         [If the permanent global Security is to be deposited with a U.S.
Depository, insert--Prior to due presentment of a Registered Security (including
this permanent global Security) for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name such Security is registered as the owner thereof for all purposes,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.]

         [If the permanent global Security is to be deposited with a U.S.
Depository, insert--The Securities of this series of which this permanent global
Security is a part are issuable only in registered form without coupons, in
denominations of $ and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
of this series are exchangeable for a like aggregate principal amount of
Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.)]

         Each Security of this series (including this permanent global Security)
shall be dated the date of [If the permanent global Security is to be deposited
with a U.S. Depository or in the case of Registered Securities of a series to be
offered pursuant to a Periodic Offering, insert - its authentication] [In the
case of Bearer Securities of a series other than a series to be offered pursuant
to a Periodic Offering, insert--the original issuance of the first Security of
such series to be issued] [In the case of Bearer Securities of a series to be
offered pursuant to a Periodic Offering, insert--the related Predecessor
Security; if there is no such Predecessor Security, insert -- its
authentication].

         [If the permanent global Security is to be deposited with a Common
Depositary, insert--The Indenture, the Securities (including this permanent
global Security) and any coupons appertaining thereto shall be governed by and
construed in accordance with the laws of the State of New York.]

         All terms used in this permanent global Security which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.


                                      F-20
<PAGE>

                                   SCHEDULE A
                              SCHEDULE OF EXCHANGES







                                      F-21
<PAGE>

                                    EXHIBIT G
                            [Forms of Certification]

                                   EXHIBIT G.1
                       [FORM OF CERTIFICATE TO BE GIVEN BY
                 PERSON ENTITLED TO RECEIVE (1) BEARER SECURITY,
      (2) SECURITY INITIALLY REPRESENTED BY A TEMPORARY GLOBAL SECURITY OR
                  (3) INTEREST ON A TEMPORARY GLOBAL SECURITY]
                                   CERTIFICATE

                              UNIVERSAL CORPORATION

                     [Insert title or sufficient description
                                 of Securities]



         This is to certify that as of the date hereof and except as provided in
the fourth paragraph hereof, the above-captioned Securities held by you for our
account (i) are owned by a person that is not a citizen or a resident of the
United States, a domestic partnership, a domestic corporation or any estate or
trust the income of which is subject to United States Federal income taxation
regardless of its source (a "United States person"), (ii) are owned by a United
States person that is (A) the foreign branch of a United States financial
institution (as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v)) (a "financial institution") purchasing for its own account or
for resale, or (B) a United States person who acquired the Securities through
the foreign branch of a United States financial institution and who holds the
Securities through such financial institution on the date hereof (and in the
case of either clause (A) or (B), the financial institution hereby agrees for
the benefit of the Company to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) are owned by a financial
institution for purposes of resale during the restricted period (as defined in
United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)). In addition,
financial institutions described in clause (iii) of the preceding sentence
(whether or not also described in clause (i) or (ii)) certify that they have not
acquired the Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its possessions.

         As used in this certificate, "United States" means the United States of
America (including the States and the District of Columbia); and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island and the Northern Mariana Islands.

         We undertake to advise you by telex if the above statement as to
beneficial ownership is not correct on [Insert the Exchange Date] as to all of
the above-captioned Securities then appearing in your books as being held for
our account.

         This certificate excepts and does not relate to U.S. $__________
principal amount of the above-captioned Securities appearing on your books as
being held for our account
<PAGE>

as to which we are not yet able to certify and as to which we understand that
exchange and delivery of definitive Securities cannot be made until we are able
so to certify.

         We understand that this certificate is required in connection with
certain tax regulations in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy hereof to any interested party in such proceedings.

Dated:_______________, 19__*
        *to be dated on or after
        _____________ 19__
        [the 15th day before the
        certification date].


                                           [Name of Account Holder]



                                            ------------------------
                                            (Authorized Signatory)

                                            Name:
                                            Title:


                                      G-2
<PAGE>

                                   EXHIBIT G.2
           [FORM OF CERTIFICATE TO BE GIVEN BY THE EURO-CLEAR OPERATOR
           AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF A PORTION
              OF A TEMPORARY GLOBAL SECURITY OR TO OBTAIN INTEREST]

                                   CERTIFICATE

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

                     (Insert title or sufficient description
                         of Securities to be delivered)

         This is to certify that, based on certificates we have received from
our member organizations substantially in the form set out in Exhibit G-1 of the
Indenture relating to the above-captioned Securities, as of the date hereof,
U.S. $____________ principal amount of the above-captioned Securities acquired
from you (i) are owned by a person that is not a citizen or resident of the
United States, a domestic partnership, a domestic corporation or any estate or
trust the income of which is subject to United Stated federal income taxation
regardless of its source (a "United States person"), (ii) are owned by a United
States person that is (a) the foreign branch of a United States financial
institution (as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v)) (a "financial institution") purchasing for its own account or
for resale, or (b) a United States person who acquired the Securities through
the foreign branch of a United States financial institution and who holds the
Securities through such financial institution on the date hereof (and in the
case of either clause (a) or (b), the financial institution has agreed for your
benefit to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the United States Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) are owned by a financial institution for purposes of
resale during the restricted period (as defined in United States Treasury
Regulations Section 1.163-5 (c)(2)(i)(D)(7)). Financial institutions described
in clause (iii) of the preceding sentence (whether or not also described in
clause (i) or (ii)) have certified that they have not acquired the Securities
for purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.

         As used in this certificate, "United States" means the United States of
America (including the States and the District of Columbia); and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island and the Northern Mariana Islands.

         We further certify that, as of the date hereof, we have not received
any notification from any of our member organizations to the effect that the
statements made by such member organizations with respect to any portion of the
part submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof.

         We understand that this certificate is required in connection with
certain tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant,


                                      G-3
<PAGE>

     we irrevocably authorize you to produce this certificate to any interested
party in such proceedings.

Dated:_______________, 19__*
        *To be dated no
        earlier than the
        Exchange Date.


                                             [MORGAN GUARANTY TRUST
                                             COMPANY OF NEW YORK, BRUSSELS
                                             OFFICE, AS THE OPERATOR OF THE
                                             EUROCLEAR CLEARANCE SYSTEM]

                                             [CENTRALE DE LIVRAISON DE VALEURS
                                             MOBILIERES S.A.]


                                             By ___________________________


                                      G-4
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>OPINION SULLIVAN & CROMWELL -- DEBT SECURITIES
<TEXT>

<PAGE>

                                                                     Exhibit 5.1



                       [LETTERHEAD OF SULLIVAN & CROMWELL]





                                                                 August 11, 2000

Universal Corporation,
   1501 Hamilton Street,
      Richmond, Virginia  23230.

Dear Sirs:

                  In connection with the registration under the Securities Act
of 1933 (the "Act") of $400,000,000 principal amount of debt securities (the
"Securities") of Universal Corporation, a Virginia corporation (the "Company"),
we, as your special counsel, have examined such corporate records, certificates
and other documents, and such questions of law, as we have considered necessary
or appropriate for the purposes of this opinion.

                  Upon the basis of such examination, we advise you that, in our
opinion, when the Registration Statement has become effective under the Act, the
terms of the Securities and of their issuance and sale have been duly
established in conformity with the Indenture relating to the Securities so as
not to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or governmental body having
<PAGE>

Universal Corporation                                                        -2-


jurisdiction over the Company, and the Securities have been duly executed and
authenticated in accordance with the Indenture and issued and sold as
contemplated in the Registration Statement, the Securities will constitute valid
and legally binding obligations of the Company, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.

                  We note that, as of the date of this opinion, a judgment for
money in an action based on a Security denominated in a foreign currency or
currency unit in a Federal or state court in the United States ordinarily would
be enforced in the United States only in United States dollars. The date used to
determine the rate of conversion of the foreign currency or currency unit in
which a particular Security is denominated into United States dollars will
depend upon various factors, including which court renders the judgment. In the
case of a security denominated in a foreign currency, a state court in the State
of New York rendering a judgment on such Security would be required under
Section 27 of the New York Judiciary Law to render such judgment in the foreign
currency in which
<PAGE>

Universal Corporation                                                        -3-


the Security is denominated, and such judgment would be converted into United
States dollars at the exchange rate prevailing on the date of entry of the
judgment.

                  The foregoing opinion is limited to the Federal laws of the
United States, the laws of the State of New York and the laws of the
Commonwealth of Virginia and we are expressing no opinion as to the effect of
the laws of any other jurisdiction. With respect to all matters of Virginia law,
we have relied upon the opinion, dated August 11, 2000 of George C. Freeman,
III, Esq., Assistant Secretary of the Company, and our opinion is subject to the
same assumptions, qualifications and limitations with respect to such matters as
are contained in such opinion of George C. Freeman, III, Esq.

                  Also, we have relied as to certain matters on information
obtained from public officials, officers of the Company and other sources
believed by us to be responsible, and we have assumed that the Indenture has
been duly authorized, executed and delivered by the Trustee thereunder, an
assumption which we have not independently verified.
<PAGE>

Universal Corporation                                                        -4-


                  We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the references to us under the heading
"Validity of the Securities" in the Prospectus. In giving such consent, we do
not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.

                                                    Very truly yours,

                                                    /s/ Sullivan & Cromwell
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.2
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>OPINION OF GEORGE C. FREEMAN -- DEBT SECURITIES
<TEXT>

<PAGE>

                                                                     Exhibit 5.2


                      [Letterhead of Universal Corporation]





                                                                 August 11, 2000


Universal Corporation
1501 N. Hamilton Street
Richmond, Virginia  23230


Dear Sirs:

          In connection with the registration under the Securities Act of 1933
(the "Act") of $400,000,000 principal amount of debt securities (the
"Securities") of Universal Corporation, a Virginia Corporation (the "Company"),
on Form S-3 (the "Registration Statement"), I, as Assistant Secretary of the
Company, have examined such corporate records, certificates and other documents,
and such questions of law as I have considered necessary or appropriate for the
purposes of this opinion. Upon the basis of such examination, I am of the
opinion that:

          (1) the Company has been duly incorporated and is validly
          existing as a corporation in good standing under the laws of the
          Commonwealth of Virginia, with full corporate power and authority to
          issue and sell the Securities as contemplated in the Registration
          Statement;

          (2) the Indenture, dated as of February 1, 1991 between the
          Company and The Chase Manhattan Bank (formerly known as Chemical Bank)
          (the
<PAGE>

Universal Corporation                                                        -2-


          "Indenture"), has been duly authorized, executed and delivered by
          the Company and duly qualified under the Trust Indenture Act of 1939;
          and

          (3) when the Registration Statement has become effective under
          the Act, the terms of the Securities and their issuance and sale have
          been duly established in conformity with the Indenture relating to the
          Securities so as not to violate any applicable law or result in a
          default under or breach of any agreement or instrument binding upon
          the Company and so as to comply with any requirement or restriction
          imposed by any court or governmental body having jurisdiction over the
          Company, and the Securities have been duly executed and authenticated
          in accordance with the Indenture and issued and sold as contemplated
          in the Registration Statement, the Securities will constitute valid
          and legally binding obligations of the Company, subject to bankruptcy,
          insolvency, fraudulent transfer, reorganization, moratorium and
          similar laws of general applicability relating to or affecting
          creditors' rights and to general equity principles.

          The foregoing opinion is limited to the laws of the Commonwealth of
Virginia, and I am expressing no opinion as to the effect of the laws of any
other jurisdiction.

          I have relied as to certain matters on information obtained from
public officials, officers of the Company and other sources believed by me to be
responsible, and I have assumed that the Indenture has been duly authorized,
executed and delivered by the Trustee thereunder, an assumption which I have not
independently verified.
<PAGE>

Universal Corporation                                                        -3-


          I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Validity of
the Securities" in the Prospectus.

                                                   Very truly yours,


                                                   /s/ George C. Freeman, III
                                                   --------------------------
                                                   George C. Freeman, III
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8
<SEQUENCE>6
<FILENAME>0006.txt
<DESCRIPTION>OPINION OF SULLIVAN & CROMWELL -- TAX
<TEXT>

<PAGE>

                                                                 Exhibit 8



                                                                 August 11, 2000



Universal Corporation,
      1501 N. Hamilton Street,
           Richmond, Virginia 23230.



Dear Sirs:

                  We have acted as your special counsel in connection with the
registration under the Securities Act of 1933 (the "Act") of $400,000,000 (or
the equivalent thereof in another currency or composite currency) aggregate
amount of debt securities of Universal Corporation (the "Company"). We hereby
confirm to you that our opinion is as set forth under the caption "United States
Taxation" in the prospectus (the "Prospectus") included in the related
Registration Statement on Form S-3 dated August 11, 2000 filed by the
<PAGE>

Universal Corporation                                                       -2-


Company with the Securities and Exchange Commission (the "Registration
Statement").

                  We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to us under the heading
"United States Taxation" in the Prospectus. In giving such consent, we do not
admit that we are in the category of persons whose consent is required under
Section 7 of the Act.

                                                Very truly yours,

                                                /s/ Sullivan & Cromwell
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>7
<FILENAME>0007.txt
<DESCRIPTION>CONSENT OF ERNST & YOUNG
<TEXT>

<PAGE>

                                                                    EXHIBIT 23.1


                         Consent of Independent Auditors

We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Universal
Corporation for the registration of $400,000,000 of debt securities and to the
incorporation by reference therein of our report dated August 5, 1999, with
respect to the consolidated financial statements of Universal Corporation
included in its Annual Report (Form 10-K) for the year ended June 30, 1999,
filed with the Securities and Exchange Commission.

                                                        /s/ Ernst & Young LLP


Richmond, Virginia
August 8, 2000
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25
<SEQUENCE>8
<FILENAME>0008.txt
<DESCRIPTION>FORM T-1 STATEMENT
<TEXT>

<PAGE>

                                                                      Exhibit 25

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

                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C.  20549
                           _________________________

                                   FORM  T-1

                            STATEMENT OF ELIGIBILITY
                    UNDER THE TRUST INDENTURE ACT OF 1939 OF
                   A CORPORATION DESIGNATED TO ACT AS TRUSTEE
                  ___________________________________________
              CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
                A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
                    ________________________________________

                            THE CHASE MANHATTAN BANK
              (Exact name of trustee as specified in its charter)


New York                                                              13-4994650
(State of incorporation                                         (I.R.S. employer
if not a national bank)                                      identification No.)

270 Park Avenue
New York, New York                                                         10017
(Address of principal executive offices)                              (Zip Code)

                              William H. McDavid
                                General Counsel
                                270 Park Avenue
                           New York, New York 10017
                              Tel: (212) 270-2611
           (Name, address and telephone number of agent for service)
                 ____________________________________________
                             Universal Corporation
              (Exact name of obligor as specified in its charter)

Virginia                                                              54-0414210
(State or other jurisdiction of                                 (I.R.S. employer
incorporation or organization)                               identification No.)

1501 N. Hamilton Street
Richmond, Virginia                                                          2320
(Address of principal executive offices)                              (Zip Code)

                 ____________________________________________
                                Debt Securities
                      (Title of the indenture securities)

               ------------------------------------------------
<PAGE>

                                    GENERAL

Item 1. General Information.

        Furnish the following information as to the trustee:

        (a) Name and address of each examining or supervising authority to which
it is subject.

            New York State Banking Department, State House, Albany, New York
            12110.

            Board of Governors of the Federal Reserve System, Washington, D.C.,
            20551

            Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
            New York, N.Y.

            Federal Deposit Insurance Corporation, Washington, D.C., 20429.

        (b) Whether it is authorized to exercise corporate trust powers.

            Yes.

Item 2. Affiliations with the Obligor.

        If the obligor is an affiliate of the trustee, describe each such
affiliation.

        None.

<PAGE>

Item 16.  List of Exhibits

          List below all exhibits filed as a part of this Statement of
Eligibility.

          1.  A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).

          2.  A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference.  On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).

          3.  None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.

          4.  A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).

          5.  Not applicable.

          6.  The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).

          7.  A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.

          8.  Not applicable.

          9.  Not applicable.

                                   SIGNATURE

      Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26/th/ day of July 2000.

                                    THE CHASE MANHATTAN BANK

                                    By  /s/ P. Morabito
                                       ---------------------------
                                       P. Morabito
                                       Vice President

                                      -3-
<PAGE>

                             Exhibit 7 to Form T-1

                               Bank Call Notice

                            RESERVE DISTRICT NO. 2
                      CONSOLIDATED REPORT OF CONDITION OF

                           The Chase Manhattan Bank
                 of 270 Park Avenue, New York, New York 10017
                    and Foreign and Domestic Subsidiaries,
                    a member of the Federal Reserve System,

                  at the close of business March 31, 2000, in
        accordance with a call made by the Federal Reserve Bank of this
        District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
                                                                 Dollar Amounts
                 ASSETS                                            in Millions
<S>                                                               <C>
Cash and balances due from depository institutions:
  Noninterest-bearing balances and
  currency and coin...........................................       $ 13,460
  Interest-bearing balances...................................          3,696
Securities:...................................................
Held to maturity securities...................................            671
Available for sale securities.................................         56,085
Federal funds sold and securities purchased under
  agreements to resell........................................         31,833
Loans and lease financing receivables:
  Loans and leases, net of unearned income           $132,562
  Less: Allowance for loan and lease losses             2,188
  Less: Allocated transfer risk reserve....                 0
                                                     --------
  Loans and leases, net of unearned income,
  allowance, and reserve......................................        130,374
Trading Assets................................................         50,488
Premises and fixed assets (including capitalized
  leases).....................................................          3,391
Other real estate owned.......................................             32
Investments in unconsolidated subsidiaries and
  associated companies........................................            231
Customers' liability to this bank on acceptances
  outstanding.................................................            630
Intangible assets.............................................          3,891
Other assets..................................................         17,423
                                                                     --------
TOTAL ASSETS..................................................       $312,205
                                                                     ========
</TABLE>
                                      -4-
<PAGE>



<TABLE>
<S>                                                                                 <C>
                                  LIABILITIES
Deposits
  In domestic offices.........................................................      $103,709
  Noninterest-bearing................................................  $41,611
  Interest-bearing...................................................   62,098
  In foreign offices, Edge and Agreement subsidiaries and IBF's...............        80,379
Noninterest-bearing..................................................  $ 4,920
  Interest-bearing...................................................   75,459

Federal funds purchased and securities sold under agreements to repurchase....        54,265
Demand notes issued to the U.S. Treasury......................................           529
Trading liabilities...........................................................        31,970
Other borrowed money (includes mortgage indebtedness and obligations under
  capitalized leases):
  With a remaining maturity of one year or less...............................         4,764
  With a remaining maturity of more than one year through three years.........             0
  With a remaining maturity of more than three years..........................            99
Bank's liability on acceptances executed and outstanding......................           630
Subordinated notes and debentures.............................................         5,430
Other liabilities.............................................................        11,663

TOTAL LIABILITIES.............................................................       293,438

                                 EQUITY CAPITAL

Perpetual preferred stock and related surplus.................................             0
Common stock..................................................................         1,211
Surplus (exclude all surplus related to preferred stock)......................        11,066
Undivided profits and capital reserves........................................         7,698
Net unrealized holding gains (losses)
on available-for-sale securities..............................................        (1,224)
Accumulated net gains (losses) on cash flow hedges............................             0
Cumulative foreign currency translation adjustments...........................            16
TOTAL EQUITY CAPITAL..........................................................        18,767
                                                                                    --------
TOTAL LIABILITIES AND EQUITY CAPITAL..........................................      $312,205
                                                                                    ========
</TABLE>

I, Joseph L. Sclafani, E.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the
appropriate Federal regulatory authority and is true to the best
of my knowledge and belief.

                           JOSEPH L. SCLAFANI

We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us,
and to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the appropriate
Federal regulatory authority and is true and correct.

                      WILLIAM B. HARRISON, JR. )
                      HAROLD S. HOOK           )DIRECTORS
                      MARINA v.N. WHITMAN      )

                                      -5-
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
