ILLINOIS POWER COMPANY,
                             Issuer
                                
                               AND
                                
                    WILMINGTON TRUST COMPANY,
                             Trustee
                                
                                
                            INDENTURE
                                
                   Dated as of January 1, 1996
                                
                  Subordinated Debt Securities
                                
                                
                                




                           TABLE OF CONTENTS

                               ARTICLE I
                              DEFINITIONS
  
SECTION 1.01.  Definitions of Terms.                                      1

                                ARTICLE II
              ISSUE, DESCRIPTION, TERMS, EXECUTION,
          REGISTRATION AND EXCHANGE OF DEBT SECURITIES
  
SECTION 2.01.  Designation and Terms of Debt Securities.                  6
SECTION 2.02.  Form of Debt Securities and Trustee's Certificate.         8
SECTION 2.03.  Denominations; Provisions for Payment.                     9
SECTION 2.04.  Execution and Authentication.                             10
SECTION 2.05.  Registration of Transfer and Exchange.                    11
SECTION 2.06.  Temporary Securities.                                     13
SECTION 2.07.  Mutilated, Destroyed, Lost or Stolen Debt Securities.     13
SECTION 2.08.  Cancellation.                                             14
SECTION 2.09.  Benefits of Indenture.                                    14
SECTION 2.10.  Authenticating Agent.                                     15
SECTION 2.11.  Global Securities.                                        15

                               ARTICLE III
    REDEMPTION OF DEBT SECURITIES AND SINKING FUND PROVISIONS

SECTION 3.01.  Redemption.                                               17
SECTION 3.02.  Notice of Redemption.                                     17
SECTION 3.03.  Payment Upon Redemption.                                  18
SECTION 3.04.  Sinking Fund.                                             19
SECTION 3.05.  Satisfaction of Sinking Fund Payments
               with Debt Securities.                                     19
SECTION 3.06.  Redemption of Debt Securities for Sinking Fund.           20

                                ARTICLE IV
                       COVENANTS OF THE COMPANY

SECTION 4.01.  Payment of Principal, Premium and Interest.               20
SECTION 4.02.  Maintenance of Office or Agency.                          20
SECTION 4.03.  Paying Agents.                                            21
SECTION 4.04.  Appointment to Fill Vacancy in Office of Trustee.         22
SECTION 4.05.  Compliance with Consolidation Provisions.                 22
SECTION 4.06.  Limitation on Dividends.                                  22
SECTION 4.07.  Covenants as to Illinois Power Trusts.                    23
SECTION 4.08.  Corporate Existence.                                      23

                                 ARTICLE V
                    SECURITY HOLDERS, LISTS AND REPORTS
                       BY THE COMPANY AND THE TRUSTEE

SECTION 5.01.   Company to Furnish Trustee Names and Addresses of
                Securityholders.                                         23
SECTION 5.02.  Preservation Of Information; Communications With
               Securityholders.                                          24
SECTION 5.03.  Reports By the Company.                                   24
SECTION 5.04.  Reports by the Trustee.                                   25

                               ARTICLE VI
             REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                          ON EVENT OF DEFAULT

SECTION 6.01.  Events of Default.                                        25
SECTION 6.02.  Collection of Indebtedness and Suits for Enforcement 
               by Trustee.                                               27
SECTION 6.03.  Application of Moneys Collected.                          29
SECTION 6.04.  Limitation on Suits.                                      30
SECTION 6.05.  Rights and Remedies Cumulative; Delay or Omission 
               Not Waiver.                                               31
SECTION 6.06.  Control by Securityholders.                               31
SECTION 6.07.  Undertaking to Pay Costs.                                 32

                                ARTICLE VII
                         CONCERNING THE TRUSTEE

SECTION 7.01.  Certain Duties and Responsibilities of Trustee.           32
SECTION 7.02.  Certain Rights of Trustee.                                34
SECTION 7.03.  Trustee Not Responsible for Recitals or
               Issuance of Debt Securities.                              35
SECTION 7.04.  May Hold Debt Securities.                                 36
SECTION 7.05.  Moneys Held in Trust.                                     36
SECTION 7.06.  Compensation and Reimbursement.                           36
SECTION 7.07.  Reliance on Officers' Certificate.                        37
SECTION 7.08.  Qualification; Conflicting Interests.                     37
SECTION 7.09.  Corporate Trustee Required; Eligibility.                  37
SECTION 7.10.  Resignation and Removal; Appointment of Successor.        37
SECTION 7.11.  Acceptance of Appointment By Successor.                   39
SECTION 7.12.  Merger, Conversion, Consolidation or
               Succession to Business.                                   39
SECTION 7.13.  Preferential Collection of Claims Against the Company.    41

                                  ARTICLE VIII
                        CONCERNING THE SECURITYHOLDERS
SECTION 8.01.  Evidence of Action by Securityholders.                    41
SECTION 8.02.  Proof of Execution by Securityholders.                    42
SECTION 8.03.  Who May be Deemed Owners.                                 42
SECTION 8.04.  Certain Debt Securities Owned by Company Disregarded.     42
SECTION 8.05.  Actions Binding on Future Securityholders.                43



                                   ARTICLE IX
                           SUPPLEMENTAL INDENTURES

SECTION 9.01.  Supplemental Indentures Without the Consent of 
               Securityholders.                                          43
SECTION 9.02.  Supplemental Indentures With Consent of
               Securityholders.                                          44
SECTION 9.03.  Effect of Supplemental Indentures.                        45
SECTION 9.04.  Debt Securities Affected by Supplemental Indentures.      45
SECTION 9.05.  Execution of Supplemental Indentures.                     45

                                  ARTICLE X
                            SUCCESSOR CORPORATION

SECTION 10.01. Company May Consolidate, Etc.                             46
SECTION 10.02. Successor Corporation Substituted.                        46
SECTION 10.03. Evidence of Consolidation, Etc. to Trustee.               47

                                   ARTICLE XI
                          SATISFACTION AND DISCHARGE

SECTION 11.01. Satisfaction and Discharge of Indenture.                  47
SECTION 11.02. Discharge of Obligations.                                 48
SECTION 11.03. Deposited Moneys to be Held in Trust.                     49
SECTION 11.04. Payment of Moneys Held by Paying Agents.                  49
SECTION 11.05. Repayment to Company.                                     49

                                ARTICLE XII
                  IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                          OFFICERS AND DIRECTORS

SECTION 12.01. No Recourse.                                              50

                                ARTICLE XIII
                          MISCELLANEOUS PROVISIONS

SECTION 13.01. Effect on Successors and Assigns.                         50
SECTION 13.02. Actions by Successor.                                     50
SECTION 13.03. Surrender of Company Powers.                              50
SECTION 13.04. Notices.                                                  51
SECTION 13.05. Governing Law.                                            51
SECTION 13.06. Treatment of the Debt Securities as Debt.                 51
SECTION 13.07. Compliance Certificates and Opinions.                     51
SECTION 13.08. Payments on Business Days.                                52
SECTION 13.09. Conflict with Trust Indenture Act.                        52
SECTION 13.10. Counterparts.                                             52
SECTION 13.11. Separability.                                             52
SECTION 13.12. Assignment.                                               52
SECTION 13.13. Acknowledgment of Rights.                                 53

                                ARTICLE XIV
                   SUBORDINATION OF DEBT SECURITIES

SECTION 14.01. Subordination Terms.                                      53

Section of
Trust Indenture Act                     Section of
of 1939, as amended                     Indenture

310(a)                                  7.09
310(b)                             7.08
                                   7.10
310(c)                                  Inapplicable
311(a)                                  7.13(a)
311(b)                             7.13(b)
311(c)                                  Inapplicable
312(a)                                  5.01
                                   5.02(a)
312(b)                             5.02(b)
312(c)                                  5.02(c)
313(a)                                  5.04(a)
313(b)                             5.04(b)
313(c)                                  5.04(a)
                                   5.04(b)
313(d)                             5.04(c)
314(a)                                  5.03
314(b)                             Inapplicable
314(c)                                  13.06
314(d)                             Inapplicable
314(e)                                  13.06
314(f)                                  Inapplicable
315(a)                                  7.01(a)
                                   7.02
315(b)                             6.07
315(c)                                  7.01
315(d)                             7.01(b)
                                   7.01(c)
315(e)                                  6.07
316(a)                                  6.06
                                   8.04
316(b)                             6.04
316(c)                                  8.01
317(a)                                  6.02
317(b)                             4.03
318(a)                                  13.08

Note:     This Cross-Reference Table shall not, for any purpose,
          be deemed to be part of the Indenture and shall not have any
          bearing on the interpretation of its terms or provisions.
          
                  THIS  INDENTURE, dated as of January 1, 1996,  between
ILLINOIS  POWER COMPANY, an Illinois corporation (the "Company"),
and WILMINGTON TRUST COMPANY, a Delaware banking corporation, not
in its individual capacity but solely as trustee (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  (the "Securities"), to be issued  in  one  or  more
series  as in this Indenture provided.  This Indenture is subject
to the provisions of the Trust Indenture Act of 1939, as amended,
that are required to be part of this Indenture and shall, to  the
extent  applicable, be governed by such provisions.   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
covenanted and agreed, for the equal and proportionate benefit of
all  Holders  of  the  Securities or of any  series  thereof,  as
follows:
  
                            ARTICLE I
                           DEFINITIONS
  
SECTION 1.01.  Definitions of Terms.

           The  terms defined in this Section (except as in  this
Indenture  otherwise  expressly provided or  unless  the  context
otherwise requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective  meanings
specified in this Section and shall include the plural as well as
the  singular.  All other terms used in this Indenture  that  are
defined  in the Trust Indenture Act of 1939, as amended, or  that
are  by  reference  in such Trust Indenture Act  defined  in  the
Securities  Act  of 1933, as amended (except as herein  otherwise
expressly  provided  or unless the context  otherwise  requires),
shall  have  the meanings assigned to such terms  in  said  Trust
Indenture Act and in said Securities Act as in force at the  date
of the execution of this instrument.
  
           "Affiliate" means, with respect to a specified Person,
(a)  any  Person  directly or indirectly owning,  controlling  or
holding with power to vote 10% or more of the outstanding  voting
securities or other ownership interests of the specified  Person,
(b) any Person 10% or more of whose outstanding voting securities
or  other  ownership interests are directly or indirectly  owned,
controlled  or  held with power to vote by the specified  Person,
(c) any Person directly or indirectly controlling, controlled  by
or  under  common  control  with  the  specified  Person,  (d)  a
partnership  in which the specified Person is a general  partner,
(e)  any officer or director of the specified Person and  (f)  if
the  specified Person is an individual, any entity of  which  the
specified Person is an officer, director or general partner.
  
           "Authenticating  Agent" means an authenticating  agent
with  respect  to  all or any of the series  of  Debt  Securities
appointed  with  respect  to  all or  such  series  of  the  Debt
Securities by the Trustee pursuant to Section 2.10.
  
          "Bankruptcy Law" means Title 11, United States Code, or
any similar federal or state law for the relief of debtors.
  
           "Board  of Directors" means the board of directors  of
the  Company, or any duly authorized committee of such  board  or
any  officer  of  the Company duly authorized  by  the  board  of
directors of the Company or a 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.
  
           "Business  Day" means, with respect to any  series  of
Debt  Securities,  any  day other than a  day  on  which  banking
institutions  in New York are authorized or required  by  law  to
close.
  
            "Certificate"  means  a  certificate  signed  by  the
principal executive officer, the principal financial officer, the
treasurer  or  the principal accounting officer of  the  Company.
The  Certificate need not comply with the provisions  of  Section
13.07.
  
            "Common   Securities"   means  undivided   beneficial
interests  in  the assets of an Illinois Power Trust  which  rank
pari  passu  with  Preferred Securities  issued  by  such  trust;
provided,  however,  that  upon the occurrence  of  an  Event  of
Default, the rights of holders of Common Securities to payment in
respect   of   distributions  and  payments   upon   liquidation,
redemption and maturity are subordinated to the rights of holders
of Preferred Securities.
  
           "Common Securities Guarantee" means any guarantee that
the  Company may enter into with an Illinois Power Trust or other
Persons  that operate directly or indirectly for the  benefit  of
holders of Common Securities of such trust.

           "Company"  means Illinois Power Company, a corporation
duly  organized  and  existing under the laws  of  the  State  of
Illinois, and, subject to the provisions of Article X, shall also
include its successors and assigns.
  
           "Corporate  Trust  Office" means  the  office  of  the
Trustee  at  which, at any particular time, its  corporate  trust
business shall be principally administered, which office  at  the
date  hereof is located at Rodney Square North, 1100 North Market
Street,  Wilmington,  Delaware 19890-0001,  Attention:  Corporate
Trust Department.
  
           "Custodian"  means  any receiver,  trustee,  assignee,
liquidator, or similar official under any Bankruptcy Law.
  
           "Declaration"  means, in respect of an Illinois  Power
Trust,  the  amended and restated declaration of  trust  of  such
Illinois  Power Trust or any other governing instrument  of  such
Trust.
  
            "Debt   Securities"   means   the   Debt   Securities
authenticated and delivered under this Indenture.
  
           "Default" means any event, act or condition that  with
notice  or lapse of time, or both, would constitute an  Event  of
Default.
          
           "Defaulted  Interest"  has the  meaning  specified  in
Section 2.03.
  
           "Depositary" means, with respect to Debt Securities of
any  series for which the Company shall determine that such  Debt
Securities  will be issued as a Global Security,  The  Depository
Trust  Company, New York, New York, another clearing  agency,  or
any  successor registered as a clearing agency under the Exchange
Act  or  other applicable statute or regulation, which,  in  each
case,  shall  be  designated by the Company  pursuant  to  either
Section 2.01 or 2.11.

            "Event  of  Default"  means,  with  respect  to  Debt
Securities of a particular series, any event specified in Section
6.01,   continued  for  the  period  of  time,  if  any,  therein
designated.
  
           "Exchange  Act" means the Securities Exchange  Act  of
1934, as amended.
  
           "Global Security" means, with respect to any series of
Securities, a Debt Security executed by the Company and delivered
by  the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Indenture,  which  shall
be registered in the name of this Depositary or its nominee.

           "Governmental Obligations" means securities  that  are
(i)  direct obligations of the United States of America  for  the
payment  of  which its full faith and credit is pledged  or  (ii)
obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America, the
payment  of  which is unconditionally guaranteed as a full  faith
and  credit obligation by the United States of America  that,  in
either case, are not callable or redeemable at the option of  the
issuer  thereof,  and  shall also include  a  depositary  receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities
Act)   as   custodian  with  respect  to  any  such  Governmental
Obligation  or a specific payment of principal of or interest  on
any  such Governmental Obligation held by such custodian for  the
account  of  the  holder  of such depositary  receipt;  provided,
however, that (except as required by law) such custodian  is  not
authorized to make any deduction from the amount payable  to  the
holder of such depositary receipt from any amount received by the
custodian  in  respect  of  the Governmental  Obligation  or  the
specific  payment of principal of or interest on the Governmental
Obligation evidenced by such depositary receipt.
  
           "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.

          "Illinois Power Trust"  means a Delaware business trust
formed  by  the  Company  for  the  purpose  of  purchasing  Debt
Securities of the Company.
  
            "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 in accordance with the terms hereof.
  
           "Interest Payment Date", when used with respect to any
installment  of  interest  on a Debt  Security  of  a  particular
series,  means the date specified in such Debt Security or  in  a
Board  Resolution, in an Officers' Certificate or in an indenture
supplemental hereto with respect to such series as the fixed date
on  which  an  installment  of  interest  with  respect  to  Debt
Securities of that series is due and payable.

           "Officers' Certificate" means a certificate signed  by
the  President  or a Vice President and by the  Treasurer  or  an
Assistant  Treasurer or the Controller or an Assistant Controller
or the Secretary or an Assistant Secretary of the Company that is
delivered  to  the Trustee in accordance with the  terms  hereof.
Each  such certificate shall include the statements provided  for
in Section 13.07, if and to the extent required by the provisions
thereof.

           "Opinion  of Counsel" means an opinion in  writing  of
legal  counsel,  who  may be an employee of or  counsel  for  the
Company, that is delivered to the Trustee in accordance with  the
terms  hereof.   Each such opinion shall include  the  statements
provided  for in Section 13.07, if and to the extent required  by
the provisions thereof.
  
            "Outstanding",  when  used  with  reference  to  Debt
Securities  of  any series, means, subject to the  provisions  of
Section  8.04, as of any particular time, all Debt Securities  of
that  series  theretofore  authenticated  and  delivered  by  the
Trustee   under  this  Indenture,  except  (a)  Debt   Securities
theretofore  canceled  by the Trustee or  any  paying  agent,  or
delivered to the Trustee or any paying agent for cancellation  or
that  have  previously  been canceled;  (b)  Debt  Securities  or
portions thereof for the payment or redemption of which moneys or
Governmental Obligations in the necessary amount shall have  been
deposited  in  trust with the Trustee or with  any  paying  agent
(other  than  the  Company) or shall  have  been  set  aside  and
segregated in trust by the Company (if the Company shall  act  as
its  own  paying  agent); provided, however, that  if  such  Debt
Securities or portions of such Debt Securities are to be redeemed
prior  to  the maturity thereof, notice of such redemption  shall
have  been  given  as  provided in  Section  3.02,  or  provision
satisfactory to the Trustee shall have been made for giving  such
notice;  (c)  Debt  Securities in lieu of or in substitution  for
which  other  Debt  Securities shall have been authenticated  and
delivered  pursuant to the terms of Section 2.07;  and  (d)  Debt
Securities, except to the extent provided in Sections  11.01  and
11.02,  with respect to which the Company has effected defeasance
and/or covenant defeasance as provided in Article XI.
  
             "Person"    means   any   individual,   corporation,
partnership,   limited   liability   company,   joint    venture,
joint-stock company, unincorporated organization or government or
any agency or political subdivision thereof.
  
           "Predecessor Security" of any particular Debt Security
means every previous Debt Security evidencing all or a portion of
the  same debt and guarantee as that evidenced by such particular
Debt Security; and, for the purposes of this definition, any Debt
Security authenticated and delivered under Section 2.07  in  lieu
of  a lost, destroyed or stolen Debt Security shall be deemed  to
evidence  the  same debt as the lost, destroyed  or  stolen  Debt
Security.

            "Preferred  Securities"  means  undivided  beneficial
interests  in  the assets of an Illinois Power Trust  which  rank
pari passu with Common Securities issued by such trust; provided,
however,  that  upon the occurrence of an Event of  Default,  the
rights  of holders of Common Securities to payment in respect  of
distributions  and  payments  upon  liquidation,  redemption  and
otherwise  are subordinated to the rights of holders of Preferred
Securities.
  
           "Preferred  Securities Guarantee" means any  guarantee
that  the Company may enter into with an Illinois Power Trust  or
other  Persons  that  operates directly  or  indirectly  for  the
benefit of holders of Preferred Securities of such trust.
  
           "Property  Trustee"  means the entity  performing  the
functions  of  the  Property Trustee of an Illinois  Power  Trust
under the applicable Declaration of such Illinois Power Trust.
  
           "Responsible Officer," when used with respect  to  the
Trustee, means the Chairman or any Vice Chairman of the Board  of
Directors, the President, any Vice President, the Secretary,  the
Treasurer, any trust officer, any corporate trust officer or  any
other  officer  or  assistant officer of the Trustee  customarily
performing  functions similar to those performed by  the  Persons
who  at the time shall be such officers, respectively, or to whom
any  corporate  trust matter is referred because of  his  or  her
knowledge of and familiarity with the particular subject.

           "Securities Act" means the Securities Act of 1933,  as
amended from time to time or any successor legislation.

            "Securityholder",   "Holder  of   Debt   Securities",
"Registered Holder", or other similar term, means the  Person  or
Persons  in whose name or names a particular Debt Security  shall
be  registered on the books of the Company kept for that  purpose
in accordance with the terms of this Indenture.

           "Security Register" and "Security Registrar" have  the
respective meanings set forth in Section 2.05.
  
          "Subsidiary" means, with respect to any Person, (i) any
corporation at least a majority of whose outstanding Voting Stock
shall  at  the  time  be owned, directly or indirectly,  by  such
Person  or  by one or more of its Subsidiaries or by such  Person
and   one   or  more  of  its  Subsidiaries,  (ii)  any   general
partnership, joint venture or similar entity, at least a majority
of  whose  outstanding partnership or similar interests shall  at
the  time  be  owned by such Person, or by one  or  more  of  its
Subsidiaries,  or  by  such  Person  and  one  or  more  of   its
Subsidiaries  and  (iii) any limited partnership  of  which  such
Person or any of its Subsidiaries is a general partner.
  
           "Trustee" means Wilmington Trust Company, not  in  its
individual  capacity, and, subject to the provisions  of  Article
VII,  shall also include its successors and assigns, and,  if  at
any  time  there is more than one Person acting in such  capacity
hereunder,  "Trustee"  shall mean each  such  Person.   The  term
"Trustee,"  as used with respect to a particular series  of  Debt
Securities, shall mean the trustee with respect to that series.
  
           "Trust Indenture Act" means the Trust Indenture Act of
1939, subject to the provisions of Sections 9.01, 9.02 and 10.01,
as in effect at the date of execution of this instrument.
 
            "Trust   Securities"  means  Common  Securities   and
Preferred Securities.
  
           "Voting  Stock", as applied to stock  of  any  Person,
means  shares, interests, participations or other equivalents  in
the  equity  interest (however designated) in such Person  having
ordinary  voting  power for the election of  a  majority  of  the
directors (or the equivalent) of such Person, other than  shares,
interests, participations or other equivalents having such  power
only by reason of the occurrence of a contingency.
  
                           ARTICLE II
              ISSUE, DESCRIPTION, TERMS, EXECUTION,
          REGISTRATION AND EXCHANGE OF DEBT SECURITIES
  
SECTION 2.01.  Designation and Terms of Debt Securities.

           The aggregate principal amount of Debt Securities that
may  be  authenticated  and delivered  under  this  Indenture  is
unlimited.   The  Debt Securities may be issued in  one  or  more
series up to the aggregate principal amount of Debt Securities of
that  series  from time to time authorized by or  pursuant  to  a
Board  Resolution  of the Company, or pursuant  to  one  or  more
indentures supplemental hereto.  Prior to the initial issuance of
Debt  Securities of any series, there shall be established in  or
pursuant  to a Board Resolution of the Company, and set forth  in
an   Officers'  Certificates,  or  established  in  one  or  more
indentures supplemental hereto:
  
     (1)   the title of the series of Debt Security (which  shall
     distinguish  the  Debt Securities of that  series  from  all
     other series of Debt Securities);
  
     (2)   any limit upon the aggregate principal amount  of  the
     Debt Securities of that series that may be authenticated and
     delivered  under this Indenture (except for Debt  Securities
     authenticated  and delivered upon registration  of  transfer
     of, or in exchange for, or in lieu of, other Debt Securities
     of that series);
 
      (3)   the date or dates on which the principal of the  Debt
Securities of that series is payable;
  
     (4)   the rate or rates at which the Debt Securities of that
     series  shall bear interest or the manner of calculation  of
     such rate or rates, if any;
  
     (5)   the  date  or  dates from which  such  interest  shall
     accrue,  the  Interest Payment Dates on which such  interest
     will  be  payable  or  the manner of determination  of  such
     Interest  Payment  Dates  and  the  record  date   for   the
     determination of holders to whom interest is payable on  any
     such Interest Payment Dates;
  
     (6)   the  right,  if  any, to defer  the  interest  payment
     periods and the duration of such extension;
  
     (7)  the period or periods within which, the price or prices
     at  which,  and  the terms and conditions upon  which,  Debt
     Securities  of that series may be redeemed, in whole  or  in
     part, at the option of the Company;
  
     (8)   the  obligation, if any, of the Company to  redeem  or
     purchase  Debt  Securities of that series  pursuant  to  any
     sinking  fund  or  analogous provisions (including  payments
     made  in  cash  in  participation  of  future  sinking  fund
     obligations)  or at the option of a holder thereof  and  the
     period  or  periods  within which, the price  or  prices  at
     which,  and  the  terms  and  conditions  upon  which,  Debt
     Securities of that series shall be redeemed or purchased, in
     whole or in part, pursuant to such obligation;
  
      (9)   the  security  or subordination  terms  of  the  Debt
     Securities of that series;
  
     (10)  the  form  of  the  Debt Securities  of  that  series,
     including the form of the Certificate of Authentication  for
     such series;
  
     (11) if other than denominations of twenty-five U.S. dollars
     ($25) or any integral multiple thereof, the denominations in
     which the Debt Securities of that series shall be issuable;
  
     (12)  whether and under what circumstances the Company  will
     pay  additional amounts on the Debt Securities of the series
     to  any  holder who is not a United States person (including
     any  modification to the definition of such term) in respect
     of  any  tax, assessment or governmental charge and, if  so,
     whether the Company will have the option to redeem such Debt
     Securities rather than pay such additional amounts (and  the
     terms of any such option);

     (13)  whether the Debt Securities are issuable as  a  Global
     Security  and, in such case, the identity of the  Depositary
     for such series.; and
  
     (14)  any  and all other terms with respect to  such  series
     (which  terms  shall not be inconsistent with the  terms  of
     this  Indenture), including any terms which may be  required
     by  or advisable under United States laws or regulations  or
     advisable   in  connection  with  the  marketing   of   Debt
     Securities of that series.
  
           All  Debt  Securities  of  any  one  series  shall  be
substantially identical except as to denomination and  except  as
may  otherwise  be  provided in or pursuant  to  any  such  Board
Resolution or in any indentures supplemental hereto.
  
           If  any  of  the terms of a series are established  by
action  taken  pursuant  to  a Board Resolution,  a  copy  of  an
appropriate  record  of such action shall  be  certified  by  the
Secretary  or an Assistant Secretary of the Company and delivered
to  the  Trustee  at or prior to the delivery  of  the  Officers'
Certificate setting forth the terms of such series.
  
SECTION 2.02.  Form of Debt Securities and Trustee's Certificate.

           The  Debt  Securities of any series and the  Trustee's
certificate of authentication to be borne by such Debt Securities
shall  be substantially of the tenor and purport as set forth  in
one  or more indentures supplemental hereto or as provided  in  a
Board  Resolution  and as set forth in an Officers'  Certificate,
and   may   have  such  letters,  numbers  or  other   marks   of
identification  or designation and such legends  or  endorsements
printed, lithographed or engraved thereon as the Company may deem
appropriate  and as are not inconsistent with the  provisions  of
this  Indenture, or as may be required to comply with any law  or
with  any  rule or regulation made pursuant thereto or  with  any
rule or regulation of any stock exchange on which Debt Securities
of that series may be listed, or to conform to usage.
  
SECTION 2.03.  Denominations; Provisions for Payment.

           The  Debt  Securities shall be issuable as  registered
Debt  Securities  and  in the denominations of  twenty-five  U.S.
dollars  ($25)  or  any  integral multiple  thereof,  subject  to
Section  2.01(11).   The Debt Securities of a  particular  series
shall  bear  interest  payable on  the  dates  and  at  the  rate
specified with respect to that series.  The principal of and  the
interest  on  the Debt Securities of any series, as well  as  any
premium  thereon in case of redemption thereof prior to maturity,
shall be payable in the coin or currency of the United States  of
America  that  at  the time of such payment is legal  tender  for
public  and private debt, at the office or agency of the  Company
maintained for that purpose in the Borough of Manhattan, the City
and  State  of New York.  Each Debt Security shall be  dated  the
date  of  its  authentication.  Interest on the  Debt  Securities
shall  be  computed on the basis of a 360-day  year  composed  of
twelve 30-day months.
  
           Unless  otherwise  contemplated by Section  2.01  with
respect   to   any  series  of  Debt  Securities,  the   interest
installment  on  any  Debt  Security  that  is  payable,  and  is
punctually  paid  or duly provided for, on any  Interest  Payment
Date  for  Debt Securities of that series shall be  paid  to  the
Person  in  whose  name  said  Debt  Security  (or  one  or  more
Predecessor  Debt  Securities) is  registered  at  the  close  of
business   on   the  regular  record  date  for   such   interest
installment.

           In  the  event that any Debt Security of a  particular
series  or  portion  thereof is called  for  redemption  and  the
redemption  date  is  subsequent to a regular  record  date  with
respect  to any Interest Payment Date and prior to such  Interest
Payment  Date, interest on such Debt Security will be  paid  upon
presentation and surrender of such Debt Security as  provided  in
Section 3.03.

           Any interest on any Debt Security that is payable, but
is  not  punctually paid or duly provided for,  on  any  Interest
Payment  Date  for Debt Securities of that series (herein  called
"Defaulted Interest") shall forthwith cease to be payable to  the
registered holder on the relevant regular record date  by  virtue
of  having been such holder; and such Defaulted Interest shall be
paid  by the Company, at its election, as provided in clause  (1)
or clause (2) below:

     (1)   The Company may make payment of any Defaulted Interest
     on  Debt Securities to the Persons in whose names such  Debt
     Securities (or their respective Predecessor Debt 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 such Debt Security and the  date
     of  the  proposed payment, and at the same time the  Company
     shall  deposit with the Trustee an amount of money equal  to
     the  aggregate amount proposed to be paid in respect of such
     Defaulted  Interest or shall make arrangements  satisfactory
     to  the  Trustee for such deposit prior to the date  of  the
     proposed  payment, such money when deposited to be  held  in
     trust  for  the  benefit  of the Persons  entitled  to  such
     Defaulted  Interest  as in this clause provided.   Thereupon
     the  Trustee shall fix a special record date for the payment
     of  such Defaulted Interest which shall not be more than  15
     nor less than 10
     days  prior to the date of the proposed payment and not less
     than  10 days after the receipt by the Trustee of the notice
     of  the proposed payment.  The Trustee shall promptly notify
     the Company 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 Securityholder at his or her address as  it
     appears  in the Security Register (as hereinafter  defined),
     not  less  than 10 days prior to such special  record  date.
     Notice  of  the proposed payment of such Defaulted  Interest
     and  the special record date therefor having been mailed  as
     aforesaid,  such Defaulted Interest shall  be  paid  to  the
     Persons  in  whose  names  such Debt  Securities  (or  their
     respective  Predecessor Debt Securities) are  registered  on
     such  special  record date and shall be  no  longer  payable
     pursuant to the following clause (2).

     (2)   The Company may make payment of any Defaulted Interest
     on  any  Debt  Securities  in any other  lawful  manner  not
     inconsistent   with  the  requirements  of  any   securities
     exchange  on  which such Debt Securities may be listed,  and
     upon  such  notice as may be required by such exchange,  if,
     after  notice  given by the Company to the Trustees  of  the
     proposed  payment pursuant to this clause,  such  manner  of
     payment shall be deemed practicable by the Trustee.
  
           Unless otherwise provided in a Board Resolution, in an
Officers'  Certificate or in one or more indentures  supplemental
hereto  establishing the terms of any series of  Debt  Securities
pursuant  to Section 2.01 hereof, the term "regular record  date"
as  used  in  this  Section with respect  to  a  series  of  Debt
Securities  with respect to any Interest Payment  Date  for  such
series  shall  mean the fifteenth day of the month  in  which  an
Interest  Payment  Date established for such series  pursuant  to
Section  2.01 hereof shall occur, whether or not such date  is  a
Business Day.

           Subject  to the foregoing provisions of this  Section,
each  Debt  Security of a series delivered under  this  Indenture
upon  transfer of or in exchange for or in lieu of any other Debt
Security  of  such  series shall carry  the  rights  to  interest
accrued  and  unpaid, and to accrue, that were  carried  by  such
other Debt Security.
  
SECTION 2.04.  Execution and Authentication.

           The  Debt Securities shall be signed on behalf of  the
Company by its Chairman, President or one of its Vice Presidents,
under its corporate seal attested by its Secretary or one of  its
Assistant Secretaries.  Signatures may be in the form of a manual
or  facsimile  signature.   The Company  may  use  the  facsimile
signature of any Person who shall have been a President  or  Vice
President  thereof,  or  of any Person  who  shall  have  been  a
Secretary  or  Assistant Secretary thereof,  notwithstanding  the
fact  that at the time the Debt Securities shall be authenticated
and delivered or disposed of such Person shall have ceased to  be
the  President  or  a  Vice President, or  the  Secretary  or  an
Assistant Secretary, of the Company. The seal of the Company  may
be  in the form of a facsimile of such seal and may be impressed,
affixed,   imprinted  or  otherwise  reproduced   on   the   Debt
Securities.   The  Debt  Securities may contain  such  notations,
legends  or endorsements required by law, stock exchange rule  or
usage.   Each  Debt  Security shall be  dated  the  date  of  its
authentication by the Trustee.
  
           A Debt Security shall not be valid until authenticated
manually  by  an authorized signatory of the Trustee,  or  by  an
Authenticating  Agent.   Such  signature  shall   be   conclusive
evidence  that the Debt Security so authenticated has  been  duly
authenticated  and  delivered hereunder and that  the  holder  is
entitled to the benefits of this Indenture.
  
           At  any time and from time to time after the execution
and  delivery  of  this Indenture, the Company may  deliver  Debt
Securities  of any series executed by the Company to the  Trustee
for  authentication, together with a written order of the Company
for  the  authentication and delivery of  such  Debt  Securities,
signed  by  its President or any Vice President and its Treasurer
or  any  Assistant Treasurer, and the Trustee in accordance  with
such  written  order  shall authenticate and  deliver  such  Debt
Securities.
  
           In  authenticating such Debt Securities and  accepting
the  additional responsibilities under this Indenture in relation
to  such  Debt  Securities,  the Trustee  shall  be  entitled  to
receive,  and (subject to Section 7.01) shall be fully  protected
in  relying upon, an Opinion of Counsel stating that the form and
terms  thereof  have  been established  in  conformity  with  the
provisions of this Indenture.
  
           The Trustee shall not be required to authenticate such
Debt Securities if the issue of such Debt Securities pursuant  to
this  Indenture will affect the Trustee's own rights,  duties  or
immunities  under  the  Debt Securities  and  this  Indenture  or
otherwise  in a manner that is not reasonably acceptable  to  the
Trustee.
  
SECTION 2.05.  Registration of Transfer and Exchange.

     (a)   Debt  Securities of any series may be  exchanged  upon
     presentation thereof at the Corporate Trust Office  or  such
     other location designated by the Company pursuant to Section
     4.02  for other Debt Securities of such series of authorized
     denominations,  and for a like aggregate  principal  amount,
     upon  payment of a sum sufficient to cover any tax or  other
     governmental charge in relation thereto, all as provided  in
     this  Section.   In  respect  of  any  Debt  Securities   so
     surrendered  for  exchange, the Company shall  execute,  the
     Trustee  shall authenticate and such office or agency  shall
     deliver  in  exchange  therefor the Debt  Security  or  Debt
     Securities of the same series that the Securityholder making
     the  exchange shall be entitled to receive, bearing  numbers
     not contemporaneously outstanding.
  
          (b)   The  Company shall keep, or cause to be kept,  at
          the  Corporate  Trust  Office or  such  other  location
          designated  by the Company pursuant to Section  4.02  a
          register  or  registers  (herein  referred  to  as  the
          "Security   Register")  in  which,  subject   to   such
          reasonable regulations as it may prescribe, the Company
          shall register the Debt Securities and the transfers of
          Debt  Securities as in this Article provided and  which
          at all reasonable times shall be open for inspection by
          the   Trustee.   The  registrar  for  the  purpose   of
          registering  Securities and transfer of  Securities  as
          herein  provided  shall be appointed as  authorized  by
          Board Resolution (the "Security Registrar").
  
          Upon surrender for transfer of any Debt Security at the
Corporate Trust Office or such other location designated  by  the
Company pursuant to Section 4.02, the Company shall execute,  the
Trustee  shall  authenticate  and such  office  or  agency  shall
deliver  in the name of the transferee or transferees a new  Debt
Security  or  Debt  Securities of the same  series  as  the  Debt
Security presented for a like aggregate principal amount.
  
           All  Debt  Securities  presented  or  surrendered  for
exchange  or  registration  of  transfer,  as  provided  in  this
Section,  shall be accompanied (if so required by the Company  or
the Security Registrar) by a written instrument or instruments of
transfer,  in  form satisfactory to the Company or  the  Security
Registrar,  duly  executed by the registered holder  or  by  such
holder's duly authorized attorney in writing.
  
     (c)   No  service charge shall be made for any  exchange  or
     registration of transfer of Debt Securities, or issue of new
     Debt Securities in case of partial redemption of any series,
     but  the Company may require payment of a sum sufficient  to
     cover  any  tax  or  other governmental charge  in  relation
     thereto,  other  than exchanges pursuant  to  Section  2.06,
     Section 3.03(b) and Section 9.04 not involving any transfer.
  
     (d)   The  Company  shall  not be  required  (i)  to  issue,
     exchange  or  register the transfer of any  Debt  Securities
     during a period beginning at the opening of business 15 days
     before  the day of the mailing of a notice of redemption  of
     less  than all the Outstanding Debt Securities of  the  same
     series  and  ending at the close of business on the  day  of
     such  mailing,  nor  (ii) to register  the  transfer  of  or
     exchange  any  Debt  Securities of any  series  or  portions
     thereof  called  for  redemption.  The  provisions  of  this
     Section  2.05  are,  with respect to  any  Global  Security,
     subject to Section 2.11 hereof.
  
SECTION 2.06.  Temporary Securities.

           Pending  the preparation of definitive Debt Securities
of  any  series, the Company may execute, and the  Trustee  shall
authenticate  and  deliver, temporary Debt  Securities  (printed,
lithographed  or  typewritten)  of any  authorized  denomination.
Such temporary Debt Securities shall be substantially in the form
of  the  definitive  Debt Securities in lieu of  which  they  are
issued, but with such omissions, insertions and variations as may
be  appropriate  for temporary Debt Securities,  all  as  may  be
determined by the Company.  Every temporary Debt Security of  any
series  shall be executed by the Company and be authenticated  by
the  Trustee  upon  the same conditions and in substantially  the
same  manner,  and  with  like effect,  as  the  definitive  Debt
Securities of such series. Without unnecessary delay the  Company
will  execute  and  furnish definitive Debt  Securities  of  such
series and thereupon any or all temporary Debt Securities of such
series may be surrendered in exchange therefor (without charge to
the  holders),  at  the Corporate Trust Office or  such  location
designated  by  the  Company pursuant to Section  4.02  and  such
Corporate Trust Office or location shall deliver in exchange  for
such  temporary  Debt  Securities an  equal  aggregate  principal
amount  of definitive Debt Securities of such series, unless  the
Company  advises  the Trustee to the effect that definitive  Debt
Securities  need  not  be  executed and furnished  until  further
notice from the Company.  Until so exchanged, the temporary  Debt
Securities of such series shall be entitled to the same  benefits
under this Indenture as definitive Debt Securities of such series
authenticated and delivered hereunder.
  
SECTION   2.07.   Mutilated,  Destroyed,  Lost  or  Stolen   Debt
Securities.

          In case any temporary or definitive Debt Security shall
become  mutilated  or be destroyed, lost or stolen,  the  Company
(subject to the next succeeding sentence) shall execute, and upon
the  Company's request, the Trustee (subject as aforesaid)  shall
authenticate and deliver, a new Debt Security of the same series,
bearing  a number not contemporaneously outstanding, in  exchange
and  substitution for the mutilated Debt Security, or in lieu  of
and  in substitution for the Debt Security so destroyed, lost  or
stolen.   In  every  case the applicant for  a  substituted  Debt
Security  shall  furnish  to the Company  and  the  Trustee  such
security or indemnity as may be required by them to save each  of
them  harmless, and, in every case of destruction, loss or theft,
the  applicant shall also furnish to the Company and the  Trustee
evidence to their satisfaction of the destruction, loss or  theft
of  the  applicant's Debt Security and of the ownership  thereof.
The  Trustee may authenticate any such substituted Debt  Security
and deliver the same upon the written request or authorization of
any officer of the Company.  Upon the issuance of any substituted
Debt  Security,  the Company may require the  payment  of  a  sum
sufficient to cover any tax or other governmental charge that may
be  imposed in relation thereto and any other expenses (including
the  fees  and expenses of the Trustee) connected therewith.   In
case  any  Debt Security that has matured or is about  to  mature
shall  become  mutilated or be destroyed,  lost  or  stolen,  the
Company  may, instead of issuing a substitute Debt Security,  pay
or  authorize the payment of the same (without surrender  thereof
except in the case of a mutilated Debt Security) if the applicant
for  such  payment shall furnish to the Company and  the  Trustee
such  security  or  indemnity as they may require  to  save  them
harmless, and, in case of destruction, loss or theft, evidence to
the   satisfaction  of  the  Company  and  the  Trustee  of   the
destruction,  loss  or theft of such Debt  Security  and  of  the
ownership thereof.
  
           Every replacement Debt Security issued pursuant to the
provisions   of  this  Section  shall  constitute  an  additional
contractual  obligation  of  the  Company,  whether  or  not  the
mutilated, destroyed, lost or stolen Debt Security shall be found
at  any  time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately
with  any  and all other Debt Securities of the same series  duly
issued  hereunder.  All Debt Securities shall be held  and  owned
upon  the  express  condition that the foregoing  provisions  are
exclusive   with  respect  to  the  replacement  or  payment   of
mutilated, destroyed, lost or stolen Debt Securities,  and  shall
preclude  (to  the  extent lawful) any and all  other  rights  or
remedies,   notwithstanding  any  law  or  statute  existing   or
hereafter enacted to the contrary with respect to the replacement
or  payment of negotiable instruments or other securities without
their surrender.
  
SECTION 2.08.  Cancellation.

           All  Debt  Securities surrendered for the  purpose  of
payment, redemption, exchange or registration of transfer  shall,
if  surrendered to the Company or any paying agent, be  delivered
to  the  Trustee  for  cancellation, or, if  surrendered  to  the
Trustee,  shall be cancelled by it, and no Debt Securities  shall
be  issued  in  lieu  thereof except  as  expressly  required  or
permitted by any of the provisions of this Indenture.  On request
of  the Company at the time of such surrender, the Trustee  shall
deliver  to  the  Company canceled Debt Securities  held  by  the
Trustee.  In the absence of such request the Trustee may  dispose
of  canceled  Debt  Securities in accordance  with  its  standard
procedures  and  deliver  a certificate  of  disposition  to  the
Company.  If the Company shall otherwise acquire any of the  Debt
Securities,  however, such acquisition shall  not  operate  as  a
redemption  or  satisfaction of the indebtedness  represented  by
such  Debt Securities unless and until the same are delivered  to
the Trustee for cancellation.
  
SECTION 2.09.  Benefits of Indenture.

           Nothing  in  this Indenture or in the Debt Securities,
express  or  implied, shall give or be construed to give  to  any
Person, other than the parties hereto and the holders of the Debt
Securities  (and, with respect to the provisions of Article  XIV,
the holders of Senior Indebtedness) any legal or equitable right,
remedy  or claim under or in respect of this Indenture, or  under
any  covenant, condition or provision herein contained; all  such
covenants,  conditions and provisions being for the sole  benefit
of  the  parties hereto and of the holders of the Debt Securities
(and,  with respect to the provisions of Article XIV, the holders
of Senior Indebtedness).
  
SECTION 2.10.  Authenticating Agent.

           So  long  as any of the Debt Securities of any  series
remain Outstanding, there may be an Authenticating Agent for  any
or  all  such  series of Debt Securities which the Trustee  shall
have  the  right to appoint.  Said Authenticating Agent shall  be
authorized  to act on behalf of the Trustee to authenticate  Debt
Securities  of  such  series issued upon  exchange,  transfer  or
partial  redemption thereof, and Debt 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.   All references in  this  Indenture  to  the
authentication of Debt Securities by the Trustee shall be  deemed
to  include  authentication by an Authenticating Agent  for  such
series.   Each  Authenticating Agent shall be acceptable  to  the
Company  and  shall be a corporation that has a combined  capital
and  surplus,  as  most recently reported or  determined  by  it,
sufficient under the laws of any jurisdiction under which  it  is
organized  or  in which it is doing business to conduct  a  trust
business,  and that is otherwise authorized under  such  laws  to
conduct   such   business  and  is  subject  to  supervision   or
examination by federal or state authorities.  If at any time  any
Authenticating  Agent  shall cease to be eligible  in  accordance
with these provisions, it shall resign immediately.
           Any  Authenticating Agent may at any  time  resign  by
giving  written notice of resignation to the Trustee and  to  the
Company.   The Trustee may at any time (and upon request  by  the
Company  shall) terminate the agency of any Authenticating  Agent
by  giving  written notice of termination to such  Authenticating
Agent  and  to  the  Company.  Upon resignation,  termination  or
cessation of eligibility of any Authenticating Agent, the Trustee
may appoint an eligible successor Authenticating Agent acceptable
to   the  Company.   Any  successor  Authenticating  Agent,  upon
acceptance of its appointment hereunder, shall become vested with
all the rights, powers and duties of its predecessor hereunder as
if originally named as an Authenticating Agent pursuant hereto.

SECTION 2.11.  Global Securities.

     (a)  If the Company shall establish pursuant to Section 2.01
     that  the Debt Securities of a particular series are  to  be
     issued  as a Global Security or Securities, then the Company
     shall  execute  and  the Trustee shall, in  accordance  with
     Section  2.04,  authenticate and deliver, a Global  Security
     that  (i)  shall represent, and shall be denominated  in  an
     amount  equal to the aggregate principal amount of,  all  of
     the  Outstanding Debt Securities of such series, (ii)  shall
     be  registered in the name of the Depositary or its nominee,
     (iii) shall be delivered by the Trustee to the Depositary or
     pursuant to the Depositary's instruction and (iv) shall bear
     a  legend substantially to the following effect: "Except  as
     otherwise  provided in Section 2.11 of the  Indenture,  this
     Debt  Security may be transferred, in whole but not in part,
     only  to another nominee of the Depositary or to a successor
     Depositary or to a nominee of such successor Depositary."
  
     (b)   Except as provided in clause (c), notwithstanding  the
     provisions   of  Section  2.05,  the  Global   Security   or
     Securities of a series may be transferred, in whole but  not
     in  part and in the manner provided in Section 2.05, only to
     another nominee of the Depositary for such series, or  to  a
     successor Depositary for such series selected or approved by
     the Company or to a nominee of such successor Depositary.
  
     (c)   If at any time the Depositary for a series of the Debt
     Securities  notifies the Company that  it  is  unwilling  or
     unable  to continue as Depositary for such series or  if  at
     any  time the Depositary for such series shall no longer  be
     registered  or in good standing under the Exchange  Act,  or
     other  applicable statute or regulation, at a time when  the
     Depositary  is required to be so registered to act  as  such
     Depositary and a successor Depositary for such series is not
     appointed  by the Company within 90 days after  the  Company
     receives such notice or becomes aware of such condition,  as
     the  case  may  be,  this Section 2.11 shall  no  longer  be
     applicable  to  the Debt Securities of such series  and  the
     Company  will  execute, and subject  to  Section  2.05,  the
     Trustee will authenticate and deliver the Debt Securities of
     such  series in definitive registered form without  coupons,
     in  authorized denominations, and in an aggregate  principal
     amount  equal to the principal amount of the Global Security
     or  Securities  of such series in exchange for  such  Global
     Security or Securities.  In addition, the Company may at any
     time  determine that the Debt Securities of any series shall
     no  longer be represented by a Global Security or Securities
     and that the provisions of this Section 2.11 shall no longer
     apply to the Debt Securities of such series.  In such event,
     the  Company will execute and, subject to Section 2.05,  the
     Trustee, upon receipt of an Officers' Certificate evidencing
     such  determination  by the Company, will  authenticate  and
     deliver  the  Debt Securities of such series  in  definitive
     registered    form    without   coupons,    in    authorized
     denominations, and in an aggregate principal amount equal to
     the principal amount of the Global Security or Securities of
     such  series  in  exchange  for  such  Global  Security   or
     Securities.   Upon  the exchange of the Global  Security  or
     Securities for such Debt Securities in definitive registered
     form  without  coupons,  in  authorized  denominations,  the
     Global  Security  or  Securities shall be  canceled  by  the
     Trustee.  Such Debt Securities in definitive registered form
     issued  in  exchange for the Global Security  or  Securities
     pursuant to this Section 2.11(c) shall be registered in such
     names   and   in  such  authorized  denominations   as   the
     Depositary,  pursuant to instructions  from  its  direct  or
     indirect  participants  or  otherwise,  shall  instruct  the
     Trustee.  The Trustee shall deliver such Debt Securities  to
     the  Depositary for delivery to the Persons in  whose  names
     such Debt Securities are so registered.
  
                           ARTICLE III
    REDEMPTION OF DEBT SECURITIES AND SINKING FUND PROVISIONS

SECTION 3.01.  Redemption.

           The  Company  may  redeem the Debt Securities  of  any
series  issued hereunder on and after the dates and in accordance
with  the  terms established for such series pursuant to  Section
2.01.
  
SECTION 3.02.  Notice of Redemption.

     (a)  In case the Company shall desire to exercise such right
     to  redeem all or, as the case may be, a portion of the Debt
     Securities  of  any  series  in accordance  with  the  right
     reserved  so  to do, the Company shall, or shall  cause  the
     Trustee to, give notice of such redemption to holders of the
     Debt  Securities of such series to be redeemed  by  mailing,
     first class postage prepaid, a notice of such redemption not
     less  than 30 days and not more than 90 days before the date
     fixed for redemption of that series to such holders at their
     last  addresses  as  they  shall appear  upon  the  Security
     Register  unless a shorter period is specified in  the  Debt
     Securities to be redeemed.  Any notice that is mailed in the
     manner  herein  provided shall be conclusively  presumed  to
     have  been duly given, whether or not the registered  holder
     receives the notice.  In any case, failure duly to give such
     notice  to  the  holder of any Debt Security of  any  series
     designated for redemption in whole or in part, or any defect
     in  the  notice,  shall  not  affect  the  validity  of  the
     proceedings for the redemption of any other Debt  Securities
     of  such  series or any other series.  In the  case  of  any
     redemption of Debt Securities prior to the expiration of any
     restriction on such redemption provided in the terms of such
     Debt  Securities or elsewhere in this Indenture, the Company
     shall  furnish  the  Trustee with an  Officers'  Certificate
     evidencing compliance with any such restriction.  Each  such
     notice  of  redemption  shall specify  the  date  fixed  for
     redemption and the redemption price at which Debt Securities
     of  that  series  are to be redeemed, and shall  state  that
     payment  of the redemption price of such Debt Securities  to
     be redeemed will be made at the Corporate Trust Office, upon
     presentation  and  surrender of such Debt  Securities,  that
     interest  accrued to the date fixed for redemption  will  be
     paid  as specified in said notice, that from and after  said
     date  interest will cease to accrue and that the  redemption
     is  for  a sinking fund, if such is the case.  If less  than
     all  the Debt Securities of a series are to be redeemed, the
     notice  to the holders of Debt Securities of that series  to
     be redeemed in whole or in part shall specify the particular
     Debt  Securities  to  be  so redeemed.   In  case  any  Debt
     Security  is  to be redeemed in part only, the  notice  that
     relates to such Debt Security shall state the portion of the
     principal  amount thereof to be redeemed,  and  shall  state
     that  on  and  after the redemption date, upon surrender  of
     such  Debt  Security, a new Debt Security or Debt Securities
     of  such  series in principal amount equal to the unredeemed
     portion thereof will be issued.
  
     (b)  If less than all the Debt Securities of a series are to
     be  redeemed, the Company shall give the Trustee at least 45
     days' notice in advance of the date fixed for redemption  as
     to  the aggregate principal amount of Debt Securities of the
     series  to  be  redeemed, and thereupon  the  Trustee  shall
     select,  by  lot or in such other manner as  it  shall  deem
     appropriate and fair in its discretion and that may  provide
     for  the  selection  of  a portion  or  portions  (equal  to
     twenty-five  U.S.  dollars ($25) or  any  integral  multiple
     thereof) of the principal amount of such Debt Securities  of
     a  denomination larger than $25, the Debt Securities  to  be
     redeemed and shall thereafter promptly notify the Company in
     writing  of  the  numbers  of  the  Debt  Securities  to  be
     redeemed, in whole or in part.
 
                The  Company  may, if and whenever  it  shall  so
          elect, by delivery of instructions signed on its behalf
          by  its  President or any Vice President, instruct  the
          Trustee or any paying agent to call all or any part  of
          the   Debt  Securities  of  a  particular  series   for
          redemption  and  to  give notice of redemption  in  the
          manner set forth in this Section, such notice to be  in
          the  name of the Company or its own name as the Trustee
          or  such paying agent may deem advisable.  In any  case
          in  which  notice of redemption is to be given  by  the
          Trustee  or  any such paying agent, the  Company  shall
          deliver  or  cause  to be delivered to,  or  permit  to
          remain  with, the Trustee or such paying agent, as  the
          case may be, such Security Register, transfer books  or
          other   records,   or  suitable  copies   or   extracts
          therefrom,  sufficient to enable the  Trustee  or  such
          paying  agent to give any notice by mail  that  may  be
          required under the provisions of this Section.
  
SECTION 3.03.  Payment Upon Redemption.

     (a)   If the giving of notice of redemption shall have  been
     completed as above provided, the Debt Securities or portions
     of Debt Securities of the series to be redeemed specified in
     such notice shall become due and payable on the date and  at
     the place stated in such notice at the applicable redemption
     price, together with interest accrued to the date fixed  for
     redemption, and interest on such Debt Securities or portions
     of  Debt  Securities shall cease to accrue on and after  the
     date  fixed for redemption, unless the Company shall default
     in the payment of such redemption price and accrued interest
     with  respect to any such Debt Security or portion  thereof.
     On  presentation and surrender of such Debt Securities on or
     after  the date fixed for redemption at the place of payment
     specified in the notice, said Debt Securities shall be  paid
     and  redeemed  at the applicable redemption price  for  such
     series,  together with interest accrued thereon to the  date
     fixed  for  redemption (but if the date fixed for redemption
     is  an  Interest  Payment  Date,  the  interest  installment
     payable  on  such  date shall be payable to  the  registered
     holder  at  the  close of business on the applicable  record
     date pursuant to Section 2.03).
  
     (b)   Upon presentation of any Debt Security of such  series
     that  is  to  be  redeemed in part only, the  Company  shall
     execute and the Trustee shall authenticate and the office or
     agency where the Debt Security is presented shall deliver to
     the  holder  thereof, at the expense of the Company,  a  new
     Debt  Security  or Debt Securities of the  same  series,  of
     authorized  denominations in principal amount equal  to  the
     unredeemed portion of the Debt Security so presented.
  
SECTION 3.04.  Sinking Fund.

          The provisions of Sections 3.04, 3.05 and 3.06 shall be
applicable  to  any  sinking  fund for  the  retirement  of  Debt
Securities  of  a  series,  except  as  otherwise  specified   as
contemplated by Section 2.01 for Debt Securities of such series.
  
          The minimum amount of any sinking fund payment provided
for  by  the  terms  of Debt 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 Debt Securities of any series is herein referred to  as
an "optional sinking fund payment."  If provided for by the terms
of  Debt Securities of any series, the cash amount of any sinking
fund  payment may be subject to reduction as provided in  Section
3.05.   Each  sinking  fund  payment  shall  be  applied  to  the
redemption  of Debt Securities of any series as provided  for  by
the terms of Debt Securities of such series.
  
SECTION  3.05.  Satisfaction of Sinking Fund Payments  with  Debt
Securities.

          The Company (i) may deliver Outstanding Debt Securities
of a series (other than any Debt Securities previously called for
redemption) and (ii) may apply as a credit Debt Securities  of  a
series  that  have been redeemed either at the  election  of  the
Company  pursuant to the terms of such Debt Securities or through
the  application  of  permitted optional  sinking  fund  payments
pursuant  to the terms of such Debt Securities, in each  case  in
satisfaction of all or any part of any sinking fund payment  with
respect to the Debt Securities of such series required to be made
pursuant to the terms of such Debt Securities as provided for  by
the terms of such series, provided that such Debt Securities have
not  been previously so credited.  Such Debt Securities shall  be
received  and  credited for such purpose by the  Trustee  at  the
redemption price specified in such Debt Securities for redemption
through  operation  of the sinking fund and the  amount  of  such
sinking fund payment shall be reduced accordingly.
  
SECTION 3.06.  Redemption of Debt Securities for Sinking Fund.

           Not  less  than  45  days prior to each  sinking  fund
payment date for any series of Debt 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 the series, the portion thereof, if any,
that  is  to  be  satisfied  by  delivering  and  crediting  Debt
Securities of that series pursuant to Section 3.05 and the  basis
for   such   credit  and  will,  together  with  such   Officers'
Certificate, deliver to the Trustee any Debt Securities to be  so
delivered.   Not less than 30 days before each such sinking  fund
payment date, the Trustee shall select the Debt Securities to  be
redeemed  upon  such  sinking fund payment  date  in  the  manner
specified  in  Section 3.02 and cause notice  of  the  redemption
thereof  to  be  given in the name of and at the expense  of  the
Company  in  the  manner provided in Section 3.02.   Such  notice
having  been  duly given, the redemption of such Debt  Securities
shall  be made upon the terms and in the manner stated in Section
3.03.
 
                           ARTICLE IV
                    COVENANTS OF THE COMPANY

SECTION 4.01.  Payment of Principal, Premium and Interest.

          The Company will duly and punctually pay or cause to be
paid  the principal of (and premium, if any) and interest on  the
Debt  Securities of that series at the time and place and in  the
manner provided herein and established with respect to such  Debt
Securities.
  
SECTION 4.02.  Maintenance of Office or Agency.

           So  long  as any series of the Debt Securities  remain
Outstanding, the Company agrees to maintain an office  or  agency
with  respect to each such series and at such other  location  or
locations as may be designated as provided in this Section  4.02,
where  (i)  Debt Securities of that series may be  presented  for
payment, (ii) Debt Securities of that series may be presented  as
hereinabove authorized for registration of transfer and exchange,
and  (iii) notices and demands to or upon the Company in  respect
of  the Debt Securities of that series and this Indenture may  be
given  or  served, such designation to continue with  respect  to
such  office or agency until the Company shall, by written notice
signed by its President or a Vice President and delivered to  the
trustee,  designate some other office or agency for such purposes
or  any  of  them.   If  at any time the Company  shall  fail  to
maintain  any  such required office or agency or  shall  fail  to
furnish the Trustee with the address thereof, such presentations,
notices and demands may be made or served at the Corporate  Trust
Office  of  the  Trustee,  and the Company  hereby  appoints  the
Trustee  as its agent to receive all such presentations,  notices
and demands.
  
SECTION 4.03.  Paying Agents.

     (a)   If the Company shall appoint one or more paying agents
     for all or any series of the Debt Securities, other than the
     Trustee,  the Company will cause each such paying  agent  to
     execute  and deliver to the Trustee an instrument  in  which
     such  agent  shall agree with the Trustee,  subject  to  the
     provisions of this Section:
  
           (1)   that  it will hold all sums held by it  as  such
     agent  for the payment of the principal of (and premium,  if
     any)  or  interest  on the Debt Securities  of  that  series
     (whether such sums have been paid to it by the Company or by
     any  other obligor of such Debt Securities) in trust for the
     benefit of the Persons entitled thereto;
  
           (2)   that  it  will give the Trustee  notice  of  any
     failure  by the Company to make any payment of the principal
     of  (and premium, if any) or interest on the Debt Securities
     of that series when the same shall be due and payable;

           (3)   that it will, at any time during the continuance
     of any failure referred to in the preceding paragraph (a)(2)
     above,  upon  the written request of the Trustee,  forthwith
     pay  to the Trustee all sums so held in trust by such paying
     agent; and
  
           (4)   that it will perform all other duties of  paying
     agent as set forth in this Indenture.
 
     (b)   If the Company shall act as its own paying agent  with
     respect to any series of the Debt Securities, it will on  or
     before  each  due date of the principal of (and premium,  if
     any)  or  interest  on Debt Securities of that  series,  set
     aside,  segregate and hold in trust for the benefit  of  the
     Persons  entitled  thereto  a sum  sufficient  to  pay  such
     principal (and premium, if any) or interest so becoming  due
     on  Debt Securities of that series until such sums shall  be
     paid  to  such  Persons or otherwise disposed of  as  herein
     provided  and  will  promptly notify  the  Trustee  of  such
     action,  or any failure by it to take such action.  Whenever
     the  Company  shall have one or more paying agents  for  any
     series  of Debt Securities, it will, prior to each due  date
     of the principal of (and premium, if any) or interest on any
     Debt  Securities  of that series, deposit  with  the  paying
     agent a sum sufficient to pay the principal (and premium, if
     any)  or  interest so becoming due, such sum to be  held  in
     trust for the benefit of the Persons entitled to such
     principal,  premium  or interest, and  (unless  such  paying
     agent  is the Trustee) the Company will promptly notify  the
     Trustee of this action or failure so to act.
  
            Notwithstanding  anything  in  this  Section  to  the
contrary, (i) the agreement to hold sums in trust as provided  in
this  Section is subject to the provisions of Section 11.05,  and
(ii)  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 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 terms and conditions
as  those upon which such sums were held by the Company  or  such
paying  agent; and, upon such payment by any paying agent to  the
Trustee,  such  paying agent shall be released from  all  further
liability with respect to such money.
  
SECTION 4.04.  Appointment to Fill Vacancy in Office of Trustee.

           The  Company, whenever necessary to avoid  or  fill  a
vacancy  in  the office of Trustee, will appoint, in  the  manner
provided in Section 7.10, a Trustee, so that there shall  at  all
times be a Trustee hereunder.
  
SECTION 4.05.  Compliance with Consolidation Provisions.

The  Company  will  not, while any of the Debt Securities  remain
Outstanding,  consolidate  with, or merge  into,  or  merge  into
itself,  or  sell  or  convey all or  substantially  all  of  its
property to any other company unless the provisions of Article  X
are complied with.

SECTION 4.06.  Limitation on Dividends.

     (a)   If  Debt  Securities are issued to an  Illinois  Power
     Trust  or  a  trustee of such trust in connection  with  the
     issuance  of  Trust Securities by such Illinois Power  Trust
     and  (i)  there  shall have occurred any  event  that  would
     constitute an Event of Default or (ii) the Company shall  be
     in  default  with respect to its payment or any  obligations
     under   the   Preferred  Securities  Guarantee   or   Common
     Securities Guarantee relating to such Trust Securities, then
     (x)  the  Company shall not declare or pay any dividend  on,
     make  any distributions with respect to, or redeem, purchase
     or  make a liquidation payment with respect to, any  of  its
     capital  stock, provided, however, the Company  may  declare
     and  pay  a stock dividend where the dividend stock  is  the
     same stock as that on which the dividend is being paid,  (y)
     the   Company  shall  not  make  any  payment  of  interest,
     principal  or  premium, if any, on or repay,  repurchase  or
     redeem any debt securities (including guarantees) issued  by
     the  Company  which rank pari passu with or junior  to  such
     Debt Securities and (z) the Company shall not make guarantee
     payments  with respect to the foregoing (other than pursuant
     to the Preferred Securities Guarantee).
  
     (b)   If  Debt  Securities are issued to an  Illinois  Power
     Trust  or  a  trustee of such trust in connection  with  the
     issuance  of  Trust Securities by such Illinois Power  Trust
     and  the Company shall have given notice of its election  to
     defer  payments  of  interest on  such  Debt  Securities  by
     extending  the  interest payment period as provided  in  any
     indenture  supplemental  hereto  and  such  period,  or  any
     extension thereof, shall be continuing, then (i) the Company
     shall  not  declare  or  pay  any  dividend,  or  make   any
     distributions with respect to, or redeem, purchase or make a
     liquidation  payment with respect to,  any  of  its  capital
     stock, provided, however, the Company may declare and pay  a
     stock dividend where the dividend stock is the same stock as
     that  on  which the dividend is being paid, (ii) the Company
     shall  not  make  any  payment  of  interest,  principal  or
     premium, if any, on or repay, repurchase or redeem any  debt
     securities  (including  guarantees) issued  by  the  Company
     which rank pari passu with or junior to such Debt Securities
     and  (iii) the Company shall not make any guarantee payments
     with  respect to the foregoing (other than pursuant  to  the
     Preferred Securities Guarantee).
  
SECTION 4.07.  Covenants as to Illinois Power Trusts.

           In the event Debt Securities are issued to an Illinois
Power  Trust in connection with the issuance of Trust  Securities
by  such  trust,  for  so  long as such Trust  Securities  remain
outstanding,  the  Company  will  (i)  maintain  100%  direct  or
indirect  ownership  of  the  Common Securities  of  such  trust;
provided,  however, that any permitted successor of  the  Company
under  this  Indenture may succeed to the Company's ownership  of
the  Common Securities, (ii) not cause, as sponsor of such trust,
or  permit,  as  holder of Common Securities of such  trust,  the
dissolution, winding-up or termination of such trust,  except  in
connection with a distribution of Debt Securities as provided  in
the   Declaration   and  in  connection  with  certain   mergers,
consolidations or amalgamations permitted by the Declaration  and
(iii)  use  its  reasonable efforts to cause such  trust  (a)  to
remain a business trust, except in connection with a distribution
of Debt Securities, the redemption of all of the Trust Securities
of  such  Illinois Power Trust or certain mergers, consolidations
or  amalgamations, each as permitted by the Declaration  of  such
Illinois  Power  Trust,  and  (b) to  otherwise  continue  to  be
classified  for United States federal income tax  purposes  as  a
grantor trust.
  
SECTION 4.08.  Corporate Existence.

           The Company will, subject to the provisions of Article
X,  at  all times maintain its corporate existence and  right  to
carry  on  business  and  will  duly  procure  all  renewals  and
extensions thereof, and, to the extent necessary or desirable  in
the  operation  of  its business, will use its  best  efforts  to
maintain,   preserve  and  renew  all  of  its  rights,   powers,
privileges and franchises.
  
                            ARTICLE V
               SECURITYHOLDERS, LISTS AND REPORTS
                 BY THE COMPANY AND THE TRUSTEE

SECTION 5.01.  Company to Furnish Trustee Names and Addresses  of
Securityholders.

           The  Company will furnish or cause to be furnished  to
the  Trustee (a) on a quarterly basis on each regular record date
(as  defined in Section 2.03) a list, in such form as the Trustee
may reasonably require, of the names and addresses of the holders
of each series of Debt Securities as of such regular record date,
provided  that the Company shall not be obligated to  furnish  or
cause  to  furnish such list at any time that the list shall  not
differ in any respect from the most recent list furnished to  the
Trustee by the Company and (b) at such other times as the Trustee
may  request in writing within 30 days after the receipt  by  the
Company  of any such request, a list of similar form and  content
as of a date not more than 15 days prior to the time such list is
furnished; provided, however, that in either case, no  such  list
need  be furnished for any series for which the Trustee shall  be
the Security Registrar.
  
SECTION  5.02.  Preservation Of Information; Communications  With
Securityholders.

     (a)  The Trustee shall preserve, in as current a form as  is
     reasonably practicable, all information as to the names  and
     addresses of the holders of Debt Securities contained in the
     most recent list furnished to it as provided in Section 5.01
     and  as  to  the  names and addresses  of  holders  of  Debt
     Securities  received  by  the Trustee  in  its  capacity  as
     Security Registrar (if acting in such capacity).
  
     (b)   The  Trustee may destroy any list furnished to  it  as
     provided  in  Section 5.01 upon receipt of  a  new  list  so
     furnished.
  
     (c)   Securityholders may communicate as provided in Section
     312(b) of the Trust Indenture Act with other Securityholders
     with  respect to their rights under this Indenture or  under
     the Debt Securities.

SECTION 5.03.  Reports By the Company.

     (a)   The  Company  covenants and agrees to  file  with  the
     Trustee,  within 15 days after the Company  is  required  to
     file  the  same  with the Commission, copies of  the  annual
     reports  and of the information, documents and other reports
     (or  copies of such portions of any of the foregoing as  the
     Commission  may  from time to time by rules and  regulations
     prescribe) that the Company may be required to file with the
     Commission  pursuant to Section 13 or Section 15(d)  of  the
     Exchange  Act;  or, if the Company is not required  to  file
     information, documents or reports pursuant to either of such
     sections,  then to file with the Trustee and the Commission,
     in accordance with the rules and regulations prescribed from
     time  to  time  by the Commission, such of the supplementary
     and periodic information, documents and reports that may  be
     required  pursuant  to Section 13 of the  Exchange  Act,  in
     respect  of  a security listed and registered on a  national
     securities exchange as may be prescribed from time  to  time
     in such rules and regulations.
  
     (b)   The  Company  covenants and agrees to  file  with  the
     Trustee and the Commission, in accordance with the rules and
     regulations prescribed from to time by the Commission,  such
     additional  information, documents and reports with  respect
     to  compliance  by  the  Company  with  the  conditions  and
     covenants provided for in this Indenture as may be  required
     from time to time by such rules and regulations.
  
     (c)   The Company covenants and agrees to transmit by  mail,
     first class postage prepaid, or reputable overnight delivery
     service  that  provides  for evidence  of  receipt,  to  the
     Securityholders,  as their names and addresses  appear  upon
     the  Security  Register, within 30  days  after  the  filing
     thereof with the Trustee, such summaries of any information,
     documents  and reports required to be filed by  the  Company
     pursuant to subsections (a) and (b) of this Section  as  may
     be required by rules and regulations prescribed from time to
     time by the Commission.
  
SECTION 5.04.  Reports by the Trustee.

     (a)   On or before July 15 in each year in which any of  the
     Debt  Securities are Outstanding, the Trustee shall transmit
     by    mail,   first   class   postage   prepaid,   to    the
     Securityholders,  as their names and addresses  appear  upon
     the  Security  Register,  a brief report  dated  as  of  the
     preceding  May  15,  if  and to the  extent  required  under
     Section 313(a) of the Trust Indenture Act.
  
      (b)   The  Trustee  shall comply with Sections  313(b)  and
313(c) of the Trust Indenture Act.
  
     (c)   A copy of each such report shall, at the time of  such
     transmission  to Securityholders, be filed  by  the  Trustee
     with  the  Company, with each stock exchange upon which  any
     Debt Securities are listed (if so listed) and also with  the
     Commission.   The Company agrees to notify the Trustee  when
     any Debt Securities become listed on any stock exchange.

                           ARTICLE VI
           REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                       ON EVENT OF DEFAULT
                                
SECTION 6.01.  Events of Default.

     (a)  Whenever used herein with respect to Debt Securities of
     a  particular series, "Event of Default" means  any  one  or
     more  of  the  following events that  has  occurred  and  is
     continuing:
  
                (1)  the Company defaults in the payment  of  any
          installment of interest upon any of the Debt Securities
          of  that series, as and when the same shall become  due
          and  payable,  and continuance of such  default  for  a
          period  of  30  days; provided, however, that  a  valid
          extension of an interest payment period by the  Company
          in  accordance with the terms of the Debt Securities of
          that  series  shall not constitute  a  default  in  the
          payment of interest for this purpose;

                (2)  the Company defaults in the payment  of  the
          principal of (or premium, if any, on) any of  the  Debt
          Securities  of that series as and when the  same  shall
          become  due  and  payable  whether  at  maturity,  upon
          redemption,  by  declaration or otherwise,  or  in  any
          payment  required  by  any sinking  or  analogous  fund
          established with respect to that series;
  
                (3)  the Company fails to observe or perform  any
          other  of  its covenants or agreements with respect  to
          that  series  contained in this Indenture or  otherwise
          established  with  respect  to  that  series  of   Debt
          Securities pursuant to Section 2.01 for a period of  90
          days  after  the date on which written notice  of  such
          failure, requiring the same to be remedied and  stating
          that  such  notice is a "Notice of Default"  hereunder,
          shall have been given to the Company by the Trustee, by
          registered or certified mail, or to the Company and the
          Trustee  by  the holders of at least 25%  in  principal
          amount  of  the Debt Securities of that series  at  the
          time Outstanding;
  
               (4) the Company, pursuant to or within the meaning
          of  any Bankruptcy Law, (i) commences a voluntary case,
          (ii)  consents  to  the entry of an  order  for  relief
          against  it  in an involuntary case, (iii) consents  to
          the  appointment of a Custodian of it  or  for  all  or
          substantially  all  of its property  or  (iv)  makes  a
          general assignment for the benefit of its creditors;

                (5)  a court of competent jurisdiction enters  an
          order  under any Bankruptcy Law that (i) is for  relief
          against  the  Company  in  an  involuntary  case,  (ii)
          appoints  a  Custodian  of  the  Company  for  all   or
          substantially all of its property, or (iii) orders  the
          liquidation  of  the Company, and the order  or  decree
          remains unstayed and in effect for 90 days; or
  
                (6) in the event Debt Securities are issued to an
          Illinois  Power Trust or other trust of the Company  in
          connection  with  the issuance of Trust  Securities  by
          such  trust,  such  trust  shall  have  voluntarily  or
          involuntarily  dissolved,  wound-up  its  business   or
          otherwise   terminated   its   existence,   except   in
          connection with (i) the distribution of Debt Securities
          to  holders of Trust Securities in liquidation of their
          interests  in  such trust, (ii) the redemption  of  all
          outstanding Trust Securities of such trust,  and  (iii)
          mergers,  consolidations  or  amalgamations,  each   as
          permitted by the Declaration of such trust.
  
     (b)  If an Event of Default described in clauses 1, 2, 3  or
     6  of  this Section 6.01 with respect to Debt Securities  of
     any series at the time outstanding occurs and is continuing,
     unless  the  principal of all the Debt  Securities  of  that
     series shall have already become due and payable, either the
     Trustee  or  the holders of not less than 25%  in  aggregate
     principal amount of the Debt Securities of that series  then
     Outstanding  hereunder, by notice in writing to the  Company
     (and to the Trustee, if given by such Securityholders),  may
     declare  the  principal of all the Debt Securities  of  that
     series to be due and payable immediately, and upon any  such
     declaration the same shall become and be immediately due and
     payable,   notwithstanding  anything   contained   in   this
     Indenture  or  in  the Debt Securities  of  that  series  or
     established with respect to that series pursuant to  Section
     2.01  to the contrary.  If an Event of Default specified  in
     clause  (4)  or  (5)  of  Section  6.01(a)  occurs   or   is
     continuing,  then  the  principal amount  of  all  the  Debt
     Securities  shall ipso facto become and be  immediately  due
     and payable without any declaration or other act on the part
     of the Trustee or any Securityholder.
  
                At  any  time  after the principal  of  the  Debt
          Securities  of that series shall have been so  declared
          due  and payable, and before any judgment or decree for
          the  payment of the moneys due shall have been obtained
          or  entered as hereinafter provided, the holders of 66%
          in aggregate principal amount of the Debt Securities of
          that  series  then  Outstanding hereunder,  by  written
          notice to the Company and the Trustee, may rescind  and
          annul such declaration and its consequences if: (i) the
          Company  has paid or deposited with the Trustee  a  sum
          sufficient to pay all matured installments of  interest
          upon  all  the Debt Securities of that series  and  the
          principal of (and premium, if any, on) any and all Debt
          Securities  of that series that shall have  become  due
          otherwise than by acceleration (with interest upon such
          principal and premium, if any, and, to the extent  that
          such  payment is enforceable under applicable law, upon
          overdue installments of interest, at the rate per annum
          expressed in the Debt Securities of that series to  the
          date of such payment or deposit) and the amount payable
          to the Trustee under Section 7.06, and (ii) any and all
          Events  of  Default with respect to such series,  other
          than the nonpayment of principal on Debt Securities  of
          that  series  that shall not have become due  by  their
          terms,  shall have been remedied or waived as  provided
          in  Section  6.06.   No such rescission  and  annulment
          shall  extend to or shall affect any subsequent default
          or impair any right consequent thereon.
  
     (c)  In case the Trustee shall have proceeded to enforce any
     right  with respect to Debt Securities of that series  under
     this   Indenture  and  such  proceedings  shall  have   been
     discontinued  or  abandoned because of  such  rescission  or
     annulment  or  for  any  other reason  or  shall  have  been
     determined adversely to the Trustee, then and in every  such
     case   the   Company  and  the  Trustee  shall  be  restored
     respectively to their former positions and rights hereunder,
     and  all rights, remedies and powers of the Company and  the
     Trustee  shall  continue as though no such  proceedings  had
     been taken.

SECTION   6.02.   Collection  of  Indebtedness  and   Suits   for
Enforcement by Trustee.
  
     (a)  The Company covenants that (1) in case it shall default
     in  the payment of any installment of interest on any of the
     Debt Securities of a series, or any payment required by  any
     sinking  or analogous fund established with respect to  that
     series  as  and  when  the same shall have  become  due  and
     payable, and such default shall have continued for a  period
     of  90  days, or (2) in case it shall default in the payment
     of the principal of (or premium, if any, on) any of the Debt
     Securities  of a series when the same shall have become  due
     and payable, whether upon maturity of the Debt Securities of
     a   series  or  upon  redemption  or  upon  declaration   or
     otherwise,  then,  upon demand of the Trustee,  the  Company
     will  pay to the Trustee, for the benefit of the holders  of
     the  Debt  Securities of that series, the whole amount  that
     then  shall  have become due and payable on  all  such  Debt
     Securities for principal (and premium, if any) or  interest,
     or  both, as the case may be, with interest upon the overdue
     principal  (and  premium, if any) and (to  the  extent  that
     payment of such interest is enforceable under applicable law
     and,  if  the Debt Securities are held by an Illinois  Power
     Trust, without duplication of any other amounts paid by such
     trust  in  respect  thereof) upon  overdue  installments  of
     interest  at  the  rate  per annum  expressed  in  the  Debt
     Securities  of  that series; and, in addition thereto,  such
     further amount as shall be sufficient to cover the costs and
     expenses of collection and the amount payable to the Trustee
     under Section 7.06.
  
     (b)  If the Company shall fail to pay such amounts forthwith
     upon  such  demand,  the Trustee, in its  own  name  and  as
     trustee of an express trust, shall be entitled and empowered
     to  institute any action or proceedings at law or in  equity
     for  the  collection of the sums so due and unpaid, and  may
     prosecute any such action or proceeding to judgment or final
     decree,  and  may enforce any such judgment or final  decree
     against   the  Company  or  other  obligor  upon  the   Debt
     Securities of that series and collect the moneys adjudged or
     decreed to be payable in the manner provided by law  out  of
     the  property of the Company or other obligor upon the  Debt
     Securities of that series, wherever situated.
  
     (c)   In  case of any receivership, insolvency, liquidation,
     bankruptcy,   reorganization,   readjustment,   arrangement,
     composition or judicial proceedings affecting the Company or
     its  creditors or property, the Trustee shall have power  to
     intervene  in  such proceedings and take any action  therein
     that may be permitted by the court and shall (except as  may
     be  otherwise  provided  by law) be entitled  to  file  such
     proofs  of  claim and other papers and documents as  may  be
     necessary  or advisable in order to have the claims  of  the
     Trustee and of the holders of Debt Securities of such series
     allowed for the entire amount due and payable by the Company
     under  this  Indenture at the date of  institution  of  such
     proceedings  and for any additional amount that  may  become
     due  and  payable  by the Company after such  date,  and  to
     collect and receive any moneys or other property payable  or
     deliverable  on any such claim, and to distribute  the  same
     after  the  deduction of the amount payable to  the  Trustee
     under Section 7.06; and any receiver, assignee or trustee in
     bankruptcy or reorganization is hereby authorized by each of
     the  holders of Debt Securities of such series to make  such
     payments to the Trustee, and, in the event that the  Trustee
     shall  consent  to the making of such payments  directly  to
     such  Securityholders, to pay to the Trustee any amount  due
     it under Section 7.06.
  
     (d)  All rights of action and of asserting claims under this
     Indenture,  or  under  any  of the  terms  established  with
     respect  to Debt Securities of that series, may be  enforced
     by  the  Trustee without the possession of any of such  Debt
     Securities, or the production thereof at any trial or  other
     proceeding relative thereto, and any such suit or 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 payment to the Trustee  of  any
     amounts  due under Section 7.06, be for the ratable  benefit
     of the holders of the Debt Securities of such series.
  
           In case of an Event of Default, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it
by this Indenture by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce  any  of
such  rights,  either  at law or in equity or  in  bankruptcy  or
otherwise,  whether for the specific enforcement of any  covenant
or  agreement  contained  in this Indenture  or  in  aid  of  the
exercise  of any power granted in this Indenture, or  to  enforce
any  other legal or equitable right vested in the Trustee by this
Indenture or by law.
  
           Nothing  contained herein shall be deemed to authorize
the  Trustee  to authorize or consent to or accept  or  adopt  on
behalf   of   any  Securityholder  any  plan  of  reorganization,
arrangement,  adjustment  or  composition  affecting   the   Debt
Securities of that series or the rights of any holder thereof  or
to  authorize the Trustee to vote in respect of the claim of  any
Securityholder in any such proceeding.
  
SECTION 6.03.  Application of Moneys Collected.

           Any  moneys collected by the Trustee pursuant to  this
Article  with  respect to a particular series of Debt  Securities
shall  be  applied in the following order, at the date  or  dates
fixed  by  the Trustee and, in case of the distribution  of  such
moneys  on account of principal (or premium, if any) or interest,
upon  presentation  of the Debt Securities of  that  series,  and
notation thereon of the payment, if only partially paid, and upon
surrender thereof if fully paid:
  
           FIRST:  To  the  payment  of  costs  and  expenses  of
collection  and  of  all amounts payable  to  the  Trustee  under
Section 7.06;
  
           SECOND:  To the payment of all Senior Indebtedness  of
the Company if and to the extent required by Article XIV; and
  
           THIRD:  To  the payment of the amounts  then  due  and
unpaid  upon  Debt Debt Securities of such series  for  principal
(and  premium, if any) and interest, in respect of which  or  for
the  benefit  of  which such money has been  collected,  ratably,
without  preference  or priority of any kind,  according  to  the
amounts  due  and payable on such Debt Securities  for  principal
(and premium, if any) and interest, respectively.

SECTION 6.04.  Limitation on Suits.

           No holder of any Security of any series shall have any
right by virtue or by availing of any provision of this Indenture
to  institute any suit, action or proceeding in equity or at  law
upon  or  under  or  with respect to this Indenture  or  for  the
appointment  of  a receiver or trustee, or for any  other  remedy
hereunder, unless (i) such holder previously shall have given  to
the  Trustee  written notice of an Event of Default  and  of  the
continuance thereof with respect to the Debt Securities  of  such
series   specifying  such  Event  of  Default,  as   hereinbefore
provided;  (ii)  the holders of not less than  25%  in  aggregate
principal  amount  of  the Debt Securities of  such  series  then
Outstanding shall have made written request upon the  Trustee  to
institute  such  action, suit or proceeding in its  own  name  as
trustee  hereunder;  (iii)  such holder  or  holders  shall  have
offered  to  the  Trustee such reasonable  indemnity  as  it  may
require  against  the  costs,  expenses  and  liabilities  to  be
incurred therein or thereby; (iv) the Trustee, for 60 days  after
its receipt of such notice, request and offer of indemnity, shall
have failed to institute any such action, suit or proceeding; and
(v)  during such 60 day period, the holders of not less than  66%
in  principal amount of the Debt Securities of that series do not
give the Trustee a direction inconsistent with the request.

            Notwithstanding  anything  contained  herein  to  the
contrary,  any other provisions of this Indenture, the  right  of
any  holder  of  any  Debt  Security to receive  payment  of  the
principal  of  (and premium, if any) and interest  on  such  Debt
Security,  as  therein provided, on or after the  respective  due
dates  expressed  in  such  Debt Security  (or  in  the  case  of
redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates
or redemption date, shall not be impaired or affected without the
consent  of  such  holder,  and  by  accepting  a  Debt  Security
hereunder it is expressly understood, intended and covenanted  by
the  taker and holder of every Debt Security of such series  with
every other such taker and holder and the Trustee, that no one or
more  holders  of Debt Securities of such series shall  have  any
right  in any manner whatsoever by virtue or by availing  of  any
provision  of this Indenture to affect, disturb or prejudice  the
rights of the holders of any other of such Debt Securities, or to
obtain or seek to obtain priority over or preference to any other
such holder, or to enforce any right under this Indenture, except
in  the  manner  herein provided and for the equal,  ratable  and
common  benefit of all holders of Debt Securities of such series.
For  the  protection  and enforcement of the provisions  of  this
Section,  each and every Securityholder and the Trustee shall  be
entitled  to  such relief as can be given either  at  law  or  in
equity.
  
SECTION  6.05.  Rights and Remedies Cumulative; Delay or Omission
Not Waiver.

     (a)   Except  as  otherwise provided in  Section  2.07,  all
     powers and remedies given by this Article to the Trustee  or
     to  the  Securityholders shall, to the extent  permitted  by
     law,  be  deemed cumulative and not exclusive of  any  other
     powers  and remedies available to the Trustee or the holders
     of   the   Debt  Securities,  by  judicial  proceedings   or
     otherwise, to enforce the performance or observance  of  the
     covenants  and  agreements contained in  this  Indenture  or
     otherwise established with respect to such Debt Securities.

     (b)  No delay or omission of the Trustee or of any holder of
     any  of  the Debt Securities to exercise any right or  power
     accruing  upon any Event of Default occurring and continuing
     as  aforesaid shall impair any such right or power, or shall
     be  construed  to  be  a waiver of any such  default  or  an
     acquiescence  therein; and, subject  to  the  provisions  of
     Section  6.04, every power and remedy given by this  Article
     or  by  law  to  the Trustee or the Securityholders  may  be
     exercised from time to time, and as often as shall be deemed
     expedient, by the Trustee or by the Securityholders.
  
SECTION 6.06.  Control by Securityholders.

          The holders of a majority in aggregate principal amount
of  the  Debt  Securities of any series at the time  Outstanding,
determined in accordance with Section 8.04, 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 such  series;
provided,  however, that such direction shall not be in  conflict
with  any  rule  of  law  or with this  Indenture  or  be  unduly
prejudicial  to the rights of holders of Debt Securities  of  any
other  series  at the time Outstanding determined  in  accordance
with  Section  8.04.  Subject to the provisions of Section  7.01,
the  Trustee shall have the right to decline to follow  any  such
direction  if  the Trustee in good faith shall, by a  Responsible
Officer or Officers of the Trustee, determine that the proceeding
so directed would involve the Trustee in personal liability.  The
holders  of a majority in aggregate principal amount of the  Debt
Securities  of  any  series  at  the  time  Outstanding  affected
thereby,  determined  in accordance with  Section  8.04,  may  on
behalf  of  the  holders of all of the Debt  Securities  of  such
series  waive any past default in the performance of any  of  the
covenants  contained  herein or established pursuant  to  Section
2.01 with respect to such series and its consequences, except (i)
a default in the payment of the principal of, or premium, if any,
or  interest on, any of the Debt Securities of that series as and
when  the  same  shall  become due by  the  terms  of  such  Debt
Securities  otherwise than by acceleration (unless  such  default
has   been  cured  and  a  sum  sufficient  to  pay  all  matured
installments of interest and principal and any premium  has  been
deposited  with the Trustee (in accordance with Section  6.01(c))
or  (ii) a default in the covenants contained in Section 4.06(b).
Upon any such waiver, the default covered thereby shall be deemed
to  be  cured for all purposes of this Indenture and the Company,
the Trustee and the holders of the Debt Securities of such series
shall be restored to their former positions and rights hereunder,
respectively;  but no such waiver shall extend to any  subsequent
or  other default or impair any right consequent thereon.  If the
Property   Trustee  fails  to  enforce  its  rights  under   this
Indenture,   any  holder  of  Preferred  Securities   or   Common
Securities (as defined in the Declaration) may institute a  legal
proceeding  directly against the Company to enforce the  Property
Trustee's rights under this Indenture without first instituting a
legal  proceeding  against  the Property  Trustee  or  any  other
Person.   In  addition, if the Company fails to make interest  or
other  payments  on  Debt Securities of any series  at  the  time
Outstanding  when  due,  any holder of  Preferred  Securities  or
Common  Securities  may  enforce the  Property  Trustee's  Rights
directly against the Company.
  
SECTION 6.07.  Undertaking to Pay Costs.

          All parties to this Indenture agree, and each holder of
any Debt Securities by such holder's acceptance thereof shall  be
deemed  to  have  agreed, that any court may  in  its  discretion
require,  in any suit for the enforcement of any right or  remedy
under this Indenture, or in any suit against the Trustee for  any
action taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of  such
suit, and that such court may in its discretion assess reasonable
costs,  including reasonable attorneys' fees, against  any  party
litigant  in such suit, having due regard to the merits and  good
faith of the claims or defenses made by such party litigant;  but
the  provisions  of  this Section shall not  apply  to  any  suit
instituted  by  the  Trustee,  to  any  suit  instituted  by  any
Securityholder,  or group of Securityholders, holding  more  than
10%  in  aggregate  principal  amount  of  the  Outstanding  Debt
Securities  of  any  series, or to any  suit  instituted  by  any
Securityholder  for  the  enforcement  of  the  payment  of   the
principal  of  (or  premium, if any)  or  interest  on  any  Debt
Security  of  such series, on or after the respective  due  dates
expressed in such Debt Security or established pursuant  to  this
Indenture.
 
                           ARTICLE VII
                     CONCERNING THE TRUSTEE

SECTION 7.01.  Certain Duties and Responsibilities of Trustee.

     (a)   The  Trustee, prior to the occurrence of an  Event  of
     Default with respect to the Debt Securities of a series  and
     after  the  curing of all Events of Default with respect  to
     the  Debt  Securities of that series that may have occurred,
     shall  undertake  to  perform  with  respect  to  the   Debt
     Securities  of such series such duties and only such  duties
     as  are  specifically set forth in this  Indenture,  and  no
     implied  covenants shall be read into this Indenture against
     the  Trustee.  In case an Event of Default with  respect  to
     the  Debt Securities of a series has occurred (that has  not
     been  cured  or  waived), the Trustee  shall  exercise  with
     respect to Debt Securities of that series such of the rights
     and  powers vested in it by this Indenture, and use the same
     degree of care and skill in their exercise, as a prudent man
     would exercise or use under the circumstances in the conduct
     of his own affairs.
  
     (b)   no  provision of this Indenture shall be construed  to
     relieve  the  Trustee from liability for its  own  negligent
     action, its own negligent failure to act, or its own willful
     misconduct, except that:
  
                    (1)   prior to the occurrence of an Event  of
               Default with respect to the Debt Securities  of  a
               series and after the curing or waiving of all such
               Events of Default with respect to that series that
               may have occurred:
  
                (A)        the  duties  and  obligations  of  the
     Trustee  shall, with respect to the Debt Securities of  such
     series,  be  determined solely by the express provisions  of
     this  Indenture, and the Trustee shall not  be  liable  with
     respect to the Debt Securities of such series except for the
     performance   of   such  duties  and  obligations   as   are
     specifically  set forth in this Indenture,  and  no  implied
     covenants  or obligations shall be read into this  Indenture
     against the Trustee; and
  
                (B)       in the absence of bad faith on the part
     of  the  Trustee, the Trustee may with respect to  the  Debt
     Securities of such series conclusively rely, as to the truth
     of  the  statements  and  the correctness  of  the  opinions
     expressed   therein,  upon  any  certificates  or   opinions
     furnished  to the Trustee and conforming to the requirements
     of  this Indenture; but in the case of any such certificates
     or  opinions  that by any provision hereof are  specifically
     required  to be furnished to the Trustee, the Trustee  shall
     be  under a duty to examine the same to determine whether or
     not they conform to the requirement of this Indenture;
  
           (2)  the Trustee shall not be liable for any error  of
     judgment  made  in  good faith by a Responsible  Officer  or
     Responsible  Officers of the Trustee,  unless  it  shall  be
     proved  that the Trustee, was negligent in ascertaining  the
     pertinent facts;
  
                    (3)    the  Trustee shall not be liable  with
               respect to any action taken or omitted to be taken
               by  it  in  good  faith  in  accordance  with  the
               direction  of  the  holders of  not  less  than  a
               majority   in   principal  amount  of   the   Debt
               Securities  of any series at the time  Outstanding
               relating   to  the  time,  method  and  place   of
               conducting any proceeding for any remedy available
               to  the Trustee, or exercising any trust or  power
               conferred  upon  the Trustee under this  Indenture
               with  respect  to  the  Debt  Securities  of  that
               series; and
  
                   (4)   None of the provisions contained in this
               Indenture  shall require the Trustee to expend  or
               risk  its  own  funds or otherwise incur  personal
               financial liability in the performance of  any  of
               its duties or in the exercise of any of its rights
               or  powers,  if  there  is reasonable  ground  for
               believing  that  the repayment of  such  funds  or
               liability  is not reasonably assured to  it  under
               the  terms of this Indenture or adequate indemnity
               against such risk is not reasonably assured to it.
  
SECTION 7.02.  Certain Rights of Trustee.

          Except as otherwise provided in Section 7.01:
  
     (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,
     consent,  order, approval, bond, security or other paper  or
     document  believed  by it to be genuine  and  to  have  been
     signed or presented by the proper party or parties;
  
     (b)   any request, direction, order or demand of the Company
     mentioned herein shall be sufficiently evidenced by a  Board
     Resolution   or  an  Officers'  Certificate  (unless   other
     evidence  in  respect  thereof  is  specifically  prescribed
     herein);
 
     (c)   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 or suffered or omitted hereunder  in  good
     faith and in reliance thereon;
  
     (d)   the  Trustee shall be under no obligation to  exercise
     any  of  the rights or powers vested in it by this Indenture
     at   the   request,  order  or  direction  of  any  of   the
     Securityholders,   pursuant  to  the  provisions   of   this
     Indenture, unless such Securityholders shall have offered to
     the  Trustee  reasonable security or indemnity  against  the
     costs, expenses and liabilities that may be incurred therein
     or thereby; nothing contained herein shall, however, relieve
     the  Trustee  of the obligation, upon the occurrence  of  an
     Event  of  Default  with respect to a  series  of  the  Debt
     Securities  (that has not been cured or waived) to  exercise
     with  respect to Debt Securities of that series such of  the
     rights and powers vested in it by this Indenture, and to use
     the  same degree of care and skill in their exercise,  as  a
     prudent man would exercise or use under the circumstances in
     the conduct of his own affairs;

     (e)  the Trustee shall not be liable for any action taken or
     omitted to be taken by it in good faith and believed  by  it
     to  be  authorized  or within the discretion  or  rights  or
     powers conferred upon it by this Indenture;
  
     (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, consent, order,  approval,  bond,
     security, or other papers or documents, unless requested  in
     writing  so to do by the holders of not less than a majority
     in  principal  amount of the Outstanding Debt Securities  of
     the  particular  series  affected  thereby  (determined   as
     provided  in Section 8.04); provided, however, that  if  the
     payment  within  a  reasonable time to the  Trustee  of  the
     costs, expenses or liabilities likely to be incurred  by  it
     in  the  making of such investigation is, in the opinion  of
     the  Trustee, not reasonably assured to the Trustee  by  the
     security afforded to it by the terms of this Indenture,  the
     Trustee may require reasonable indemnity against such costs,
     expenses or liabilities as a condition to so proceeding. The
     reasonable expense of every such examination shall  be  paid
     by  the  Company or, if paid by the Trustee, shall be repaid
     by the Company upon demand;
  
     (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;
  
     (h)   whenever  in the administration of this Indenture  the
     Trustee  shall deem it desirable that a matter be proved  or
     established  prior  to  taking, suffering  or  omitting  any
     action  hereunder,  the Trustee (unless  other  evidence  be
     herein  specifically prescribed) may, in the absence of  bad
     faith on its part, rely upon an Officers' Certificate; and
  
     (i)  the Trustee shall not be required 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.
  
SECTION  7.03.  Trustee Not Responsible for Recitals or  Issuance
of Debt Securities.

     (a)    The  recitals  contained  herein  and  in  the   Debt
     Securities shall be taken as the statements of the  Company,
     and   the   Trustee  assumes  no  responsibility   for   the
     correctness of the same.
  
     (b)  The Trustee makes no representations as to the validity
     or sufficiency of this Indenture or of the Debt Securities.

     (c)   The  Trustee shall not be accountable for the  use  or
     application by the Company of any of the Debt Securities  or
     of  the proceeds of such Debt Securities, or for the use  or
     application  of  any  moneys paid over  by  the  Trustee  in
     accordance   with  any  provision  of  this   Indenture   or
     established  pursuant to Section 2.01, or  for  the  use  or
     application of any moneys received by any paying agent other
     than the Trustee.

SECTION 7.04.  May Hold Debt Securities.

           The Trustee or any paying agent or Security Registrar,
in  its individual or any other capacity, may become the owner or
pledgee of Debt Securities with the same rights it would have  if
it were not Trustee, paying agent or Security Registrar.

SECTION 7.05.  Moneys Held in Trust.

           Subject to the provisions of Section 11.05, all moneys
received  by the Trustee shall, until used or applied  as  herein
provided,  be held in trust for the purposes for which they  were
received,  but 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 moneys received by  it  hereunder
except such as it may agree with the Company to pay thereon.
  
SECTION 7.06.  Compensation and Reimbursement.

     (a)  The Company covenants and agrees to pay to the Trustee,
     and  the  Trustee  shall  be entitled  to,  such  reasonable
     compensation (which shall not be limited by any provision of
     law in regard to the compensation of a trustee of an express
     trust), as the Company and the Trustee may from time to time
     agree  in  writing, for all services rendered by it  in  the
     execution  of the trusts hereby created and in the  exercise
     and performance of any of the powers and duties hereunder of
     the  Trustee,  and,  except as otherwise expressly  provided
     herein,  the Company will pay or reimburse the Trustee  upon
     its  request for all reasonable expenses, disbursements  and
     advances incurred or made by the Trustee in accordance  with
     any  of  the  provisions  of this Indenture  (including  the
     reasonable  compensation and the expenses and  disbursements
     of  its  counsel  and of all Persons not  regularly  in  its
     employ) except any such expense, disbursement or advance  as
     may  arise  from its negligence or bad faith.   The  Company
     also  covenants to indemnify the Trustee (and its  officers,
     agents,  directors  and  employees)  for,  and  to  hold  it
     harmless  against, any loss, liability or  expense  incurred
     without  negligence or bad faith on the part of the  Trustee
     and  arising out of or in connection with the acceptance  or
     administration  of  this  trust,  including  the  costs  and
     expenses  of defending itself against any claim of liability
     in the premises.
  
     (b)   The  obligations of the Company under this Section  to
     compensate and indemnify the Trustee and to pay or reimburse
     the  Trustee for expenses, disbursements and advances  shall
     constitute  additional  indebtedness  hereunder  and   shall
     survive  the  satisfaction and discharge of this  Indenture.
     Such  additional  indebtedness shall be secured  by  a  lien
     prior  to that of the Debt Securities upon all property  and
     funds held or collected by the Trustee as such, except funds
     held  in  trust for the benefit of the holders of particular
     Debt Securities.

SECTION 7.07.  Reliance on Officers' Certificate.

           Except as otherwise provided in Section 7.01, whenever
in  the  administration of the provisions of this  Indenture  the
Trustee  shall deem it necessary or desirable that  a  matter  be
proved or established prior to taking or suffering or omitting to
take any action hereunder, such matter (unless other evidence  in
respect  thereof be herein specifically prescribed) may,  in  the
absence of negligence or bad faith on the part of the Trustee, be
deemed  to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee and such certificate, in the
absence  of  negligence or bad faith on the part of the  Trustee,
shall  be  full  warrant  to the Trustee for  any  action  taken,
suffered  or  omitted to be taken by it under the  provisions  of
this Indenture upon the faith thereof.
  
SECTION 7.08.  Qualification; Conflicting Interests.

           If  the  Trustee has or shall acquire any "conflicting
interest"  within  the meaning of Section  310(b)  of  the  Trust
Indenture Act, the Trustee and the Company shall in all  respects
comply  with  the  provisions  of Section  310(b)  of  the  Trust
Indenture Act.
  
SECTION 7.09.  Corporate Trustee Required; Eligibility.

           There shall at all times be a Trustee with respect  to
the Debt Securities issued hereunder which shall at all times  be
a  corporation organized and doing business under the laws of the
United States of America or any State or Territory thereof or  of
the  District  of  Columbia,  or a corporation  or  other  Person
permitted  to act as trustee by the Commission, authorized  under
such  laws to exercise corporate trust powers, having a  combined
capital  and  surplus  of at least fifty  million  U.S.   dollars
($50,000,000),  and  subject  to supervision  or  examination  by
Federal,  State,  Territorial or District of Columbia  authority.
If  such  corporation  publishes reports of  condition  at  least
annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this
Section,  the  combined capital and surplus of  such  corporation
shall  be  deemed to be its combined capital and surplus  as  set
forth  in its most recent report of condition so published.   The
Company  may  not,  nor  may any Person  directly  or  indirectly
controlling,  controlled  by, or under common  control  with  the
Company, serve as Trustee.  In case at any time the Trustee shall
cease  to be eligible in accordance with the provisions  of  this
Section,  the Trustee shall resign immediately in the manner  and
with the effect specified in Section 7.10.

SECTION 7.10.  Resignation and Removal; Appointment of Successor.

     (a)   The Trustee or any successor hereafter appointed,  may
     at  any  time resign with respect to the Debt Securities  of
     one  or more series by giving written notice thereof to  the
     Company  and by transmitting notice of resignation by  mail,
     first class postage prepaid, to the Securityholders of  such
     series,  as  their  names  and  addresses  appear  upon  the
     Security   Register.   Upon   receiving   such   notice   of
     resignation, the Company shall promptly appoint a  successor
     trustee  with respect to Debt Securities of such  series  by
     written instrument, in duplicate, executed by order  of  the
     Board  of  Directors, one copy of which instrument shall  be
     delivered  to  the resigning Trustee and  one  copy  to  the
     successor trustee.  If no successor trustee shall have  been
     so  appointed and have accepted appointment within  30  days
     after  the  mailing  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  Debt  Securities  of  such  series,   or   any
     Securityholder  of  that series who has  been  a  bona  fide
     holder  of a Debt Security or Debt Securities for  at  least
     six  months may, subject to the provisions of Section  6.08,
     on  behalf  of  himself and all others  similarly  situated,
     petition  any such court for the appointment of a  successor
     trustee.   Such  court may thereupon after such  notice,  if
     any,  as  it  may  deem  proper  and  prescribe,  appoint  a
     successor trustee.
  
      (b)   In  case  at any time any one of the following  shall
occur:
  
                (1)  the  Trustee shall fail to comply  with  the
          provisions  of  subsection (a) of  Section  7.08  after
          written  request  therefor by the  Company  or  by  any
          Securityholder  who has been a bona fide  holder  of  a
          Debt  Security  or  Debt Securities for  at  least  six
          months; or
  
                (2)  the  Trustee shall cease to be  eligible  in
          accordance  with  the provisions of  Section  7.09  and
          shall fail to resign after written request therefor  by
          the Company or by any such Securityholder; or
  
                (3) the Trustee shall become incapable of acting,
          or  shall  be  adjudged  a bankrupt  or  insolvent,  or
          commence  a  voluntary  bankruptcy  proceeding,  or   a
          receiver  of  the Trustee or of its property  shall  be
          appointed or consented to, 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,
          the  Company may remove the Trustee with respect to all
          Debt  Securities  and  appoint a successor  trustee  by
          written instrument, in duplicate, executed by order  of
          the  Board  of Directors, one copy of which  instrument
          shall  be delivered to the Trustee so removed  and  one
          copy  to  the  successor trustee, or,  subject  to  the
          provisions  of Section 6.08, unless the Trustee's  duty
          to   resign   is   stayed  as  provided   herein,   any
          Securityholder  who has been a bona fide  holder  of  a
          Debt  Security  or  Debt Securities for  at  least  six
          months  may,  on behalf of that holder and  all  others
          similarly  situated, petition any  court  of  competent
          jurisdiction  for the removal of the  Trustee  and  the
          appointment  of  a successor trustee.  Such  court  may
          thereupon  after such notice, if any, as  it  may  deem
          proper and prescribe, remove the Trustee and appoint  a
          successor trustee.
  
     (c)  The holders of a majority in aggregate principal amount
     of the Debt Securities of any series at the time Outstanding
     may  at  any  time remove the Trustee with respect  to  such
     series  by so notifying the Trustee and the Company and  may
     appoint a successor Trustee for such series with the consent
     of the Company.
  
     (d)    Any  resignation  or  removal  of  the  Trustee   and
     appointment of a successor trustee with respect to the  Debt
     Securities of a series pursuant to any of the provisions  of
     this  Section  shall  become effective  upon  acceptance  of
     appointment by the successor trustee as provided in  Section
     7.11.
  
     (e)   Any  successor  trustee  appointed  pursuant  to  this
     Section may be appointed with respect to the Debt Securities
     of one or more series or all of such series, and at any time
     there  shall  be only one Trustee with respect to  the  Debt
     Securities of any particular series.
  
SECTION 7.11.  Acceptance of Appointment By Successor.

     (a)   In  case  of the appointment hereunder of a  successor
     trustee  with  respect  to all Debt 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 Debt Securities of one or  more
     (but not all) series, the Company, the retiring Trustee  and
     each  successor trustee with respect to the Debt  Securities
     of one or more series shall execute and deliver an indenture
     supplemental  hereto  wherein each successor  trustee  shall
     accept  such  appointment and which (1) shall  contain  such
     provisions  as shall be necessary or desirable  to  transfer
     and  confirm to, and to vest in, each successor trustee  all
     the  rights,  powers,  trusts and  duties  of  the  retiring
     Trustee with respect to the Debt Securities of that or those
     series  to  which the appointment of such successor  trustee
     relates,  (2)  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 Debt Securities of that or those series
     as  to  which  the  retiring Trustee is not  retiring  shall
     continue to be vested in the retiring Trustee, and (3) shall
     add to or change any of the provisions of this Indenture  as
     shall  be  necessary  to  provide  for  or  facilitate   the
     administration  of the trusts hereunder  by  more  than  one
     Trustee, it being understood that nothing herein or in  such
     supplemental   indenture  shall  constitute  such   Trustees
     co-trustees of the same trust, 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 that no Trustee shall be responsible  for
     any  act  or failure to act on the part of any other Trustee
     hereunder;  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, such retiring Trustee shall with  respect
     to  the Debt Securities of that or those series to which the
     appointment  of  such  successor  trustee  relates  have  no
     further responsibility for the exercise of rights and powers
     or  for the performance of the duties and obligations vested
     in the Trustee under this Indenture, 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 Debt 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,  to
     the  extent contemplated by such supplemental indenture, the
     property  and money held by such retiring Trustee  hereunder
     with  respect to the Debt 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.
  
     (e)   Upon acceptance of appointment by a successor  trustee
     as  provided  in  this Section, the Company  shall  transmit
     notice of the succession of such trustee hereunder by  mail,
     first  class  postage  prepaid, to the  Securityholders,  as
     their names and addresses appear upon the Security Register.
     If the Company fails to transmit such notice within ten days
     after  acceptance  of appointment by the successor  trustee,
     the  successor  trustee  shall  cause  such  notice  to   be
     transmitted at the expense of the Company.
  
SECTION 7.12.  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 the corporate trust  business  of  the
Trustee,  shall  be  the  successor  of  the  Trustee  hereunder,
provided  that  such  corporation shall be  qualified  under  the
provisions  of Section 7.08 and eligible under the provisions  of
Section 7.09, without the execution or filing of any paper or any
further  act  on the part of any of the parties hereto,  anything
herein  to  the  contrary  notwithstanding.   In  case  any  Debt
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 Debt Securities so  authenticated
with  the  same  effect as if such successor trustee  had  itself
authenticated such Debt Securities.
  
SECTION  7.13.   Preferential Collection of  Claims  Against  the
Company.

           The  Trustee shall comply with Section 311(a)  of  the
Trust   Indenture   Act,  excluding  any  creditor   relationship
described  in  Section  311(b) of the  Trust  Indenture  Act.   A
Trustee  who  has resigned or been removed shall  be  subject  to
Section  311(a) of the Trust Indenture Act to the extent included
therein.
  
                          ARTICLE VIII
                 CONCERNING THE SECURITYHOLDERS

SECTION 8.01.  Evidence of Action by Securityholders.

           Whenever  in  this Indenture it is provided  that  the
holders  of  a  majority  or specified  percentage  in  aggregate
principal  amount  of the Debt Securities of a particular  series
may  take  any  action (including the making  of  any  demand  or
request,  the  giving of any notice, consent  or  waiver  or  the
taking  of any other action), the fact that at the time of taking
any  such  action  the  holders of  such  majority  or  specified
percentage of that series have joined therein may be evidenced by
any  instrument  or any number of instruments  of  similar  tenor
executed  by  such holders of Debt Securities of that  series  in
Person or by agent or proxy appointed in writing.
  
           If  the Company shall solicit from the Securityholders
of  any  series  any  request, demand, authorization,  direction,
notice, consent, waiver or other action, the Company may, at  its
option,  as evidenced by an Officers' Certificate, fix in advance
a   record  date  for  such  series  for  the  determination   of
Securityholders   (entitled  to  give   such   request,   demand,
authorization,  direction,  notice,  consent,  waiver  or   other
action,  but the Company shall have no obligation to do  so.   If
such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action) may be  given
before or after the record date, but only the Securityholders  of
record  at  the  close of business on the record  date  shall  be
deemed  to  be  Securityholders for the purposes  of  determining
whether   Securityholders   of  the   requisite   proportion   of
Outstanding  Debt  Securities of that series have  authorized  or
agreed  or  consented  to  such request,  demand,  authorization,
direction, notice, consent, waiver or other action, and for  that
purpose  the Outstanding Debt Securities of that series shall  be
computed as of the record date; provided, however, that  no  such
authorization,  agreement or consent by such  Securityholders  on
the  record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not  later
than six months after the record date.
  
SECTION 8.02.  Proof of Execution by Securityholders.

          Subject to the provisions of Section 7.01, proof of the
execution of any instrument by a Securityholder (such proof  will
not  require notarization) or his agent or proxy and proof of the
holding  by  any  Person of any of the Debt Securities  shall  be
sufficient if made in the following manner:
  
     (a)   The fact and date of the execution by any such  Person
     of  any  instrument  may be proved in any reasonable  manner
     acceptable to the Trustee.
  
     (b)  The ownership of Debt Securities shall be proved by the
     Debt  Security  Register of such Debt  Securities  or  by  a
     certificate of the Debt Security Registrar thereof.
  
     (c)   The Trustee may require such additional proof  of  any
     matter  referred  to  in  this  Section  as  it  shall  deem
     necessary.
  
SECTION 8.03.  Who May be Deemed Owners.

           Prior  to  the  due  presentment for  registration  of
transfer  of  any  Debt Security, the Company, the  Trustee,  any
paying  agent and any Debt Security Registrar may deem and  treat
the  Person  in whose name such Debt Security shall be registered
upon  the books of the Company as the absolute owner of such Debt
Security (whether or not such Debt Security shall be overdue  and
notwithstanding any notice of ownership or writing  thereon  made
by anyone other than the Debt Security Registrar) for the purpose
of  receiving  payment  of or on account  of  the  principal  of,
premium, if any, and (subject to Section 2.03) interest  on  such
Debt Security and for all other purposes; and neither the Company
nor  the  Trustee  nor  any paying agent nor  any  Debt  Security
Registrar shall be affected by any notice to the contrary.

SECTION   8.04.   Certain  Debt  Securities  Owned   by   Company
Disregarded.

           In  determining whether the holders of  the  requisite
aggregate  principal amount of Debt Securities  of  a  particular
series have concurred in any direction, consent waiver under this
Indenture, the Debt Securities of that series that are  owned  by
the  Company or any other obligor on the Debt Securities of  that
series  or  by  any Person directly or indirectly controlling  or
controlled  by  or under common control with the Company  or  any
other  obligor  on  the Debt Securities of  that  series  (except
Illinois Power Trust) shall be disregarded and deemed not  to  be
Outstanding  for  the  purpose of any such determination,  except
that for the purpose of determining whether the Trustee shall  be
protected  in relying on any such direction, consent  or  waiver,
only  Debt  Securities of such series that the  Trustee  actually
knows  are so owned shall be so disregarded.  The Debt Securities
so  owned that have been pledged in good faith may be regarded as
Outstanding  for  the purposes of this Section,  if  the  pledgee
shall  establish to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Debt Securities and that the
pledgee  is  not  a Person directly or indirectly controlling  or
controlled by or under direct or indirect common control with the
Company  or any such other obligor.  In case of a dispute  as  to
such right, any decision by the Trustee taken upon the advice  of
counsel shall be full protection to the Trustee.
  
SECTION 8.05.  Actions Binding on Future Securityholders.

           At any time prior to (but not after) the evidencing to
the  Trustee, as provided in Section 8.01, of the taking  of  any
action  by  the holders of a majority or specified percentage  in
aggregate principal amount of the Debt Securities of a particular
series  in  connection with such action, any  holder  of  a  Debt
Security  of  that  series that is shown by the  evidence  to  be
included  in  the  Debt  Securities the  holders  of  which  have
consented to such action may, by filing written notice  with  the
Trustee,  and upon proof of holding as provided in Section  8.02,
revoke  such action so far as concerns such Debt Security. Except
as  aforesaid, any such action taken by the holder  of  any  Debt
Security  shall  be conclusive and binding upon such  holder  and
upon all future holders and owners of such Debt Security, and  of
any Debt Security issued in exchange therefor, on registration of
transfer thereof or in place thereof, irrespective of whether  or
not  any  notation  in  regard thereto is  made  upon  such  Debt
Security.   Any  action taken by the holders  of  a  majority  or
specified  percentage in aggregate principal amount of  the  Debt
Securities of a particular series in connection with such  action
shall  be conclusively binding upon the Company, the Trustee  and
the holders of all the Debt Securities of that series.

                           ARTICLE IX
                     SUPPLEMENTAL INDENTURES

SECTION  9.01.   Supplemental Indentures Without the  Consent  of
Securityholders.

           In  addition  to any supplemental indenture  otherwise
authorized  by  this Indenture, the Company and the  Trustee  may
from  time  to  time and at any time enter into an  indenture  or
indentures  supplemental  hereto  (which  shall  conform  to  the
provisions of the Trust Indenture Act as then in effect), without
the  consent  of  the Securityholders, for one  or  more  of  the
following purposes:
  
     (1)   to  cure any ambiguity, defect or inconsistency herein
     or in the Debt Securities of any series;
  
     (2)  to comply with Article X;
  
     (3)   to  provide  for  uncertificated  Debt  Securities  in
     addition to or in place of certificated Debt Securities;
  
     (4)   to add to the covenants of the Company for the benefit
     of  the holders of all or any series of Debt Securities (and
     if such covenants are to be for the benefit of less than all
     series  of Debt 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;
  
     (5)   to  add  to,  delete from, or revise  the  conditions,
     limitations and restrictions on the authorized amount, terms
     or  purposes of issue, authentication and delivery  of  Debt
     Securities, as herein set forth;
  
     (6)   to make any change that does not adversely affect  the
     rights of any Securityholder in any material respect; or
  
     (7)   to provide for the issuance of and establish the  form
     and  terms  and  conditions of the Debt  Securities  of  any
     series as provided in Section 2.01, to establish the form of
     any  certifications required to be furnished pursuant to the
     terms of this Indenture or any series of Debt Securities, or
     to  add  to the rights of the holders of any series of  Debt
     Securities.
 
           The  Trustee  is hereby authorized to  join  with  the
Company in the execution of any such supplemental indenture,  and
to  make any further appropriate agreements and stipulations that
may  be therein contained, but the Trustee shall not be obligated
to  enter  into any such supplemental indenture that affects  the
Trustee's  own rights, duties or immunities under this  Indenture
or otherwise.

          Any supplemental indenture authorized by the provisions
of  this  Section may be executed by the Company and the  Trustee
without  the consent of the holders of any of the Debt Securities
at  the time Outstanding notwithstanding any of the provisions of
Section 9.02.

SECTION   9.02.    Supplemental  Indentures   With   Consent   of
Securityholders.

           With  the  consent (evidenced as provided  in  Section
8.01)  of the holders of not less than 66% in aggregate principal
amount  of  the Debt Securities of each series affected  by  such
supplemental indenture or indentures at the time Outstanding, the
Company,  when authorized by a Board Resolution, and the  Trustee
may from time to time and at any time enter into an indenture  or
indentures  supplemental  hereto  (which  shall  conform  to  the
provisions of the Trust Indenture Act as then in effect) for  the
purpose of adding any provisions to or changing in any manner  or
eliminating  any of the provisions of this Indenture  or  of  any
supplemental indenture or of modifying in any manner not  covered
by  Section 9.01 the rights of the holders of the Debt Securities
of  such series under this Indenture; provided, however, that  no
such  supplemental indenture shall, without the  consent  of  the
holders  of  each  Debt  Security then Outstanding  and  affected
thereby, (i) extend the fixed maturity of any Debt Securities  of
any series, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce
any  premium  payable  upon the redemption thereof,  without  the
consent  of the holder of each Debt Security so affected or  (ii)
reduce  the aforesaid percentage of Debt Securities, the  holders
of  which  are  required  to  consent to  any  such  supplemental
indenture.
  
           It  shall  not  be necessary for the  consent  of  the
Securityholders of any series affected thereby under this Section
to  approve  the  particular  form of any  proposed  supplemental
indenture,  but  it  shall be sufficient if  such  consent  shall
approve the substance thereof.
  
SECTION 9.03.  Effect of Supplemental Indentures.

           Upon  the  execution  of  any  supplemental  indenture
pursuant  to the provisions of this Article or of Section  10.01,
this  Indenture  shall, with respect to such series,  be  and  be
deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and
immunities  under this Indenture of the Trustee, the Company  and
the  holders  of  Debt Securities of the series affected  thereby
shall  thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and
all  the  terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions  of
this Indenture for any and all purposes.
  
SECTION   9.04.    Debt  Securities  Affected   by   Supplemental
Indentures.

            Debt  Securities  of  any  series,  affected   by   a
supplemental  indenture, authenticated and  delivered  after  the
execution  of  such  supplemental  indenture  pursuant   to   the
provisions  of  this  Article or of Section  10.01,  may  bear  a
notation  in  form  approved by the Company, provided  such  form
meets the requirements of any securities exchange upon which such
series  may  be  listed, as to any matter provided  for  in  such
supplemental  indenture.  If the Company shall so determine,  new
Debt Securities of that series so modified as to conform, in  the
opinion  of  the  Board  of Directors  of  the  Company,  to  any
modification   of   this  Indenture  contained   in   any,   such
supplemental   indenture  may  be  prepared   by   the   Company,
authenticated  by the Trustee and delivered in exchange  for  the
Debt Securities of that series then Outstanding.
  
SECTION 9.05.  Execution of Supplemental Indentures.

          Upon the request of the Company, accompanied by a Board
Resolution  authorizing the execution of  any  such  supplemental
indenture,  and upon the filing with the Trustee of  evidence  of
the  consent  of Securityholders required to consent  thereto  as
aforesaid,  the  Trustee  shall join  with  the  Company  in  the
execution of such supplemental indenture unless such supplemental
indenture  affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee  may
in  its discretion but shall not be obligated to enter into  such
supplemental  indenture.  The Trustee, subject to the  provisions
of  Section 7.01, may receive an Opinion of Counsel as conclusive
evidence  that  any supplemental indenture executed  pursuant  to
this Article is authorized or permitted by, and conforms to,  the
terms of this Article and that it is proper for the Trustee under
the provisions of this Article to join in the execution thereof.
  
           Promptly  after the execution by the Company  and  the
Trustee  of any supplemental indenture pursuant to the provisions
of  this Section, the Trustee shall transmit by mail, first class
postage  prepaid,  a notice, setting forth in general  terms  the
substance  of such supplemental indenture, to the Securityholders
of  all  series  affected thereby as their  names  and  addresses
appear  upon  the  Debt Security Register.  Any  failure  of  the
Trustee  to  mail such notice, or any defect therein, shall  not,
however,  in  any way impair or affect the validity of  any  such
supplemental indenture.
  
                            ARTICLE X
                      SUCCESSOR CORPORATION

SECTION 10.01. Company May Consolidate, Etc.

           Nothing contained in this Indenture or in any  of  the
Debt Securities shall prevent any consolidation or merger of  the
Company  with  or  into  any  other corporation  or  corporations
(whether  or  not  affiliated with the  Company),  or  successive
consolidations or mergers in which the Company or  its  successor
or  successors shall be a party or parties, or shall prevent  any
sale,  conveyance, transfer or other disposition of the  property
of  the Company or its successor or successors as an entirety, or
substantially  as an entirety, to any other corporation  (whether
or   not  affiliated  with  the  Company  or  its  successor   or
successors) authorized to acquire and operate the same; provided,
however,  the Company hereby covenants and agrees that, upon  any
such  consolidation, merger, sale, conveyance, transfer or  other
disposition,  the  due and punctual payment of the  principal  of
(premium,  if any) and interest on all of the Debt Securities  of
all series in accordance with the terms of each series, according
to   their  tenor  and  the  due  and  punctual  performance  and
observance of all the covenants and conditions of this  Indenture
with  respect to each series or established with respect to  such
series  pursuant to Section 2.01 to be kept or performed  by  the
Company,  shall  be expressly assumed, by supplemental  indenture
(which  shall  conform to the provisions of the  Trust  Indenture
Act,  as  then  in effect) satisfactory in form  to  the  Trustee
executed  and  delivered to the Trustee by the entity  formed  by
such  consolidation, or into which the Company  shall  have  been
merged, or by the entity which shall have acquired such property.
  
SECTION 10.02. Successor Corporation Substituted.

     (a)   In  case  of  any  such consolidation,  merger,  sale,
     conveyance,  transfer  or  other disposition  and  upon  the
     assumption  by  the successor corporation,  by  supplemental
     indenture,  executed  and  delivered  to  the  Trustee   and
     satisfactory in form to the Trustee, of the due and punctual
     payment  of the principal of, premium, if any, and  interest
     on  all of the Debt Securities of all series Outstanding and
     the due and punctual performance of all of the covenants and
     conditions of this Indenture or established with respect  to
     each  series of the Debt Securities pursuant to Section 2.01
     to be performed by the Company, with respect to each series,
     such   successor  corporation  shall  succeed  to   and   be
     substituted for the Company, with the same effect as  if  it
     had been named as the Company herein.
  
     (b)   In  case  of  any  such consolidation,  merger,  sale,
     conveyance, transfer or other disposition, such  changes  in
     phraseology and form (but not in substance) may be  made  in
     the  Debt  Securities  thereafter to be  issued  as  may  be
     appropriate.
     
  
     (c)   Nothing contained in this Indenture or in any  of  the
     Debt  Securities shall prevent the Company from merging into
     itself or acquiring by purchase or otherwise all or any part
     of  the  property  of  any  other  Person  (whether  or  not
     affiliated with the Company).
  
SECTION 10.03. Evidence of Consolidation, Etc. to Trustee.

          The Trustee, subject to the provisions of Section 7.01,
may receive an Opinion of Counsel as conclusive evidence that any
such  consolidation, merger, sale, conveyance, transfer or  other
disposition, and any such assumption, comply with the  provisions
of this Article.
  
                           ARTICLE XI
                   SATISFACTION AND DISCHARGE

SECTION 11.01. Satisfaction and Discharge of Indenture.

          If at any time: (a) the Company shall have delivered to
the  Trustee  for cancellation all Debt Securities  of  a  series
theretofore  authenticated (other than any Debt  Securities  that
shall  have  been destroyed, lost or stolen and that  shall  have
been  replaced  or  paid  as provided in Section  2.07  and  Debt
Securities  for  whose payment money or Governmental  Obligations
have  theretofore been deposited in trust or segregated and  held
in  trust by the Company (and thereupon repaid to the Company  or
discharged  from such trust, as provided in Section  11.05));  or
(b)   all  such  Debt  Securities  of  a  particular  series  not
theretofore delivered to the Trustee for cancellation shall  have
become  due and payable, or are by their terms to become due  and
payable within one year or are to be called for redemption within
one  year under arrangements satisfactory to the Trustee for  the
giving of notice of redemption, and the Company shall deposit  or
cause  to be deposited with the Trustee as trust funds the entire
amount  in  moneys or Governmental Obligations or  a  combination
thereof,  sufficient  in the opinion of a  nationally  recognized
firm  of  independent public accountants expressed in  a  written
certification  thereof  delivered  to  the  Trustee,  to  pay  at
maturity  or  upon redemption all Debt Securities of that  series
not  theretofore  delivered  to  the  Trustee  for  cancellation,
including principal (and premium, if any) and interest due or  to
become due to such date of maturity or date fixed for redemption,
as the case may be, and if the Company shall also pay or cause to
be  paid  all other sums payable hereunder with respect  to  such
series  by the Company; then if the Company has delivered to  the
Trustee  an  Opinion of Counsel based on the fact  that  (x)  the
Company  has received from, or there has been published  by,  the
Internal  Revenue Service a ruling or (y) since the date  hereof,
there  has been a change in the applicable United States  federal
income  tax  law,  in either case to the effect  that,  and  such
opinion shall confirm that, the holders of the Debt Securities of
such  series will not recognize income, gain or loss  for  United
States  federal income tax purposes as a result of such  deposit,
defeasance  and  discharge and will be subject to  United  States
federal income tax on the same amount and in the same manner  and
at  the  same times, as would have been the case if such deposit,
defeasance  and discharge had not occurred, this Indenture  shall
thereupon  cease  to be of further effect with  respect  to  such
series  except for the provisions of Sections 2.03,  2.05,  2.07,
4.01,  4.02, 4.03 and 7.10, that shall survive until the date  of
maturity  or  redemption date, as the case may be,  and  Sections
7.06  and  11.05, that shall survive to such date and thereafter,
and  the  Trustee, on demand of the Company and at the  cost  and
expense   of   the  Company  shall  execute  proper   instruments
acknowledging satisfaction of and discharging this Indenture with
respect to such series.
  
SECTION 11.02. Discharge of Obligations.

           If  at  any  time all Debt Securities of a  particular
series  not  heretofore delivered to the Trustee for cancellation
or  that  have not become due and payable as described in Section
11.01   shall  have  been  paid  by  the  Company  by  depositing
irrevocably with the Trustee as trust funds the entire amount  in
moneys  or  Governmental Obligations, or a  combination  thereof,
sufficient,  in  the opinion of a nationally recognized  firm  of
independent   public   accountants   expressed   in   a   written
certification  thereof,  delivered  to  the  Trustee  to  pay  at
maturity  or  upon redemption under arrangements satisfactory  to
the  Trustee for the giving of notice of redemption all such Debt
Securities  of  that  series  not theretofore  delivered  to  the
Trustee  for  cancellation, including principal (and premium,  if
any)  and  interest due or to become due to such date of maturity
or  date  fixed for redemption, as the case may be,  and  if  the
Company shall also pay or cause to be paid all other sums payable
hereunder by the Company with respect to such series, then  after
the date such moneys or Governmental Obligations, as the case may
be,  are  deposited  with the Trustee then, if  the  Company  has
delivered to the Trustee an Opinion of Counsel based on the  fact
that  (x)  the  Company  has received from,  or  there  has  been
published by, the Internal Revenue Service a ruling or (y)  since
the date hereof, there has been a change in the applicable United
States federal income tax law, in either case to the effect that,
and  such  opinion shall confirm that, the holders  of  the  Debt
Securities of such series will not recognize income, gain or loss
for United States federal income tax purposes as a result of such
deposit,  defeasance and discharge and will be subject to  United
States  federal  income tax on the same amount and  in  the  same
manner and at the same times, as would have been the case if such
deposit,   defeasance  and  discharge  had  not   occurred,   the
obligations of the Company, under this Indenture with respect  to
such  series shall cease to be of further effect except  for  the
provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03,  7.06,
7.10  and  11.05  hereof  that  shall  survive  until  such  Debt
Securities  shall mature and be paid.  Thereafter, Sections  7.06
and 11.05 shall survive.
  
SECTION 11.03. Deposited Moneys to be Held in Trust.

           All  moneys or Governmental Obligations deposited with
the Trustee pursuant to Sections 11.01  or 11.02 shall be held in
trust  and shall be available for payment as due, either directly
or  through any paying agent (including the Company acting as its
own  paying  agent), to the holders of the particular  series  of
Debt  Securities  for  the payment or redemption  of  which  such
moneys  or Governmental Obligations have been deposited with  the
Trustee.
  
SECTION 11.04. Payment of Moneys Held by Paying Agents.

           In  connection with the satisfaction and discharge  of
this  Indenture, or the Company's obligation with respect to  the
Debt   Securities  of  a  series,  all  moneys  or   Governmental
Obligations then held by any paying agent under the provisions of
this Indenture shall, upon demand of the Company, be paid to  the
Trustee  and  thereupon such paying agent shall be released  from
all further liability with respect to such moneys or Governmental
Obligations.
  
SECTION 11.05. Repayment to Company.

           Any  moneys or Governmental Obligations deposited with
any paying agent or the Trustee, or then held by the Company,  in
trust  for payment of principal of or premium or interest on  the
Debt  Securities of a particular series that are not applied  but
remain  unclaimed by the holders of such Debt Securities  for  at
least  two years after the date upon which the principal of  (and
premium,  if any) or interest on such Debt Securities shall  have
respectively  become  due and payable, shall  be  repaid  to  the
Company  on May 31 of each year or (if then held by the  Company)
shall  be  discharged from such trust; and thereupon  the  paying
agent  and  the  Trustee  shall  be  released  from  all  further
liability   with   respect   to  such  moneys   or   Governmental
Obligations,  and  the  holder of  any  of  the  Debt  Securities
entitled  to  receive  such  payment  shall  thereafter,  as   an
unsecured  general  creditor, look only to the  Company  for  the
payment thereof.

                           ARTICLE XII
            IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                     OFFICERS AND DIRECTORS

SECTION 12.01. No Recourse.

           No recourse under or upon any obligation, covenant  or
agreement of this Indenture, or of any Debt Security, or for  any
claim based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer or director, past,
present  or  future as such, of the Company or of any predecessor
or  successor corporation, either directly or through the Company
or  any  such  predecessor or successor corporation,  whether  by
virtue  of  any constitution, statute or rule of law, or  by  the
enforcement of any assessment or penalty or otherwise;  it  being
expressly  understood  that this Indenture  and  the  obligations
issued  hereunder are solely corporate obligations, and  that  no
such  personal liability whatever shall attach to, or is or shall
be  incurred  by,  the incorporators, stockholders,  officers  or
directors  as  such,  of  the Company or of  any  predecessor  or
successor corporation, or any of them, because of the creation of
the  indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this  Indenture
or  in any of the Debt Securities or implied  herefrom; and  that
any  and  all  such personal liability of every name and  nature,
either  at common law or in equity or by constitution or statute,
of,  and  any and all such rights and claims against, every  such
incorporator,  stockholder, officer or director as such,  because
of  the creation of the indebtedness hereby authorized, or  under
or   by  reason  of  the  obligations,  covenants  or  agreements
contained  in this Indenture or in any of the Debt Securities  or
implied therefrom, are hereby expressly waived and released as  a
condition of, and as a consideration for, the execution  of  this
Indenture and the issuance of such Debt Securities.
  
                          ARTICLE XIII
                    MISCELLANEOUS PROVISIONS

SECTION 13.01. Effect on Successors and Assigns.

            All   the   covenants,  stipulations,  promises   and
agreements  in  this Indenture contained by or on behalf  of  the
Company shall bind successors and assigns of the Company, whether
so expressed or not.
  
SECTION 13.02. Actions by Successor.

           Any  act  or  proceeding  by  any  provision  of  this
Indenture authorized or required to be done or performed  by  any
board, committee or officer of the Company shall and may be  done
and  performed  with like force and effect by  the  corresponding
board, committee or officer of any corporation that shall at  the
time be the lawful successor of the Company.
  
SECTION 13.03. Surrender of Company Powers.

           The  Company  by  instrument in  writing  executed  by
authority  of  2/3  (two-thirds) of the Board  of  Directors  and
delivered to the Trustee may surrender any of the powers reserved
to  the  Company,  and thereupon such power so surrendered  shall
terminate  both  as  to  the Company  and  as  to  any  successor
corporation.
  
SECTION 13.04. Notices.

           Except  as  otherwise expressly provided  herein,  any
notice  or  demand  that by any provision of  this  Indenture  is
required or permitted to be given or served by the Trustee or  by
the  holders of Debt Securities to or on the Company may be given
or  served  by being deposited first class postage prepaid  in  a
post-office letterbox addressed (until another address  is  filed
in writing by the Company with the Trustee), as follows: Illinois
Power  Company, 500 South 27th Street, Decatur, Illinois   62525,
Attention: Treasurer.  Any notice, election, request or demand by
the Company or any Securityholder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes,
if  given or made in writing at the Corporate Trust Office of the
Trustee.

SECTION 13.05. Governing Law.

           This  Indenture and each Debt Security shall be deemed
to be a contract made under the internal laws of the State of New
York, and for all purposes shall be construed in accordance  with
the laws of said State.
  
SECTION 13.06. Treatment of the Debt Securities as Debt.

          It is intended that the Debt Securities will be treated
as  indebtedness  and  not  as  equity  for  federal  income  tax
purposes.   The provisions of this Indenture shall be interpreted
to further this intention.
  
SECTION 13.07. Compliance Certificates and Opinions.

     (a)   Upon any application or demand by the Company  to  the
     Trustee  to  take any action under any of the provisions  of
     this Indenture, the Company shall furnish to the Trustee  an
     Officers'  Certificate stating that all conditions precedent
     provided  for  in  this Indenture relating to  the  proposed
     action  have  been complied with and an Opinion  of  Counsel
     stating  that  in  the  opinion of  such  counsel  all  such
     conditions precedent have been complied with, except that in
     the  case of any such application or demand as to which  the
     furnishing of such documents is specifically required by any
     provision  of  this  Indenture relating to  such  particular
     application or demand, no additional certificate or  opinion
     need be furnished.
  
     (b)   Each  certificate  or opinion  provided  for  in  this
     Indenture  and  delivered  to the Trustee  with  respect  to
     compliance  with a condition or covenant in  this  Indenture
     shall  include (1) a statement that the Person  making  such
     certificate or opinion has read such covenant or  condition;
     (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 such Person, 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 or not, in the opinion of such
     Person, such condition or covenant has been complied with.
  
SECTION 13.08. Payments on Business Days.

          Except as provided pursuant to Section 2.01 pursuant to
a Board Resolution, and as set forth in an Officers' Certificate,
or  established  in one or more indentures supplemental  to  this
Indenture, in any case where the date of maturity of interest  or
principal of any Debt Security or the date of redemption  of  any
Debt  Security  shall  not be a Business  Day,  then  payment  of
interest  or principal (and premium, if any) may be made  on  the
next succeeding Business Day with the same force and effect as if
made  on  the  nominal  date of maturity or  redemption,  and  no
interest shall accrue for the period after such nominal date.
  
SECTION 13.09. Conflict with Trust Indenture Act.

           If  and  to  the  extent that any  provision  of  this
Indenture limits, qualifies or conflicts with the duties  imposed
by  Sections  310 to 317, inclusive, of the Trust Indenture  Act,
such imposed duties shall control.
  
SECTION 13.10. Counterparts.

           This  Indenture  may  be executed  in  any  number  of
counterparts,  each  of  which shall be  an  original,  but  such
counterparts  shall  together constitute but  one  and  the  same
instrument.
  
SECTION 13.11. Separability.

           In case any one or more of the provisions contained in
this Indenture or in the Debt Securities of any series shall  for
any reason be held to be invalid, illegal or unenforceable in any
respect,  such  invalidity, illegality or unenforceability  shall
not affect any other provisions of this Indenture or of such Debt
Securities, but this Indenture and such Debt Securities shall  be
construed   as  if  such  invalid  or  illegal  or  unenforceable
provision had never been contained herein or therein.
  
SECTION 13.12. Assignment.

           The Company will have the right at all times to assign
any  of its respective rights or obligations under this Indenture
to  a  direct or indirect wholly-owned Subsidiary of the Company,
provided  that, in the event of any such assignment, the  Company
will  remain  liable for all such obligations.   Subject  to  the
foregoing,  the  Indenture is binding  upon  and  inures  to  the
benefit  of  the parties thereto and their respective  successors
and assigns.  This Indenture may not otherwise be assigned by the
parties thereto.

SECTION 13.13. Acknowledgment of Rights.

          The Company acknowledges that, with respect to any Debt
Securities held by an Illinois Power Trust or a trustee  of  such
trust, if the Property Trustee of such Trust fails to enforce its
rights  under this Indenture as the holder of the series of  Debt
Securities  held as the assets of such Illinois Power Trust,  any
holder of Preferred Securities may, after a period of 30 days has
elapsed  from  such  holder's written request  to  such  Property
Trustee  to  enforce  such  rights, institute  legal  proceedings
directly  against the Company to enforce such Property  Trustee's
rights  under this Indenture without first instituting any  legal
proceedings against such Property Trustee or any other person  or
entity.
  
                           ARTICLE XIV
                SUBORDINATION OF DEBT SECURITIES

SECTION 14.01. Subordination Terms.

           The  payment  by  the  Company of  the  principal  of,
premium,  if  any, and interest on any series of Debt  Securities
issued hereunder shall be subordinated to the extent set forth in
an  indenture supplemental hereto or a Board Resolution  relating
to such Debt Securities.
          IN WITNESS WHEREOF, the parties hereto have caused this
Indenture  to  be  duly executed, and their respective  corporate
seals to be hereunto affixed and attested, all as of the day  and
year first above written.
  
                                   ILLINOIS POWER COMPANY


                                   By:/s/ Cynthia G. Steward
                                   Name:  Cynthia G. Steward
                                   Title: Controller
  

Attest:


By:  /s/ Leah Manning Stetzner
Name:    Leah Manning Stetzner
Title:   Vice President, General Counsel
         and Corporate Secretary

[Seal]


                                   WILMINGTON TRUST COMPANY,
                                   not in its individual capacity
                                   but solely as Trustee
  

                                   By: /s/ Emmett R. Harmon
                                   Name:   Emmett R. Harmon
                                   Title:  Vice President


Attest:


By:  /s/ W. Chris Sponenberg
Name:    W. Chris Sponenberg
Title:   Financial Services Officer

[Seal]